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Understanding Cost Sharing in OnePurdue. Business Office Showcase November 2007. Objectives. Review basic concepts of cost sharing in OnePurdue Review accounting entries associated with cost sharing for new grants established

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understanding cost sharing in onepurdue
Understanding Cost Sharing in OnePurdue

Business Office Showcase

November 2007

objectives
Objectives
  • Review basic concepts of cost sharing in OnePurdue
  • Review accounting entries associated with cost sharing for new grants established
  • Understand the impact of cost sharing entries on your general funds
  • Discuss next steps and options for moving forward
cost sharing defined
Cost Sharing Defined
  • Cost sharing refers to that portion of a sponsored project’s costs that are not borne by the sponsor.
types of cost sharing
Types of Cost Sharing
  • Formerly “Single Account” – now Grant Relevant Funds
  • Contributed Facilities & Administrative costs – both sponsor and cost sharing funds
  • Voluntary Cost Sharing – PI effort on grant, but no salary charged to grant
  • Memo Match – via another sponsored program or in-kind contribution
basic concepts single account
Basic Concepts – Single Account
  • A separate 011 fund no longer exists
  • Budget for cost share is established by SPS and is then pushed simultaneously to GM, on the appropriate Sponsored Program, and to FM on the responsible cost center as “Grant Relevant” funded program.
  • Once the budget is pushed to FM “Grant Relevant” a corresponding offset entry automatically occurs in FM on the responsible cost center as “Not-Relevant Grant” funded program.
basic concepts fringe benefits
Basic Concepts – Fringe Benefits
  • The budget entries established for cost sharing include salaries (505000), fringes (512000), and S&E (520000) costs, but not F&A.
  • When budgeting fringe benefits, if the fringes are funded centrally, SPS staff will prepare documents to transfer the amount budgeted for fringe benefits from the cost share reserve fund to the appropriate department not-relevant grant general operating fund account.
  • Future years fringe benefit return will be done at the beginning of the FY for all budgets previously established. This has no impact on current FY projection.
basic concepts f a
Basic Concepts – F&A
  • Facilities and Administrative Costs (F&A) are no longer budgeted or charged to internal funds associated with cost sharing. It will be calculated for billing purposes by SPS.
  • Departments & SPS need to be aware of this when doing cost sharing projections, especially for mandatory dollar amount cost sharing commitments.
  • Request to include F&A calculation on cost share included in reporting project “FSSR”.
cost sharing of f a
Cost Sharing of F&A
  • Cost share of Full F&A – No F&A allowed on sponsor funds, but counted as cost sharing.
  • Cost Share of Unrecovered F&A – difference between full F&A and lower F&A allowed on sponsor funds can be counted as cost sharing.
  • Cost Share of F&A on Internal Funds- This field is applicable when F&A has been included as a commitment at proposal time on the direct cost portion of the cost share funds.
slide11
VCS flag = “yes” on GMGRANTD/Reference Tab results in 5% of PI effort tracked by Costing for purposes of indirect cost study
memo match flag yes on gmgrantd reference tab signals a need to document this type of cost share
Memo match flag = “yes” on GMGRANTD/Reference Tab signals a need to document this type of cost share
gm account set up
GM Account Set-up
  • SPS establishes both an internal order (IO) and sponsored program (SP) through the GM module.
  • The IO/SP is the 10-digit number beginning with “8”.
  • All IO/SPs for a grant are tied together by the 6 digit grant number.
  • Cost sharing requires separate IO/SP(s) from those containing sponsor funds.
  • Each IO/SP has a responsible cost center (RCC) associated with it.
  • The RCC for each IO/SP is determined when the IO/SP is established through communication between SPS and relevant business offices.
establishing io sps
Establishing IO/SPs
  • There can only be one RCC per IO/SP.
  • The RCC should reflect the department that will be processing transactions/expenses against the IO/SP.
  • Cost sharing debits the not-relevant fund and RCC for the entire cost share, even if multiple funding sources are involved.
  • Business Offices will be responsible for doing FMBBs for funding from other sources to “reimburse” their not-relevant fund. SPS staff will assist in identifying these situations.
  • For DP awards, expenditure credit is driven by a reporting unit field, and not the RCC on the IO/SP.
reporting departments appear in the additional data tab of gmprogram
Reporting Departments appear in the additional data tab of GMPROGRAM

Reporting units One through Five for use across academic units to share expenditure credit.

Reporting units Six through Ten used to track Discovery Park expenditure credit.

establishing io sps18
Establishing IO/SPs
  • There can only be one fund - IO/SP combination for cost sharing.
  • Cost sharing can be established against not-relevant funds beginning with 2 (general), 3(Ag appropriated) and 5 (gift).
  • If you establish a separate IO/SP for each source fund, cost share expenditures would need to be prorated across the multiple IO/SPs.
  • More to come on how cost sharing entries appear on unbudgeted funds (e.g. beginning with 3 or 5).
let s work through an example us forest service grant 100788
Sponsor Funds:

Fund: 41100000

Sponsor IO/SPs

8000011295

8000019719

8000019798

Cost Sharing Funds:

Fund: 21030000

Cost Sharing IO/SPs

8000009954

8000016723

8000019799

Let’s Work through an ExampleUS Forest Service Grant 100788
let s look at one io sp for cost sharing
Let’s look at one IO/SP for Cost Sharing
  • Cost Share Fund 21030000 (formerly 014 funds)
  • IO/SP: 8000019799
  • Project Period: 8/1/07-7/31/08
  • RCC 4011015000 (Forestry)
budget establishment
Budget Establishment
  • Budgets should be established based upon the fiscal year commitment periods stated in Section B of the form 32.
  • Establishment of the budget by fiscal year replaces the future year liability process that existed in legacy.
  • Multi-year awards where only first year is authorized by sponsor present a challenge.
  • GM Budget Display shows how the cost sharing budget entries are established (obtaining Bus. Office access to this T-code).
gm budget display fy 2008
GM Budget Display FY 2008

Grant

IO/SP

Fund

RCC

FY

entries created fy 2008
Ledger: GM

Fund: 21030000

RCC: 4011015000

Salary: $5,461

Fringes: $1,923

Ledger: FM

Fund: 21030000

RCC: 4011015000

Funded Program: Not-Relevant

Salary: -$5,461

Fringes: -$1,923

Ledger: FM

Fund: 21030000

RCC: 4011015000

Funded Program: Grant Relevant

Salary: $5,461

Fringes: $1,923

Entries Created FY 2008

Equivalent to the 1008 done in legacy

entries created fy 2009
Ledger: GM

Fund: 21030000

RCC: 4011015000

Salary: $515

Fringes: $181

Ledger: FM

Fund: 21030000

RCC: 4011015000

Funded Program: Not-Relevant

Salary: -$515

Fringes: -$181

Ledger: FM

Fund: 21030000

RCC: 4011015000

Funded Program: Grant Relevant

Salary: $515

Fringes: $181

Entries Created FY 2009

Equivalent to “future year” 1008 done in legacy

transfer from cost share reserve fmbb prepared monthly by sps
Ledger: FM

Fund: 21030000

Funds Center: 4011015000

Grant: Not-relevant

Funded Program: Not-relevant

Fringe Benefits (512000)

$1,923 (2008)

Ledger: FM

Fund 21019000 (CS reserve)

Funds Center: 4099014001 (CS reserve)

Grant: Not-relevant

Funded Program: Not-relevant

Fringe Benefits (512000)

-$1,923 (2008)

Transfer from Cost Share ReserveFMBB prepared monthly by SPS
impact of cost sharing and projections
Impact of Cost Sharing and Projections
  • We can see the results of these entries in FMRP_RW_BUDGET
  • The set up of new cost sharing impacts the original budget columns for both Not-Relevant and Grant-relevant
  • The return of fringe benefits from the reserve impacts the Budget Changes column of Non-relevant
  • Carry-forward balance of prior year cost share (prior year Grant-relevant budget less Grant- relevant expenditures) appears in the Budget Changes column of Grant-Relevant
slide29

Not Relevant

Drill down into original budget

slide30

To drill down to transactions double click on original budget

Then double click on “Search Change Document” in window that appears

slide33

Grant Relevant

Drill down into original budget

slide35

Select the specific grant to see transactions related to it – but you can’t get to the IO/SP level here.

slide36

Not relevant

Fringe benefits returned appear in budget changes

slide38

On Grant Relevant, budget changes reflect carry-forward from FY 2007. i.e. the budget in Grant Relevant for FY 2007, less the expenditures on the grant for FY 2007. The adjusted budget, expenditures and carry forward here are not useful figures.

Progress against cost sharing commitments can best be seen through GM AIMS.

gm aims
GM AIMS

*Note: Fund IO/SP combination with no budget

*

gm aims41
GM AIMS

Note: no contributed F&A budget

the 1 12 issue
The “1/12 Issue”
  • The automated entries to FM that occur in GM grant establishment, post with 1/12 of the total in each month of the fiscal year.
  • This is hard-coded in SAP and Purdue cannot change
  • These entries are retroactive, e.g. a new grant with cost sharing established in June 2008, will impact all months prior in the FY.
  • Return of fringe benefits by SPS is a manual transaction, and the 1/12 does not occur.
fmeddw with periods set 0 3
FMEDDW – with periods set 0-3

Automated GM entries appear as 12ths

Manual fringe return entries appear in total

1 12 and fmrp rw budget
1/12 and FMRP_RW_BUDGET
  • A “fix” was placed into production this Fall on FMRP_RW_BUDGET so that the budget considers all periods, regardless of period selected on variable screen.
  • The same fix was applied to the FM AIMS reports.
  • Cost sharing entries appear in total on this report both in the summary and line item view.
  • The 1/12 can only be seen on the periods tab when drilling down to the transaction level.
  • This has the impact of the “month end” report changing if it is run at different times, i.e. FMBBs for non-cost sharing processed after the period end date selected on the report will appear on the report.
checking cost share set up
Checking Cost Share Set-up
  • Using FMEDDW (periods 0-12, all FYs), layout GMCSVER, review budget increases and decreases
    • Correct Fund
    • Correct Fund Center
    • Correct Fiscal Year
    • Funds required from other sources
slide47
Debit and Credits between grant relevant and not-relevant net to 0, with exception of fringe benefit return

Grant number appears in text on not-relevant entry

isolating cost sharing entry codes
Isolating Cost Sharing Entry Codes
  • In FMRP_RW_BUDGET
    • Budget Type: GM01 Grant Non-recurring
  • In FMEDDW
    • Budget Type: GM01 Grant Non-recurring
    • Entry Document Types:
      • GMOR GM Original
      • GMTR GM Transfer
    • Hint use GM* on Entry Doc Type on variable screen
challenges
Challenges
  • SPS experienced duplications of grant set up entries.
  • SPS experienced one-sided entries where simultaneous entries did not occur as expected.
  • These issues are corrected, but can complicate reconciliation process for department.
  • If the entries don’t make sense, contact SPS.
best practices
Best Practices
  • Business Office with overall responsibility for grant assume leadership for establishment of cost sharing IO/SPs and any transfers of funds.
  • Establish cost share IO/SPs based on budgetary program needs, not fund types.
  • Funds can be transferred across type to reimburse not-relevant fund.
  • Review set-up of cost share with each new grant.
  • Use cost share worksheet to track commitments and impact on general fund projections.
ideas for improvement
Ideas for Improvement…
  • Working with SAP to remove the 1/12 “feature” on the automated GM entries.
  • SPS has discretion to allow new grant entries to hit adjusting, rather than original budget. Which is better?
  • Use of a different fund – we would have to move all cost sharing funds to that new fund.
ideas for improvement53
Ideas for Improvement…
  • Use of a separate general fund cost center for cost sharing
    • This is possible within SAP/GM
    • We would still have to move all funds to this cost center
    • Account Management reports would need to be run on multiple cost centers to get all accounts
    • May be longer term reporting issues with ad hoc reports (awards vs. expenditures).
moving forward
Moving Forward
  • Many areas have been able to work through conversion entries and balances through FY 2007.
    • Contact Becky White for assistance with balancing accounts or unresolved issues
  • Obtain GM Budget Display role for Business Offices
  • Recommend working with the current system, entry types, funds, etc. through FY 2008
  • Reassess near the end of FY 2008 for potential changes/improvements for future
  • Provide additional training on cost sharing philosophy and process
  • Identify and utilize “experts” to assist others with understanding cost sharing entries