Before creating the account(s) for an award, URA waits for notification from the funding agency that the proposal has been awarded. Awards will require more than one account if the following apply:
- On and off-campus expenses or other spending categories that carry different indirect cost rates
- More than five out-going subawards
- Multiple projects under the grant that each have their own budgeting requirements
The Financial Administrator will need to provide basic information to URA in order to establish all of the necessary accounts based on the parameters of the award (e.g. list of administrator, list of authorized signers, special budgeting requirements).
Under certain circumstances an account can be established before the award has been formally issued or accepted by the University. This is called an “advance account.” These must be requested from URA. Any spending made before the award has been issued is done at the University’s risk. If the award is not formally issued or accepted, the funding agency will not reimburse the University for any pre-award costs incurred.
Notice of funding for an award is usually issued via the original award document and followed by additional amendments. The timing will vary according to the terms of the award. URA will budget the funds into the appropriate account(s) only after the notice of funding has been received by the University.
For Federal Demonstration Partnership (FDP) awards, balances can be carried over to the next project year without prior approval. For non-FDP awards, consult the award documents.
Funding for successive years can and most likely will be witheld by the funding agency until any required progress reports from the PI are filed. It is the PI’s responsibility to keep abreast of reporting deadlines.
- The PI is ultimately responsible for all expenses on an award. While the Financial Administrator is responsible for ensuring that spending is conducted in accordance with University and agency guidelines, the PI must be able to justify every expense as appropriate and necessary for the award.
- The budget approved by the funding agency should be followed as closely as possible. However, there are always contingencies that arise during a research project that could impact the nature and rate of spending. Many federal awards are part of the Federal Demonstration Partnership (FDP), which means (budgetwise) that the PI is allowed to make minor adjustments to the budget as needed to accomplish the original goals of the project. However, approval from the funding agency is required if the scope and aims of the project are changed or if a substantial amount of the budget is being diverted from its original purpose. With non-FDP awards, the PI should consult the program officer before making budget changes. The program officer should always be consulted before hiring people for positions not included in the approved project budget.
- Pre-award spending is allowed up to 90-days before the start date of the award on FDP awards. Expenses can be charged to an award up to 30 days after the end date of the award only if those expenses were incurred before the award ended (e.g. for an award ending on May 31, an invoice for an item purchased before May 31 can be paid from the award until June 30).
Annual Effort Certification Statements
Every Fall quarter, the University generates annual effort certification statements detailing both monthly and bi-weekly employee effort charged to sponsored awards during the previous fiscal year (July 1 – June 30). Effort is calculated based on the percentage of a person’s income charged to an account. The statements are received by the LBC and distributed to the PIs and/or department administrators depending on each department’s policy.
PIs must certify the accuracy of the percentage of effort charged to their grants by signing these documents in a timely fashion or by indicating their review and approval of the documents via email. The deadlines will be communicated by the Financial Administrator.
The annual effort certification process is a critical part of the federal award process. Failure to complete the certifications in a timely fashion can trigger an audit finding during our annual internal audit, which can trigger a series of additional audits from a number of federal agencies.
Occasionally, expenses are charged to an incorrect account. Financial Administrators can correct these errors via expense transfers. Financial Administrators can often identify some of these problems themselves, but certain transactions (e.g. recharges, telecom bills) are difficult for a Financial Administrator to identify as a problem. Thus it is very important for PIs to periodically review their account activity and identify any unusual transactions so that errors can be spotted and corrected in a timely fashion. A transfer is considered late if any of the expenses are more than 90-days old. A late cost transfer form will need to accompany such transfers.
The PI should speak with his/her Financial Administrator to establish a preferred method for account updates. The Financial Administrator is capable of producing a variety of reports regarding account balances, transaction histories, and payroll. These reports can be produced on-request or on a regular schedule.
Most awards have reporting requirements. Financial reporting is performed by Financial Services. Project/progress reporting is typically performed by the PI. For federal awards, annual progress reports are due 30-days before end of the project year. The next year’s funding can be delayed until these annual reports are filed. Final project reports are due no more than 90-days after the end of a federal award. The PI should consult the program officer if guidance regarding the content/scope of the report is needed. Some awards my require different reporting schedules, which are detailed in the award document or in the solicitation notice. If neither the solicitation nor other program documentation indicate a specific schedule for progress reports, it is good practice to assume that they are due 30-days before the beginning of the next project/budget year.