Policies and Processes

Cost sharing is when the University takes responsibility to expend its own funds on behalf of a sponsored award. Cost sharing come thre three varieties: involuntary committed (mandatory), voluntary committed, and voluntary uncommitted.

Involuntary committed (mandatory) cost sharing occurs when the sponsored program requires financial support for the project from the awarded institution as a condition of the award. This can be in many forms such as a matching contribution or a percentage of certain costs. The specific formula should be described in the solicitation notice. The proposal budget must clearly show how the University will meet its obligation.

Voluntary committed cost sharing is when the proposing institution volunteers and commits to bear a specific portion of the costs of the project when it is not required. To volunteer matching funds, percentages of costs, or other similar contributions is rare and often discouraged by many funding agencies. If allowed, the volunteered cost sharing should be detailed in the budget or project narrative as appropriate. NSF prohibits the use of voluntary committed cost sharing on its awards.

For the two types of committed cost sharing, the difference is in the motivation while the administrative handling is the same for both. Either form of committed cost sharing requires Division/Department approval.

Voluntary uncommitted cost sharing is when the University volunteers to provide extra resources to the project in ways not detailed in the proposal budget. This could be in cash or in kind, but there is no obligation to track this extra support in the award accounts, with one exception. The exception is when the PI chooses to expend some unspecified amount of effort more than what was detailed in the proposal. This is usually the case when the PI is not requesting salary from the award, and so is providing his/her effort for free. Per University policy, the PI must demonstrate effort on any award even when no salary is taken. In order to demonstrate this, a cost sharing account is created to capture nominal effort such as 0.5 months per academic year (more than 0.5 months requires Division/Department approval). Voluntary uncommitted cost shared effort should not be included in the proposal budget, but should be on a report of current and pending support. There is no requirement to document other extra support from the PI or the University (e.g. un-reimbursed business trips, donating materials to the project) and it requires no approval.

The 0.5 month effort cost sharing situation only comes up when the PI is taking $0 salary from an award during any one project year (summer and academic year included). If a PI with an academic appointment is taking $0 salary in summer salary, but is committing effort and drawing salary from a grant during the academic year, then that would be a salary recovery situation. Salary recovery is essentially the opposite of cost-sharing since the grant is being charged for salary amounts the University would normally pay. Salary recovery situations require neither cost sharing accounts nor any other special accounting. It is, however, good practice to indicate whether the PI's effort is summer or academic year in a proposal's budget justification and it must be detailed in the PI's current/pending report.

Unless explicitly prohibited in the solicitation and/or the award documentation, a PI must receive some direct salary from an NSF award to demonstrate effort, therefore the 0.5 month voluntary cost sharing is not allowed by NSF. However, we will continue the practice with other agencies until further notice.

Cost Sharing Accounts

Cost sharing requires three separate accounts: the award master account, the cost sharing associate account, and the cost sharing funding account. No single account can perform more than one of these functions concurrently.

The cost sharing associate account is the account connected to the award in which the University will demonstrate its financial contribution. The funding account is the University funded account from which the cost sharing expenses will be ultimately paid. A cost sharing account can be linked to only one funding account.

The University can reimburse faculty, staff, students and visitors/guests for qualified travel expenses incurred while on University business. Benefits eligible University employees can be reimbursed via GEMS for expenses while on University business. Travel reimbursements for students should use the Student Reimbursement Request Form. All other travel reiimbursements should use Oracle's Payment Request module to process reimbursements. Spouses or dependent travel companions cannot be reimbursed for their expenses without prior written approval from the Vice-President for Administration and the CFO.

When faculty, staff, or students travel 50 miles or less from Campus (not the traveler’s home) the traveler may be reimbursed for local transportation costs, but not for meals or lodging according to the IRS provisions on local travel. 

Note: There are few exceptions, see your financial administrator for details.

There are a few things to keep in mind when using federal funds for travel expenses:

• To comply with the Fly America Act, a US airline or flight code-shared with a US airline must be used, with the following exceptions: a European Union airline may be used when traveling to a European Union member state; an Australian, Japanese, or Swiss airline may be used when traveling to those respective countries when the GSA does not have a published rate for your specific city pair destination (see GSA city pair rates). The receipts and ticket stubs must be able to demonstrate the airline and any code-sharing.
  Foreign airlines may be permitted under other limited circumstances depending upon agency rules. If one intends to use a foreign airline, the Financial Administrator should be consulted in advance to determine how the expense should be handled.
  If the airfare does not comply with the Fly America Act, then it must charged to an internally funded account or paid for by the traveler.
• While travel meals are allowed on federal grants/contracts, alcohol is always prohibited.

Receipts and Per Diem

Receipts for expenses over $75 must be retained. All lodging receipts, regardless of amount, must be retained. All receipts must indicate both what was purchased and proof of purchase. Travel itineraries and reservation confirmations are not sufficient substitutes. When completing the reimbursement request, the traveler must itemize all reimbursable expenses including those for which receipts are not required or missing.
Note: Even meals and taxi trips should have detailed receipts. When expecting reimbursement, retain both the itemized meals receipt and the payment receipt. Likewise with taxis, ask the driver to fill out the receipt and sign it or request one from the cab company afterwards.

If required receipts are lost or missing, the traveler should first request replacement copies from the service provider. If the receipt proves to be unobtainable, the traveler should consult his/her Financial Administrator about appropriate substitute documentation (e.g. credit card statements, etc.). When submitting a duplicate copy of a receipt or alternate documentation, write the following statement on the receipt and sign it: “This expense was incurred in connection with University business. I have not and will not be reimbursed from any other source.”

The reimbursement must be based in US dollars. Any receipts in foreign currencies must be converted using the prevailing rate at the time of the transaction or on the last day of travel. GEMS has a built-in currency conversion tool, but other thrid-party conversion tools are allowable, such as oanda.com, if needed. The currency conversion method should be included with the receipts. If necessary, ultimate payment can be issued in various currencies through a wire transfer (not through GEMS).

Per diem for meals/incidentals is an option for travel reimbursements to University employees (students and visitors may not use per diem). Receipts and itemization are not required when using per diem. The meals/incidentals rate covers expenses such as: fees and tips given to porters, baggage carriers, hotel staff, etc. The traveler cannot seek additional reimbursement for such charges if taking per diem. Per diem for lodging is not permitted. While lodging reimbursements must be based on actual reciepts on federal awards, they may also need to be capped at the maximum per diem rate for the locale (calculated as the rate times the number travel days, excluding the final day of travel and any days on which lodging was not paid for) if the award documents reference the GSA spending limits.

When requesting per diem, it applies to the entire trip. One cannot choose per diem for some days and actual expenses for others. The meals/incidentals or M&IE rate is capped at no more than 75% on the first and last days of travel, and must also be reduced on any days when meals are provided for without additional out-of-pocket cost (e.g. conference meals included in registration or meals included in the hotel room rate). The meal deductions for international trips are 15% for breakfast, 25% for lunch, and 40% for dinner (rounded to the nearest dollar). The deductions are different for domestic trips because incidentals are fixed at $5 for all rates as opposed to 20% for international trips (consult the GSA website for details). Current federal per diem rates can be found at the following links – Domestic per diem rates / Foreign per diem rates.

Transportation Options

Travelers are free to choose their primary mode of transportation whether it is by air, train, bus, rental car, or personal car. Whatever method is chosen, the traveler cannot be reimbursed for more than the standard available coach airfare for the equivalent journey (see your Financial Administrator for exceptions if necessary).

The value of redeemed frequent flyer miles used towards airline tickets is not reimbursable.

Airline baggage fees are reimbursable, but other purely voluntary fees like early boarding, economy plus upgrades, etc. are not.

Insurance on domestic (US or Canada) car rentals is not reimbursable and should not be purchased additionally since faculty, staff, and students are covered by the University's blanket auto insurance coverage while traveling on University business. This applies to domestic car rentals, but not to personal vehicles or foreign rentals. Purchasing insurance is suggested and reimbursable when renting a car abroad. Travelers may need to show proof of insurance to waive additional insurance fees on domestic car rentals. It is best to obtain proof of insurance in advance. Instructions for doing so can be found at http://rmia.uchicago.edu/page/certificate-requests.

It is recommended that University travelers use one of the the contracted rental car agencies, Enterprise for local (Chicago metro/NW Indiana) rentals and National for other US locations. The traveler should reference the corporate contract numbers when scheduling a rental. If a car accident occurs while driving on University business, the traveler should report the accident to the Risk Management Department as soon as possible (no more than 24 hours later) at 773-702-1951. For more detailed instructions to follow after an accident, see the Risk Management website about claim reporting.

If using a private car, the traveler can be reimbursed for mileage (not fuel costs) at the prevailing federal rate during the time of travel. A map of the route to the destination (e.g. mapquest, google maps, AAA) should be provided and attached to the reimbursement request to establish the mileage of the trip. Road tolls and reasonable parking fees may also be reimbursed.

Local transportation at the destination by public transit, taxi, ferries, etc. is also reimbursable. However, trips on recreational and touring vehicles cannot be reimbursed.

Insurance

University employees traveling on University business are covered by the University's Business Travel Accident Insurance which covers death or a serious injuries in an accident while traveling on University business away from University premises. Any additional personal accident insurance coverage is not reimbursable.

Some insurance products are reimburseable only for foreign trips. Trip insurance (protection against additional costs that are caused by cancellations or delays/interruptions to travel) is reimbursable for foreign trips only. Collision damage waivers can be reimbursed only for car rentals in foreign countries because the University's insurance coverage in this area does not apply overseas.

Insurance protection for the loss of or damage to personal property is not offered by the University and is not reimbursable.

Oracle

Most purchases should be processed through the University’s Oracle purchasing system. The University maintains a list of preferred contract vendors for a variety of goods and services, see the list of preferred purchasing methods for guidance on which method to choose. General information about porucasing policies and procedures can be found on the Financial Services website at finserv.uchicago.edu/purchasing/po/index.shtml.

Cost Limits

There is no theoretical price limit on purchase orders, but addtional steps and documentation are required for high value purchases.

Purchases totaling $10,000 or less, including delivery, do not need price quotes.

Purchases $10,001 and above require competing quotes and documentation. 

Purchases between $10,001 and $250,000 should have a minimum of 2 (preferably 3) price quotes. Quotations need to be detailed in the Source and Price Reasonableness form, which must be attached to the requisition in Oracle. Written price quotes are preferred. They should also be attached to the purchase requisition. It is the order initiator’s responsibilty to solicit the quotes. If competing quotes are not available or if the lowest quote is not the preferred purchase, the situation should be explained on the form.

Purchases over $250,000 be submitted to Procurement Services to solicit the quotes via a ServiceNow request.

Some preferred supplier contracts have special order handling procedures that may be exceptions to the rules above. If in doubt, check the terms of the preferred supplier contracts.

Source and Price Reasonableness Form

The Source and Price Reasonableness form is an internal document that must accompany all purchase orders between $10,000 and $250,000 (guidance in assessing price reasonableness). This form should not be sent to the vendors or anyone outside of the University. Any quotes and pricing information received from the vendor should not be shared with anyone outside of the University.

Unlike ordinary supplies, equipment does not incur indirect costs on sponsored awards and needs to be physically tagged as University or government property so that it can be inventoried each year in the University's asset management system. The University cannot purchase equipment for the personal use of an employee or any other person, even if reimbursement is offered.

Before purchasing any equipment, the purchaser must perform a screening to determine that suitable equipment is not already owned by the University and available for the desired use. This step is necessary to avoid wasteful duplication and is required when purchasing equipment with federal funding.

Equipment falls under two broad categories: purchased and constructed.

Purchased Equipment

Purchased equipment is any purchased item with a useful life of one year or more and a per unit cost of $5,000 or more. Software costing more than $100,000 is also treated similarly to equipment. For example, a $6,000 server will qualify as equipment whereas a single order for ten $1,000 individual computers would not.

Constructed Equipment

Constructed equipment includes all costs incurred to construct or assemble scientific and technical equipment used to accomplish a special purpose in the performance of a research project. Billed labor expenses for construction from University recharge (e.g. UChicago Central Shop or Electronics Development Group) or an outside vendor are allowable as constructed equipment expenses, however salary charges for other University employees may not be directly applied to constructed equipment costs. The total cost of constructed equipment must meet or exceed $5,000 although individual orders and components used to build the equipment do not.

When a new award is received that contains constructed equipment, the finanical administrator should complete a Constructed Equipment Form as soon as possible to ensure proper accounting.

Contract Deliverables

Equipment purchased or constructed by the University under a contractual agreement with another agency or institution is not considered University property, but rather the property of the entity to which the equipment will be delivered.

For more detailed information about equipment and asset tracking see the University's Property Management Manual.

Closing Restricted Accounts

The closeout process begins 120 days prior to the project period end date and complete the closing memo in accordance with University Research Administration's Award Closeout guidelines.

1. Review the payroll: make any needed transfers and ensure that the allocations for each employee is updated in Workday so that they are paid from other accounts going forward. Be aware of payroll action cut-off dates early in the month. If workers are being laid off as a result of the award ending, plan well in advance to ensure that sufficient funds will be available to cover their accrual payouts for unused vacation and personal days. [before end date]
2. Cancel or redirect any future University telephone/networking services or other recurring service charges. [before end date]
3. Initiate any needed cost transfers to correct any current or projected overdrafts. [before end date]
4. Make sure any trailing charges clear the account such as: outstanding purchase order and vendor invoices, reimbursements, transfers... [after end date]
5. Prepare separate closing memos for the master and each associate account and submit them to the Sponsored Award Accounting manager within 90 days of the end of the award.

To complete the closing memo (sponsored awards only):

1. Follow the instructions on the form which are fairly self explanatory.
2. If there are any trailing transactions, attach copies of the supporting documentation (purchase orders, transfers, GEMS reports, et cetera).
3. Attach the AMO90 ledger for the month the award ended.

Things to remember...

• Any expenses incurred after the award end date must be removed prior to closing the account.
• Legitimate award related expenses incurred before the award end date, but not charged to the account until after the end date are allowable. All trailing activity must clear before the closing memo can be submitted.
• A single account or master/associate grouping cannot be closed if there is a cumulative negative balance. So, if a master account has a negative balance and its associate has a positive balance, they can be closed if the cumulative balance between them is equal to or greater than $0.

Q. Can purchases made on a personal credit card be reimbursed if they do not exceed $500?
A. Yes. GEMS can be used to reimburse out-of-pocket expenses as well as processing GEMS card transactions. Non-travel reimbursements should be limited to $500 or less.

Q. When should reimbursement requests be given to the financial administrator vs. given to the departmental administrator?

A. The financial administrator is the approver for transactions on your accounts. The University's account controls generally prohibit the requestor and approver being the same person. Thus, the financial administrator should not fill out reimbursement forms and purchase orders that he/she will approve. Departmental administrative support (if it is available) should provide assistance with completing the forms prior to submission for approval. In cases when administrative support does not exist, personnel within the LBC can provide such support for reimbursement requests.

Q. Will GEMS reimbursements for faculty and staff be deposited directly to their bank accounts or merged in with payroll?
A. All GEMS reimbursements are paid through the payroll system. If you are currently collecting a pay check through direct deposit, then your GEMS reimbursements will be included with your regular pay deposit. If you normally collect your pay in the form of a check, then your GEMS reimbursements will also be distributed in that form. Bi-weekly and monthly employees will receive reimbursement payments based on the University's bi-weekly payment cycle.

Q. Can GEMS settings be changed so that I get email only when there are new reports that must be concurred, and not every time some other action is taken (e.g. reports approved or paid)?
A. Yes, the number of e-mails can be reduced. The e-mail settings can be changed at the "system settings" page and also on the "expense preferences" page both of which are found using the "profile" tab at the top of the screen.

Q. Can PIs select their own GEMS delegates?
A. Faculty already have delegates assigned to them. However, additional delegates can be assigned using the GEMS interface. Contact Shared Services for support.

Q. How are GEMS card expenses paid?
The University automatically pays MasterCard for all University GEMS card expenses from a single University account. Each expense is automatically transferred to the Divisional account associated with that card by default. Default accounts are specified in advance for each card by Faculty Service Representatives or, in Economics, the departmental administrator.
GEMS card users and University account administrators allocate GEMS card expenses from default accounts to the appropriate University account(s). This step is key: after you use your GEMS card, you must account for your expenses in the GEMS system, even though the University has paid MasterCard and the Division has paid the University. This is true even if your GEMS card expenses are appropriately allocated to your GEMS card default account. This final step is NOT automatic. Using a GEMS card obligates you to account for your expenses in the GEMS system.
GEMS card users pay no bill. GEMS card activity has no effect on your personal credit. You will get a monthly statement by mail, but this is just for your records and should not be paid.

Q. Can a PI see and concur purchases made on the GEMS card that will be issued to postdocs under his/her supervision?
A. There is no way to do this automatically, but the PI may request that all transactions are forwarded by the financial administrator.

Q. Do purchases made with a GEMS card require scanning receipts and uploading them into the GEMS system?
A. Yes, all required receipts should accompany a GEMS report electronically.

Q. Are receipts required for per diem travel expenses?
A. No, if per diem is used as the basis for reimbursement, then receipts are not needed. You can use per diem for meals/incidentals only or lodging AND meals/incidentals. Receipts for lodging are always required regardless of dollar amount unless the per diem rate is used. If per diem is used, it must be used for the entire trip and not only for select days or locations. Recepts are still required for transportation related expenses (e.g. airfare, car rentals).

Q. Are itemized receipts required for meal reimbursements?
A. Yes, business meals should have an itemized meal receipt (not just the signature receipt). As a rule, all receipts must both clearly identify what was purchased AND indicate proof of payment.