New Mexico State University Principal Investigator Presentation Spring 2009 Neta Fernandez,...

New Mexico State University

Principal Investigator Presentation

Spring 2009

Neta Fernandez, Director, Office of Grants and Contracts

Norma Noel, Associate Controller, Sponsored Projects Accounting

Goal:

• Provide an overview of the NMSU’s Research Administrative Offices by reviewing the roles of:– Office of Grants and Contracts– Sponsored Projects Accounting


Objectives:

• Review Departmental Procedures

• Review Regulations

• Review the Award’s Progression



Overview: Definition

• Sponsored Research Administration – the office(s) that sits between the researcher and the sponsor and has responsibilities to both entities. A key role of the office(s) is to respond to the expectations of both the researcher and the sponsor.

Sponsored Research Administration: A Guide to Effective Strategies and Recommended Practices, National Council of University Research Administrators. 2008 by Atlantic Information Services, Inc. and NCURA.


Overview:

• Early Days of Research Administration– Outbreak of World War II increased federal funding to colleges & universities

from $15 million to $1.3 billion by 1966

– Number of research offices grew also – almost three times as many offices est’d during 1961-1970 than in 1945-1960

– Higher Education recognized the need for “establishment of wide and stable policies for the management of research”

– The era of increased regulation was on its way as indicated by the Executive Branch - Bureau of the Budget Report in1966

– The report attempted to identify administrative procedures which fostered excellent research, assisted in strengthening the institutions engaged in federally funded research, and guarantee prudent stewardship of public funds


Overview:

• Increased Regulations, Focus on Compliance– 1970 and 1980s saw the period of greatest growth in regulations and compliance

activity– Research administration expanded role and now included ensuring implementation of

all sponsor requirements and assisting with the closeout activities• OMB Circular A-21, Cost Principles for Educational Institutions(1958, 1979, 1980s,

2004)• OMB Circular A-110, Uniform Administrative Requirements for Grants and Other

Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (1976, 1993, 1999)

• Single Audit Act 1984, implemented in 1985 via OMB Circular A-133, Audits of State, Local Governments and Non-Profit Organizations (2003)


Overview:

• Unfunded Mandates– Growth & complexity of federal regulations continued into 1990s and

currently – American Recovery and Reinvestment Act 2009– Key changes were the number of requirements imposed on

institutions whose associated costs were not recoverable through facilities and administrative (F&A) rates because of federal cap on the administrative portion of the rate

– The “unfunded mandates” impacted research administration activities• Conflicts of interest, misconduct in science and cost accounting

standards were just three examples of such mandates• As a result, sponsored program officers cont’d to shift from pure service

functions to control and compliance as a primary “reason for being”

Office of Management & Budget (OMB)

• OMB Website - http://www.whitehouse.gov/omb/• OMB A-21 -

http://www.whitehouse.gov/omb/circulars/a021/a021.html• OMB – A-110 –

http://www.whitehouse.gov/omb/circulars_a110/• OMB – A-133 -

http://www.whitehouse.gov/omb/circulars_a133/



Sponsored Projects Accounting (SPA)

Spring 2009

Agenda:

• SPA’s Role

• Definitions

• Regulations

• Progression of the Award

• Audits



SPA Overview:

Duties and Responsibilities Sponsored Projects Accounting, a group of professional accountants and support staff within Business, Finance and Human Resources focused on customer service, will assist the University by providing technical accounting support through financial reporting, transaction processing expertise, and interpretation of governmental regulations, thereby ensuring the data integrity of the financialinformation of the University.

We are uniquely positioned to provide financial accounting services to our internal customers within the context of the requirements of our external sponsors and auditors.

source: Sponsored Projects Accounting website (http://www.nmsu.edu/%7espa/)


SPA Overview

• SPA reports to the Controllers Office within Business, Finance and Human Resources

• Post award administration – responsible for what happens after the proposal is submitted and the award is made


Organizational Chart:


Restricted Operating Expense

$ Millions

123.4122.4

109.1110.4

Source: NMSU Annual Financial Reports 2008 and 2007


Facts:

• Fiscal Year 2008 Active Awards (status <> T):

– 2,335 grants/contracts/cooperative agreements• 4,470 funds• 8,312 indexes

Information Systems• SunGard Higher Education – Banner Finance

– Sponsored Research Accounting Module, official system of record

• Xtender – – Banner’s Document Management System– Documents are launched from Banner– Provides imaging and document management– Certified by the State of New Mexico

• COGNOS – – Banners Report Writing Database


Information System Access

• Banner – Request for Computer Systems Access - http://www.nmsu.edu/~boffice/forms/FSA_RequestForComputerSystemsAccess.pdf

• Xtender – once Banner access is granted email [email protected]

• Cognos – Request for NMSU Cognos Reporting Portal Access (requires Dean/VP approval) http://www.nmsu.edu/~boffice/forms/ADM_CognosReportingSecurity.pdf

• Human Resources – Training & Development– Newest: COGNOS Training – April 2009


Definition: Contract

An executive agency shall use a procurement contract as the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient when—

(1) the principal purpose of the instrument is to acquire to acquire (by purchase, lease, or barter) property or services property or services for the direct benefit or use of the United States Government; or

(2) the agency decides in a specific instance that the use of a procurement contract is appropriate.

Payor derives benefit


Source: Cornell University Law School U.S. Code Collection http://www4.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00006303----000-.html

Definition: Grant

An executive agency shall use a grant agreement as the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient when—

(1) the principal purpose of the relationship is to transfer a thing of value purpose of the relationship is to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or property or services for the direct benefit or use of the United States Governmentservices for the direct benefit or use of the United States Government; and

(2) substantial involvement is not expected substantial involvement is not expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.



Definition: Cooperative AgreementAn executive agency shall use a cooperative agreement as the legal

instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient when—

(1) the principal purpose of the relationship is to transfer a thing of value transfer a thing of value to the State, local government, or other recipient to carry out a public carry out a public purpose purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government; and

(2) substantial involvement is expectedsubstantial involvement is expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.




Definition: Gifts

• Defined – funds received for which no specific goods or services will directly benefit the sponsor

• Gifts can be made directly to the NMSU or to the University Advancement Office

• Types of Gifts – Unrestricted – can be used for any purpose– Restricted – once given to a certain area will be classified as such

Award Types

• Cost Reimbursable Cost Reimbursable – expenses are incurred and then invoiced for allowable costs, established budget

• Fixed Fixed - agency may provide some or all funding upfront prior to incurring expense, agreed upon price based on deliverable regardless of costs incurred

• Fixed/Cost ReimbursbleFixed/Cost Reimbursble


Research Team:



Team Focus:

• The Research• Compliance – expenditure monitoring• Timely & Accurate Invoicing & Financial Reporting• Collection of Funds• Effort Certification• Timely Closeout • Auditors and Audit Findings


OMB Circular A-21:

• OMB A- 21 - Provides principles for determining the costs related to “Sponsored Agreements” performed by colleges and universities under grants and contracts with the Federal Government.


OMB Circular A-21 – Cost Accounting Standards• CAS - states educational institutions expenses

should be: – Consistent in estimating a proposal– Consistent in accumulating and applying cost

acct’g practices which will facilitate the preparation of reliable cost estimates

– Consistent in reporting costs

OMB Circular A-21• NMSU’s CAS Template• Effort Reports• Disclosure Statement - DS2

– Required by Public Law 100-679 discloses NMSU’s cost accounting practices and details out indirect charges include in the facilities and administrative rate

• Faculty Member Salary Rates• Major Projects



OMB Circular A-21 Facilities and Administrative (F&A)

Rate

F&A Rate = Total F&A Costs

Modified Total Direct Costs


Facilities and Administrative Rate (F&A)

• Is a rate based on those costs that are incurred for common or joint objectives and cannot be readily identified to a sponsored program or activity

• A rate is calculated annually representing a % of indirect costs charged to sponsored programs


• 2008 - NMSU began negotiating every two years• Office of Naval Research (ONR), our cognizant

audit agency, approves• Billable Rate is the F&A rate approved in the award

and equals the rate for the life of the award (LIFER RATE)



• Effective Rate – Award Rate = Waived F&A

• Banner tracks and reports waived F&A as:– Voluntary (defined in proposal) or – Involuntary (agency imposed)



• The rate is applied to charges based on the award budget

• The most common method to apply the rate is the Modified Total Direct Cost (MTDC) basis

MTDC = Total Cost – Financial Aid – Subcontract > $25,000 – Equipment – F&A


OMB Circular A-110

Standards for obtaining consistency and uniformity among Federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals, and other non-profit organizations.


OMB Circular A-110

• Subpart A – General • Subpart B – Pre-Award Requirements• Subpart C – Post-Award Requirements

– Financial and Program Management– Property Standards– Procurement Standards– Reports and Records– Termination and Enforcement

Subpart D – After-The-Award Requirements


OMB Circular A-110

• Business Procedures Manual

http://www.nmsu.edu/%7eboffice/bpm/


OMB Circular A-133

• Purpose: it sets forth standards for obtaining consistency and uniformity among Federal agencies for the audits of States, local government, and non-profit organizations expending Federal awards.


OMB Circular A-133

• Part A – General

• Part B – Audits

• Part C – Auditees

• Part D – Federal Agencies and Pass-Through Entities

• Part E - Auditors


Subrecipient Monitoring (A-133)

• Require detailed monitoring procedures

• Include the– PI– Departmental Research Administrators– Office of Grants & Contracts– Sponsored Projects Accounting– Accounting & Financial Reporting


Participant Support Costs (Agency Specific)

• Stipends, allowances, registration fees for trainees require detailed monitoring– Allowable charges– F&A (NSF does not allow)– Trainee Lists– Documented Trainee Requirements


Federal Contracts

• Federal Acquisition Regulation (FAR)• Defense Acquisition Regulations System (DARS) develops &

maintains acquisition rules & guidance• Defense Federal Acquisition Regulaton Supplement

(DFARS) – apply to purchases and contracts by DoD contracting activites made in support of foreign military sales or North Atlantic Treaty Organizations cooperative projects without regard to the nature or sources of funds obligated


Award’s Progression



Award’s Progression:

1. System Administration – award set-up

2. Fiscal Monitors – expenditure monitoring, invoicing, financial reports, (cost sharing, program income, award terms and conditions)

3. Accounts Receivable/Special Projects – collection of funds, terming, audit requests, effort report certification


1st - System Administration

– Establish new awards in Banner Finance– Establish the initial documents for the electronic file in

Xtender– Record modifications to existing awards

• Extensions and revisions to existing awards

– Record award budgets and revisions– Encumber & track subrecipient awards


• Set-up accuracy is important

• Award Set-up has a 2-day turnaround goal

• Common Reasons for hold up:– Incomplete award information– Missing documents



• OptionsSetting-up Awards on Waiver – BPM Chapter 3

Sponsored Projects Accounting – Section 3.15.15

• Conditons:1) Prior program is being renewed

2) New program with a well-known sponsor

3) Terms & conditions are acceptable

4) Cost share/matching are acceptable

5) Substantial upfront costs are not required



2nd - Fiscal Monitors

Manage award expenditures by monitoring the implementation of fiscal restrictions and requirements imposed by sponsors on grants and contracts in accordance with Federal guidelines (OMB A-21, OMB A-110), agency guidelines, and the Business Procedures Manual.



• Invoice the Agency • Bill Allowable/Posted Expenditures by:

– Verifying expenditures are within project period– Budget categories are not exceeded– Expense is within scope of project– Reviewing for CAS compliance– Validating index, fund # and account code– Verifying expense is allowable per University/Agency– Monitoring for appropriate approvals



• Transactions requiring agency approval per A-21 Section J prior to expenditure: – Capital Equipment (in proposal-approved)– Foreign Travel– Material Expenses incurred near project end date



• Financial documents reviewed daily:– Budget Entries – Direct Pay Requests– Journal Vouchers– Labor Redistribution Forms (LRF) – Reimbursement Vouchers– P-Card Transactions– Purchase Requisitions


3rd - Accounts Receivable

• Payments are submitted to SPA• Deposits are recorded in Banner• Payments are posted on Grant by fund• Letter of Credit draws are prepared and authorized



• Outstanding Invoices are:– Aged – Collection procedures are based on the age of the invoice– Uncollectible invoices are written-off to colleges and

departments, in accordance with the NMSU Collection policy



• Closeout Process:• Final Financial Report(s)• Final Invoice• Agency Closeout Forms• Banner Terming - grant, fund and index(s)

3rd - Accounts Receivable• Reasons for no payment:

– Invoice formatting errors

– Unallowable expenses, questionable expenses

– Budget – overbudget by task, line item

– Wrong billing address

– Performance Issues, milestones not met

– Missing performance/financial reports

– Retainage requirements

– Federal invoicing changes (new software, security clearance required)


Audits:

• NMSU’s Audit Liason - Controller’s Office

646-2432

Meghann Hutchison – 646-7192


Audits:

• Types: – Pre-Award on Proposals– A-133 Audit– Internal– External – agency specific, Office of Inspector

General (OIG)



Audits:

• Auditor “Red Flags” and Risk Areas Transfers older than 90 days Transfers or purchases in the last month of the award or after the

award has expired Overruns from one sponsored project to another Questionable Expenditures Participant Support Costs i.e. stipends, allowances, registration fees

for trainees Effort Certification (can not certify own) Subrecepient Awards Progress Reports

Audits:

• Outcomes:– Favorable - indicates regulations are being

followed– Unfavorable, indicates audit findings and follow-

up with corrective action• Could result in disallowances for claimed costs/refund

to sponsor• Termination of agreement• NMSU no longer receiving awards from the agency


Audits

• Outcomes– Federal Government’s Debarred List– “Excluded Parties List System”

• Word Wide Web site provided as a public service by General Services Administration (GSA) for the purpose of efficiently and conveniently disseminating information on parties that are excluded from receiving Federal contracts, certain subcontracts and certain Federal financial and nonfinancial assistance and benefits


Audits:

• Advised Parties - varies based on audit:Board of RegentsPresidentAgencyAudit ServicesController’s OfficePI/Research AdministratorsSPAOGCApplicable Administrative Offices



Today’s Challenges: • Compliance• Electronic Research Administration• Management for Research not Management of Research

• management for research should entail a nourishing climate, sound policies, supporting services of various kinds, financial systems, and organizational arrangements that will help research to flourish

• facilitate, rather than direct, research

Contact Information:

[email protected] 646-1675Anderson Hall, Room E1200SPA Staff Directory - website


Working Together:


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