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New UVM Policies and Procedures Affecting Grants: Advance Accounts, Cost Transfer, and Residual Balance

SPTP. New UVM Policies and Procedures Affecting Grants: Advance Accounts, Cost Transfer, and Residual Balance. Sponsored Projects Training Program December 8 th , 2011 Beverly Blakeney , Ruth Farrell, Michael Meunier. Welcome. An introduction to the presenters and the topics.

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New UVM Policies and Procedures Affecting Grants: Advance Accounts, Cost Transfer, and Residual Balance

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  1. SPTP New UVM Policies and Procedures Affecting Grants: Advance Accounts, Cost Transfer, and Residual Balance Sponsored Projects Training Program December 8th, 2011 Beverly Blakeney, Ruth Farrell, Michael Meunier

  2. Welcome • An introduction to the presenters and the topics. • Time line and next steps for implementation of these policies and procedures. Sponsored Projects Training Program

  3. Learning Objectives • Increase awareness of upcoming changes in cost transfer policy and two new, separate procedures that will soon be in place. • Help participants understand new operational practices that they will have to plan for. Sponsored Projects Training Program

  4. Reminder – the Cost Principles • Allocable • Allowable • Reasonable • Consistently charged Sponsored Projects Training Program

  5. SPTP Advance Account Procedurea.k.a Guaranteed Funding

  6. Advance Account – What? • Creation of a sponsored project chart string before an award document is received or accepted from the sponsor Sponsored Projects Training Program

  7. Advance Account – Why? • Need to start the work • Allows PIs and Departments to record and track expenditures in appropriate chart string • Reduces salary and non-salary cost transfers • Eliminates re-work for principal investigators, department administrators, and staff in central offices Sponsored Projects Training Program

  8. Evaluating Risk • Written confirmation from sponsor • Sponsor’s history with UVM • Negotiation risks Sponsored Projects Training Program

  9. What needs to be in place? –How? • Department or unit must assume risk • Written confirmation from sponsor • Proposal must be fully routed and approved • Regulatory requirements must be satisfied • IACUC, IRB, IBC, COI • Competed request form • Modified budget (optional) Sponsored Projects Training Program

  10. Limitations • Request 90-180 days • Can limit dollar amount • Any limitations of the sponsor Sponsored Projects Training Program

  11. Responsibilities • PI – initiating request, collecting required documents, spending within the constraints of AA • Unit – submit request, assumes fiscal risks, monitors, ensures expenses and encumbrances conform to advance account duration • VP or Dean of unit – assumes financial risk • SPA – advise on potential risk, confirm all regulatory approvals are obtained, approve AA and establish chart string, provide training Sponsored Projects Training Program

  12. What happens next? • Award received and accepted • SPA completes the set up process • Billing can occur • Or – no award is received charges need to be moved Sponsored Projects Training Program

  13. Resources • Monthly report • PS Query • UV_GM_FINDINGAWDTHRUREFAWD • It can be run on an ad hoc basis, by department number, award number, reference award number or wide open using wildcards.  The search fields are not case sensitive. • Can be used to locate an award if you only know the sponsor's award number • Can be run at any time to identify all advance accounts by department or for the whole university Sponsored Projects Training Program

  14. Questions? • . Sponsored Projects Training Program

  15. Cost Transfers Involving Sponsored Agreements Policy- Revision Update - Michael Meunier Cost Accounting Services (CAS) 1:30-2:30 Memorial Lounge December 8, 2011

  16. Cost Transfer Policy Topics • Policy Review Process • Cost Transfers at UVM • Key Policy Changes • Cost Transfer Form Policy current status: Campus wide policy comments on this policy are currently being considered. Sponsored Projects Training Program

  17. Cost Transfer Definition A cost transfer is the assignment of an expense to a sponsored agreement that was initially recorded elsewhere in the University’s general ledger. • Removal of an expense from a sponsored agreement to a non-sponsored chart string will continue to require an explanation and appropriate approvals. Sponsored Projects Training Program

  18. Cost Transfer Policy – Review Process • Profiled university cost transfer activity • Reviewed Grant Lifecycle Committee Report (August 2009) • Benchmarked other University policies/procedures • Analyzed key sponsor specific regulations • HHS, NIH, NSF, Federal Formula grants • Reviewed external audit reports and recommendations • Solicited feedback from Academic Business Managers Sponsored Projects Training Program

  19. Cost Transfers at UVM UVM has significantly more cost transfers, particularly late cost transfers, than similar Universities • Allowability concerns (red flag to auditors) • Inefficient use of University resources • Fiscal management of sponsored agreements Sponsored Projects Training Program

  20. Cost Transfer Policy – Key Changes • Accountability statement • Minimizing cost transfers • Timeliness • Approvals • Unallowable Expense Transfer Authority Sponsored Projects Training Program

  21. Key Policy Changes - Accountability All University personnel are expected to be aware of and comply with this University policy and the principles and requirements listed below. Confirmed violations will result in disciplinary action. In some instances, civil claims and criminal charges may also result. Sponsored Projects Training Program

  22. Key Policy Changes – Minimizing Cost Transfers • Charge only allowable expenses to sponsored agreements • Utilize advance accounts • Minimize posting expenses to department suspense • Quarterly meetings with PIs (Effort, Non-salary expenses) • Submit timely and relevant salary distribution changes • Reallocate PurCard expenses within University deadlines Sponsored Projects Training Program

  23. Key Policy Changes – Timeliness • 1) Identifying errors in a timely manner • Monthly verification of financial transactions (PMBR) • Department Suspense Review • 2) Timely Cost transfer Submissions • < 90 days after original accounting date (GL) • Salary transfers included (no more 30 day grace period) • Department submission dateis official submission date • Note: NIH only allows cost transfers within 90 days afterthe • error was discovered. Sponsored Projects Training Program

  24. Key Policy Changes – Justification / Documentation • Justification • Detailed explanation • Independent reviewer understanding • Subject to audit (No email threads!) • Supporting Documentation • Current Salary Distribution Form • Original Additional Pay Voucher (APV) • Project monthly budget report (non-salary xfers) • List of business meal attendees • Certified Effort Report w/ changes Sponsored Projects Training Program

  25. Key Policy Changes – Untimely Submissions Untimely Cost Transfer Submission (> 90 days) • Original General Ledger accounting date • Cost transfer requests > 90 days after the error is discovered is unallowable (NIH policy) Additional Written Justification Required • Lateness • Extenuating circumstances • Corrective action to prevent future occurrences Sponsored Projects Training Program

  26. Key Policy Changes – Required Approvals • Department Approval • No one person has complete control over all aspects of the cost transfer submission (Preparer, Approver) • Timely Cost Transfer Central Office (< 90 days) • Cost Accounting Services (CAS) Salary/Wages • Sponsored Project Administration (SPA) Non-Payroll • Untimely Cost Transfer Request (> 90 days) • Principal Investigator signature is required • Vice President signature is required Sponsored Projects Training Program

  27. Key Policy Changes – Transfer Authority ofUnallowable Expenses • Non-Payroll Expenses • SPA has authority to transfer expenses to department general fund account • Uncertified Payroll Charges • CAS has authority to transfer non-certified payroll expenses to the employee’s home department general fund chart string. • Note: Sponsored Projects Expense Transfer policy will be • eliminated. Sponsored Projects Training Program

  28. Cost Transfer Procedure & Form • Required for all cost transfer submissions • Salary Distribution Changes • Additional Pay Vouchers • Wage Transfers • Non-Payroll cost transfers (email form to SPA) • Cost Transfer Procedure/Form • Standard Form • Salary Distribution Form Sponsored Projects Training Program

  29. Cost Transfer Forms Sponsored Projects Training Program

  30. Cost Transfer Policy Summary - Key Changes - • Minimize cost transfers (Advance accounts, Prospective payroll distribution changes, timely PurCard transactions) • Timeliness (< 90 days) (Monthly PMBR review, Sufficient justification) • Untimely Cost Transfers ( > 90 days) (Additional justification and approvals, Corrective action) • Cost transfer procedures/form (Updated, standardized) Sponsored Projects Training Program

  31. Cost Transfer Policy Changes- Questions/Feedback - Sponsored Projects Training Program

  32. SPTP Residual Balance Procedure

  33. What is a residual balance? • Residual balance: For fixed-price agreements only, this is the term for any funds remaining after all charges have been incurred to complete the project and all project activities are complete. Sponsored Projects Training Program

  34. Current practice • Residual balances remain in sponsored project restricted chart string. • Project end-date is recorded as “indefinite.” • P.I. continues to expend funds for additional research. Sponsored Projects Training Program

  35. Current practice issues • Doesn't recognize the unrestricted nature of these funds. • Cost considerations, such as required effort and sponsor allowable costs are no longer applicable. • If federal, remains on Schedule of Federal Awards and subject to audit. Sponsored Projects Training Program

  36. New procedure for residual balances • Residual balances remaining at the conclusion of sponsored project funded by a fixed price agreement, less appropriate Facilities and Administrative (F&A) costs, will be transferred to an unrestricted chart-string for the Principal Investigator’s use. Sponsored Projects Training Program

  37. Conditions for transferring residual balances to department accounts • All deliverables have been received and accepted by the sponsor. • All costs for the project have been posted to the project’s chart-string. • All payments for the project have been received from the sponsor. Sponsored Projects Training Program

  38. Conditions for transferring residual balances to department accounts • The residual balance must be more than $200 direct. • If the residual direct cost balance is greater than 20% of the direct costs awarded, an explanation detailing why the actual direct costs were substantially less than anticipated is required.  • If the residual direct cost balance is more than $5,000, the intended use must be described. Sponsored Projects Training Program

  39. Process • SPA staff will follow the standard award closeout procedures for all awards within 90 days of end-date. • For balances greater than $200, SPA will contact the Principal Investigator and academic unit administrator for a residual funds chart-string request form. • Once all conditions have been met, SPA will transfer direct funds to unrestricted account. Sponsored Projects Training Program

  40. Re-Cap • Direct cost residual funds on fixed-price agreements will be transferred to unrestricted chart string for PI use. • Certain conditions have to be in place for this to occur (project complete, all expenses posted, large balances analyzed). • SPA will request the completion of a request form during close-out if funds remain. Sponsored Projects Training Program

  41. ? Questions?? Sponsored Projects Training Program

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