East Tennessee State University
Financial
Procedures
FP - 8
GRANTS AND CONTRACTS
I. GENERAL
II. AUTHORIZATION OF EXPENDITURES
III. COST-SHARING
IV. PERSONNEL REGULATIONS
V. TIME AND EFFORT REPORTING
VI. PURCHASING
VII. TRAVEL AUTHORIZATIONS
VIII. CONSULTANTS
IX. EQUIPMENT
X. EXCESS GOVERNMENT PROPERTY
XI. NEGOTIATIONS OF POST-AWARD CHANGES IN PROJECT
XII. PURCHASES NEAR TO AND AFTER TERMINATION DATE
XIII. RETROACTIVE COST TRANSFERS
XIV. CLOSE OUT AND AUDIT
XV. MISCELLANEOUS
LINKS TO EXHIBITS
It is the policy of the
University to permit as much flexibility as possible to the project director in
pursuance of the research or training objectives. However, awards for sponsored
projects are made to the University, not the project director, with the University
identified as grantee. The University thus assumes full responsibility for
insuring that the program is conducted within the administrative guidelines and
regulations specified by both the sponsoring agency and the University. It is
the primary responsibility of the Office of Research and Sponsored Programs, as
the designated institutional representative, to serve as intermediary between
the agency and the project director for the purposes of negotiating changes in
the project budget, modifications (reallocations, increase or decrease of
funds), time extensions, and other items primarily administrative in nature.
The project director has the responsibility for directing the technical aspects
of the project and otherwise carrying out the research or program effort within
the scope authorized by the agency and for initiating any and all expenditures
of grant funds within budget and contract constraints. The Grant Accounting
Office is responsible for all post award accounting and reporting activities.
Project expenditures and
equipment accountability on all Federally sponsored projects are governed by
Office of Management and Budget Circulars A-21 and A-110. In addition, each
Federal Agency publishes a guide or policy statement on their grants which generally
encompasses the requirements in A-21 and A-110. The project director should be
familiar with these publications. Expenditures must conform to those guidelines
as well as all University requirements. Purchase requisitions and travel
authorizations must be processed through regular University channels and in
accordance with existing University guidelines contained in other sections of
this policy and procedure manual. General procedures for grants and contracts
are as follows:
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II.
AUTHORIZATION OF EXPENDITURES
When an award has been
accepted by the University, the Office of Research and Sponsored Programs
forwards to the Financial Services Office a copy of the award notice, and a
complete grant application with detailed budget and preferably an agency
financial manual. A conference is scheduled with the principal investigator and
Accounting Office personnel for discussion and explanation of (1) project
budget line items, (2) time and effort reports, (3) budget revision process and
requirements of the Agency and the University, (4) progress and technical
reports required, (5) purchasing procedures, (6) close out procedures, and
other items as appropriate. The grant account number to which charges are to be
made is released at this time.
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Historically, federal
agencies require auditable cost- sharing on the part of the University for
government supported projects. The University usually has the option of meeting
this cost-sharing requirement in a number of ways. The University can
cost-share (a) a percentage of the time and effort of the personnel involved in
carrying out the project; (b) part of the indirect cost; (c) operating
expenses, etc. University cost-sharing is generally indicated at the time the
proposal is submitted. The amount of cost-sharing required and the method of
meeting that requirement will be indicated upon the face of the Notice of
Award. In addition, any administrative notes attached to the award notice will
usually indicate what is required of the project director as far as
documentation of personnel time and effort, etc., to meet the cost-sharing
requirements.
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All personnel involved in the
project whether they are faculty, professional staff, clerical, or students,
must be paid in accordance with Tennessee Board of Regents and University
guidelines.
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The project director is
responsible for the preparation and timely submission of the required
University forms delineating the total effort of all personnel working on the
project, whether charged directly to the grant or contract or used as
University cost-sharing. Time reporting copies are based on each person’s
signed time report generated by the TRS system. Copies of the approved time
report, with any adjustments noted and approved by the employee’s supervisor,
must be sent to the Financial Services Office by the 10th day
following the close of the pay period i.e, by the 25th for the 15th
payroll and the 10th of the following month for the end of the month
pay period. Copies of these forms and additional information on the procedures
to follow are made available at the conference referred to in Section II above.
Failure to submit required
time reports will cause payroll costs to be disallowed upon audit of the grant.
In order to assure appropriate documentation to comply with Federal, State, and
University regulations and requirements if project director does not submit
time and effort reports on a timely basis, the University may withhold grant
salary payments until the required forms are received.
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Requisitions for supplies and
equipment are initiated by the project director and must be submitted in
accordance with the established University procedures for the purchase
requests. Care must be exercised to insure that contract and grant funds are
expended only for budgeted items and that the total amount of funds provided
are not exceeded.
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When funds have been provided
in the approved budget for travel, domestic or foreign, the project director is
responsible for initiating the required travel authorization forms and
submitting them through regular channels for approval.
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Due to federal audit
requirements, the University must apply the same regulations to consultants
hired on all research and sponsored program grants. Unless the federal grant or
award specifies otherwise, the federal government will not participate in
paying for overload or overtime. The payment for consultant services may not
exceed the daily equivalent of the maximum rate paid a United States Government
GS18 employee. Please contact the Office
of Research and Sponsored Programs for the current maximum rate. Federal
guidelines require that:
A. There is evidence that the services to be provided are essential and cannot be provided by persons receiving salary support under the grant or otherwise compensated for their services.
B. A selection process has been employed to secure the best qualified person available.
C. The charge is appropriate considering the qualifications of the consultant, normal consulting charges, and the nature of the services rendered.
D. If the individual is an employee of the grantee institution, consultation is across departmental lines and in addition to the regular duties or involves a separate and remote operation, and the work performed is in addition to the consultants normal departmental work load. Written requests from academic departments for consultant services are to be submitted to the Provost or Vice President for Health Affairs as appropriate. Departments other than academic are to submit requests to the Vice President for Business and Finance. When using an outside consultant, a personal service contract must be completed in accordance with the procedures in FP-14.
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Equipment is defined as a
physical resource that benefits a program for more than three years (one year
for Federal projects) and costs in excess of five thousand dollars ($5,000).
The definition of equipment for sponsored research varies from agency to agency.
The agency's definition of equipment, if more restrictive than the state's
definition, would govern. For information regarding the regulations of each
agency with which you are dealing, please contact the Office of Research and
Sponsored Programs. In general, any purchase of equipment must have been
specified in the approved operating budget prior to its purchase. Deviation
from the approved budget for equipment purchases must be submitted to the
Office of Research and Sponsored Programs for required agency approval prior to
purchase.
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Information on the
acquisition of excess or surplus government property under a grant or contract
is available from the Purchasing Office.
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XI.
NEGOTIATIONS OF POST-AWARD CHANGES IN PROJECT
All sponsoring agencies have
specific requirements on the approval process which must be adhered to for
changing the approved scope or work, in reallocating funds from the approved
operating budget, changing the total effort to be devoted to the project by
senior personnel, or changing the approved time for the project. In some
instances approval must be obtained from the sponsor, while in other cases the
University has been given the authority by the sponsor to approve such changes.
Project directors must consult the Office
of Research and Sponsored Programs on all proposed changes in these
categories.
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XII.
PURCHASES NEAR TO AND AFTER TERMINATION DATE
Items not received during an
award period are not of benefit to the project and are routinely disallowed on
audit, even if they were legitimate charges at the time the order was placed.
Therefore, orders for supplies and equipment must be placed well in advance (60
- 90 days) of the grant expiration date to ensure delivery. If additional time
is needed to complete reports or acquire supplies, contact the Office of Research and Sponsored Programs
to aid in securing a no-cost time extension or to make other arrangements.
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XIII.
RETROACTIVE COST TRANSFERS
Expenditures should always be
charged to the proper account initially. However, transfers must occasionally
be made. An Addendum to Public Health Service Grant Manual is typical of
Federal requirements:
A. The cost is a proper and
allowable charge to the grant.
B. The transfer is supported
by documentation, fully explained and justified.
C. The transfer is reviewed
and approved by the University Financial Services Office and unless an obvious
error was made in the original charge the transfer must be made within 120 days
of the original recording of the transaction.
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Technical and financial
close-out documents are due soon after the termination date of the grant. The
project director is responsible for preparation of the technical report to the
granting agency and will be required to provide information, when requested, on
possible patents and property acquisition as well as signing the final
expenditure report. Most awards are audited under the provisions of the single
audit concept as contained in OMB Circular A-133. Under this OMB Circular, the
Division of State Audit performs compliance and financial testing of grants and
contracts during their normal audit of the university with the results reported
to the university’s cognizant audit agency. However, the agency may perform a
separate audit. Project directors should keep complete, accurate records in
case the award is selected for comprehensive audit.
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The project director is the
administrator of the project. The Financial Services Office will record and
report the financial transactions of the project in accordance with the
approved project budget. Project directors who have concerns or questions
regarding accounting procedures, payments under grants and contracts,
cost-sharing, staff benefit charges, or indirect costs should contact Financial Services or the Office of Research and Sponsored Programs,
as appropriate.
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Exhibit 8. A - Memo for
Establishment of Preaward Account Number
on the Office of Research and Sponsored Programs website
http://www.etsu.edu/research/forms.htm
Exhibit 8. B - Re-budgeting
Prior Approval Sheet
Word Format
Exhibit 8.C - Grant Time
Report Check Sheet
Excel Format
Original
effective date: April 9, 1982
Revised: October 1, 1987; November 1, 2001; February 22, 2010
Last review: November 1, 2001
Web page last updated 2/22/2010