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Quick Links
Policies
Overview
All sponsored research agreements are subject to basic research policies enacted by the Corporation and the individual faculties. Below is a brief summary of these policies as they apply to the conduct of sponsored research. For research policies and procedures specific to your school, we refer you to the following list. If your school is not listed, please contact the Dean's Office within your tub.
Confidentiality and Publication
The University does not accept or agree to keep as confidential or proprietary, information that is germane to the work, required for publication of meaningful results and findings, and/or necessary for the verification of results by other scholars. The University will on occasion accept proprietary information from a sponsor provided acceptance is unlikely to preclude meaningful reporting of research results. The FAS permits institutional acceptance only in exceptional cases with the approval of the dean/designee.
Harvard does not accept publication restrictions in terms of content and timing of the release of findings, except for a 30+30 delay when patents are at stake.
Disclosure of Sponsor
The University allows anonymous gifts but expects the identity of a sponsor to be disclosed.
Classified Research
The University does not accept classified research. The PI must be able to report research results, although data that identify individuals, organizations or groups may be retained as confidential.
Technical Direction
The PI is solely responsible for the direction and management of the project and its outcomes. The University does not accept terms that would place the PI and his/her team under the direction or supervision of the sponsor.
PI Control of Conduct of Research
Unilateral changes by the sponsor are not permitted unless the agreement can be terminated if the changes are unacceptable.
Approval of Staff
The sponsor may only approve the PI; sponsor may not veto other staff members.
Results Responsibility of PI not Institution.
The University does not endorse research results or sponsors.
Financial Relationship with Sponsor
The University places responsibility for addressing financial conflicts by investigators with the Schools. If an investigator has significant equity in prospective sponsor, the Corporation is to be notified and provided details.
Protection of Students
Directing students into research from which the mentor may realize a financial gain requires review and approval (possible oversight) by the appropriate School committee. Special review is recommended if students are working on industry funded projects. Departments and faculty are expected to pay special attention to students' needs in order to ensure their intellectual development.
Authorship
There is no University policy regarding authorship. Each author is expected to make a significant intellectual contribution and the lead author to ensure authenticity of data.
Animals
Specific policies and procedures exist within each school in keeping with federal guidelines. Projects with animal work may not begin without the appropriate committee and departmental approvals.
Human Subjects
Each IRB has established its own policies and procedures in keeping with federal guidelines. Projects with human subject protocols may not begin without the appropriate committee and departmental approvals and completion of training by key personnel.
Hazardous Materials
Hazardous materials are managed by the University's Office for Environmental Health and Safety. Each investigator is responsible for obtaining the licenses and/or EHS approvals necessary for his/her research.
Intellectual Property Rights Granted to Sponsors
The University retains ownership of inventions made by Harvard faculty, but is not adverse to granting option and/or licensing rights to the sponsor. Such matters are dealt with on a case-by-case basis with guidance and oversight provided by the Office of Technology Development (OTD).
For general information on inventions:
Office of Technology Development (OTD) Faculty page
Research Materials
The University generally requires that all Materials Transfer Agreements (MTA) include language allowing for the replication of research results.
For additional information on MTAs:
Office of Technology Development (OTD) MTA page
Office of Financial Services (SPH)
Research Misconduct
Responsibility for establishing and implementing research misconduct policies and procedures rests with the Schools.
Reports are filed an annual basis with the Department of Health & Human Services (DHHS) Office of Research Integrity by HMS and SPH individually and OSP/Awards Management for the University Area schools.
distributed by Marilyn Hausammann and Elizabeth Mora.Sponsored Programs & Budgeting under Harvard University's New Vacation Policy
The University will soon implement PeopleSoft's Absence Management module to manage paid time off for exempt and non-exempt employees.
As part of this implementation, Harvard will modify its accounting practices and vacation policy to more accurately account for and fund the University's
vacation liability as it is earned. Effective July 1, 2007, Harvard will begin charging a vacation assessment on all exempt and non-exempt salaries in all
funding sources, including sponsored and non-sponsored. Please note that the vacation assessment does not apply to faculty or postdocs.
It applies only to exempt and non-exempt staff paid through object codes 6050 or 6070. All University payroll transactions in these object codes will be
charged a vacation assessment rate of 10.5% of base salary for exempt staff and 9.8% of base salary
for non-exempt staff, in addition to the regular fringe benefits rate already being charged. The dollars accumulated from the vacation assessment will be pooled
in a central vacation account that will be used to fund vacation payments as people take vacation beginning July 1, 2007.
How This Change Affects Sponsored Awards
Sponsored awards will be charged for vacation as it is earned, rather than as it is taken (as has been the case historically), for exempt and
non-exempt employees. In other words: vacation taken will no longer be permitted as a direct charge to sponsored research awards. As employees take vacation, the central
vacation pool will fund vacation salary and, therefore, the salary of an individual will not be charged to an award when that individual is on vacation. As a result of this
change in policy, sponsored awards will not pay for vacation earned on prior awards and all awards will pay their share of vacation as earned by employees on the award,
regardless of when the employee chooses to take vacation. After the initial historic liability is funded, departmental funds will not be needed to support vacations for employees
whose projects are closed or do not have sufficient balances to fund employee vacations. (Please note that vacation earned, but not yet taken, as of June 30, 2007 represents an
"historic liability" that cannot be funded by sponsored awards since our agreement with the federal negotiators does not allow it. For more information on the historic liability
please contact your School or Unit's Financial Officer or the Office of Budgets, Financial Planning and Institutional Research).
Changes to Sponsored Budgets
Effective immediately, grant managers should begin using the new vacation assessment rate for all exempt and non-exempt staff as they develop proposal budgets
(see "Fed Budget w/Vacation Assessment" and "Non-Fed Budget w/Vacation Assessment" budget examples attached). Again, please bear in mind that the vacation
assessment does not apply to faculty or postdocs.
When preparing grant application budgets, it is not necessary to request salary dollars for a full 52 weeks since any vacation an employee takes during the award will not be charged to the award but will be charged against the central vacation pool. Principal Investigators and Grant Managers, therefore, will need to make a reasonable estimation of the vacation that will be taken in the upcoming budget period. Based on historical data from payroll, staff take an average of 3 out of the 4 weeks of vacation earned each year. Therefore, for a full year budget period, a reasonable estimate for budgeted salary would be 49 weeks plus fringe and the vacation assessment (see aforementioned budget examples attached - additional examples will be posted to the OSP web site in the coming days). It is important to remember that the vacation pool will be funded by the vacation rate assessed on the original funding source as salary is earned. There will be no salary, regular fringe or vacation assessment charges to the award when vacation is taken. The additional amount paid by the fund through the vacation assessment, therefore, will be offset by reduced salary charged when the vacation is taken. So to summarize: if all exempt and non-exempt employees on the grant take as much vacation as they earn during the year (e.g., 4 weeks of vacation is expected to be earned and taken by an exempt employee in a given year, so 48 weeks of salary is anticipated and budgeted) the result to the project's bottom-line will be budget neutral.
A vacation assessment template is attached (see "vacation assess template for schools-depts") to illustrate the financial impacts of the new vacation assessment. Simply enter the annual salary and you will see the financial impact of taking 0-5 weeks of vacation.
Budget Justification
Effective immediately, please also include the following statement in your budget justification:
The staff salary expenses in this budget were calculated in accordance with the Harvard Treatment of Paid Absences portion of Section II of our rate agreements negotiated with the Department of Health and Human Services on April XX*, 2007. Harvard will begin using a vacation accrual beginning July 1, 2007. Paid absences for vacation will no longer be claimed as direct charges on federal awards and regular salary will carry a vacation fringe to accrue earned vacation.
*Substitute dates below as appropriate:
- SPH - April 18, 2007
- HMS - April 18, 2007
- University Area - April 13, 2007
Risks
Please keep in mind that a staff member who is part-time but who would be over the cap if they were 1.0 FTE must also be capped but at the appropriate proportional amount.
Final Thoughts
Forms
Click here to review Absence Management Examples, Resources, and Templates.
Requesting an Advance Account
A PI initiates a request and submits it to his/her department or school, which in turn requests an advance account from the appropriate pre-award office on the PI's behalf.
Advance Account Request Form
Establishing an Advance Account and Possible Negotiation Issues and Risk
In the majority of cases, OSP/AM, SPA or OFS will establish an advance account upon request because the University has an established history with the sponsor, and the issues to be reviewed prior to executing the requisite agreement are routine. There are some cases, however, where significant negotiation of areas of concerns to the PI, the department and/or school, and the University may be required. In these instances, prior to establishing the account, the pre-award office representative will identify areas of concern and the associated financial and non-financial risks, to the extent these risks can be identified, to ensure the PI and his/her department or school are aware of the risks they are accepting. The pre-award director may also review the request to assess risk before the account is established and may share his or her views with the PI and department/school before approving the request.
Examples of negotiation issues include, but are not limited to, control of scope of work and key personnel; publication restrictions and confidentiality requirements; lack of criteria for acceptable performance; intellectual property terms; termination and default clauses; and indemnification.
In requesting and accepting an advance account on behalf of a PI, the department or school assumes the financial risk in the event the award is not made, not accepted, or if the terms of the award deem certain expenditures to be unallowable. (With the exception of GSE, the department assumes the financial risk. In GSE, the school assumes the financial risk.) The pre-award office will use its best efforts to finalize an award, but cannot guarantee a successful outcome of any award negotiation.
Time Period
Ordinarily, an account may be in advance status no more than 120 days from the start date of the advance account budget period. With the exception of financial aid or scholarships (e.g., Jacob Javits Fellowship, Federal Pell Grant Program, NSF Graduate Research Fellowship Program) and grants transferred into Harvard (i.e., awards new faculty bring with them from another institution), advance accounts that have not been converted to active status within 120 days of the start date of the budget period may be subject to an interest charge on expenses.
Using Advance Accounts
Advance accounts should be used prudently. Only those costs that are incurred:
As stated previously, any expenditure incurred while an account is in advance status is made at the department's or school's risk. At the time of initial account request, the department or school designee is required to agree in writing to cover any expenditure if the award is not made or if sponsor awarded conditions preclude reimbursement for expenses that precede the award start date or are otherwise deemed unallowable and to provide an account number should it be necessary to transfer expenses.
Pre-Award Spending and Advance Accounts
While PI's may also use the Advance Account Form (AAF) to request pre-award spending, i.e., approval for costs to be incurred prior to the starting date of the award, authorization of pre-award spending should not be confused with authorization of an advance account. Ordinarily, pre-award expenses require completion of the UPAS form. The AAF can now be used to request simultaneous approval of pre-award spending, an allowable cost on many federal awards, and establishment of an advance account. Before incurring pre-award expenses, the PI should consult with his/her pre-award sponsored research representative to confirm whether pre-award expenses are permissible under the applicable sponsor regulations or terms.
Monitoring Advance Accounts
On a monthly basis OSP will provide each school and the three pre-award offices with a report that lists all advance accounts and includes account number, PI, core award number (if available), sponsor name, projected budget period, funding amount authorized for pre-award expenses, and cumulative expenditures. Based on these monthly reports, accounts in advance status beyond their effective dates will be identified by the appropriate pre-award sponsored research representative for discussion with the PI and school or department to identify reasons for the delay and possible solutions. Throughout the advance account period it is the responsibility of the PI, department/school and pre-award office to keep each other apprised of developments regarding award notification, acceptance, and negotiation.
Removing an Account from Advance Status
Upon acceptance of the award by the University, the account will be removed from advance status by the pre-award office. The department/school is responsible for removing expenditures from the advance account if the award is not made, not accepted, or if the terms of the award deem expenditures to be unallowable. If expenditures are not removed from the advance account within 30 days of written request of their removal, OSP/Financial Services will transfer the expenditures to the designated account provided by the department/school at the time the advance account was established.
Advance Accounts for National Institutes of Health (NIH) Non-Competing Continuation Awards
In the case of NIH non-competing continuation awards, the NIH has committed to fund the project for multiple years provided the research is going well and funding is available. Recognizing this, upon department/school request the pre-award office will issue advance account numbers for NIH non-competing grants that are assigned a new account number for each non-competing year.
At least four months (120 days) prior to the next budget period start date, the designated sponsored research administrator within the school or department will receive a report from the pre-award office listing NIH non-competing awards. The department and PI will have 30 days to request an advance account, which will be established by the pre-award office no less than 60 days prior to the next budget period start date.
Advance Accounts for All Other Awards
All requests must be submitted using the Advance Account Request Form (AAF) accompanied by a copy of the approved proposal and, if available, the award document, unless these documents are on file in the pre-award office.
Signature Requirements
Unless specified below, prior to submission to the pre-award office, signatures of the PI/Project Director, Department Chair/Designee or Research or Department Administrator, and the Dean/Designee or Lab Director are required on the AAF. The pre-award office will review and respond to the request within five (5) business days of receipt.
In GSE, the signatures of the PI/Project Director, the Department Chair/Designee, and Director of Sponsored Projects are required.
In FAS, in addition to the individuals named above, the signature of the Assistant Dean for Research Policy is also required. In DEAS, the signatures of the PI/Project Director and Associate Dean for Administration are required.
In HMS and the School of Dental Medicine, only one signature is required at the department level, in addition to the signature of the Dean/Designee.
In SPH, the signature of the Research or Department Administrator is acceptable only if this individual serves as the department chair's designee.
In UHS only the signature of the PI/Project Director is required.
Approved by SPOC, 2/26/04
Background
In order to provide greater clarity, Harvard has developed the following accounting guidance related to staff maternity leave absences. Generally, Harvard employment policies make a distinction between maternity leave and parental leave. Maternity leave is treated as short term disability and is charged to tub 650 by tub human resources offices in coordination with the Benefits Services Group. Parental leave is considered paid time off and should be charged to the fund or project where regular pay would have been charged. In addition, with approval some employees can use up to one week of their earned vacation time or personal time to extend their parental leave. This guidance is intended to answer questions about accounting for these absences; questions regarding the benefits themselves should be directed to Human Resources.
Maternity and Parental Leaves
Harvard's 13 week maternity policy for birth and adoptive mothers begins with the birth or adoption of the child and includes up to 8 week's of pay under the University's Short Term Disability Plan. The 8 weeks of short term disability is a fringe benefit and is funded centrally; it cannot be charged to sponsored awards and is not considered paid time off.
Up to 4 weeks of parental leave with pay (determined by length of service) is provided for birth and adoptive parents and birth fathers. This time is considered paid time off and is funded by the same sources that would fund regular pay. It is allowable on sponsored programs, including federal awards, according to the University's rate agreements where the accounting treatment for paid absences is described. Under Section II, Special Remarks, of the University's three separate rate agreements indicate that "Sick leave, holiday pay and other paid absences are included in salaries and wages and are claimed on grants, contracts and other agreements as part of the normal cost for salaries and wages". Approved parental leave is, therefore, allowable as a direct cost on sponsored programs according to Harvard's three rate agreements.
One additional week of absence is sometimes allowed by Harvard policy and is funded from earned vacation or unused personal leave. In cases where this time off is approved as vacation time, the time should be funded by the vacation pool. In cases where this additional time is approved as personal time, it is considered paid time off and can be charged to the employee's normal funding sources, including sponsored awards. In either case, the employee's vacation or personal time balance is reduced by the amount of leave taken, unlike parental leave.
Federal Guidance:
No explicit federal guidance exists for maternity leave for employees. Guidance regarding the allowability of all costs, including maternity leave, comes from two primary sources: A-110 and A-21. A-110 Subpart C, Section 27 indicates that allowability is determined by A-21. A-21 J.10 a. indicates that the established university policies prevail.
Universtiy Guidance:
The University policy regarding Staff Parental Leave can be found on Harvie at: http://harvie.harvard.edu/benefits/timeoff/parentalleave.shtml
FAQs
Q: Can I charge all thirteen weeks of maternity leave to a sponsored project? A: No. Eight weeks of short term disability is charged to a central tub as coordinated with a tub's human resources office and the Benefits Services Group. Up to four weeks of parental leave can be charged as paid time off to a grant in proportion to the normal percentage of effort associated with the project(s). The thirteenth week can be taken as vacation time or personal time. In accordance with Harvard's Treatment of Paid Absences agreement with the government, vacation time is funded by the vacation pool (i.e., not charged to sponsored programs) and personal leave is direct charged to a sponsored project as paid time off.
Q: What object code should I use to charge the four weeks of parental leave to? A: Charge parental leave to the standard salary object code used for the employee's regular pay.
Q: If you are the dad of a new born, can you direct charge the 4 weeks of leave to a grant? Do you have access to the 8 weeks of STD benefits? A: Questions regarding employee benefits should be handled by tub human resources offices. Once the tub human resources offices and department HR office has determined what benefits are available if the leave is short term disability, parental leave or the 13 week maternity leave, this accounting guidance can assist in ensuring compliant accounting.
Q: Are post doc associates considered part of any of the employee groups noted above? Are faculty? A: No, this accounting guidance for maternity and parental leave only applies to Harvard staff (administrative and professional, overtime eligible, non-bargaining unit and staff covered by the Harvard Union of Clerical and Technical Workers (HUCTW)). Practice varies across tubs so please consult your specific department or tub Human Resources offices for additional guidance.
Background
Ideally, Harvard would have an accrual based accounting system that would charge all paid time off (PTO) and a provision for severance costs as these costs were earned. The accrued benefits representing PTO and severance would then be "pooled" and available to be used when needed, as all sources of payroll (sponsored and non sponsored) would have been charged along the way. Since we don't have a Generally Accepted Accounting Principles (GAAP)-compliant accrual based accounting system yet we have come up with the following charging principles in order to ensure compliance with federal regulations and university policies and to ensure consistent application of these principles across all units. These charging principles are based on our understanding of the OMB Circular A-21 Cost Principles, discussions with the Office of Inspector General - HHS, consultation with senior tub administrators and a survey of peer institutions.
Federal Regulations
Guidance regarding severance expenses comes from two primary sources:
NIH Grants Policy Statement, Part II, Subpart A, Cost Considerations
Severance Pay
- Allowable only to the extent that such payments are required by law, are included in an employer-employee agreement, are part of an established policy effectively constituting an implied agreement on the part of the organization, or meet the circumstances of the particular employment. The amount of severance pay to be provided should be determined according to established organizational policy consistently applied regardless of the source of funds and should be reasonable, taking into consideration the practice of similar types of organizations and the extent of the organization's dependence on Federal funds. The applicable cost principles should be consulted regarding the different treatment of severance pay in regular and mass termination situations.
OMB Circular A-21, Section J.10.h
Severance Pay
- Severance pay is compensation in addition to regular salary and wages which is paid by an institution to employees whose services are being terminated. Costs of severance pay are allowable only to the extent that such payments are required by law, by employer-employee agreement, by established policy that constitutes in effect an implied agreement on the institution's part, or by circumstances of the particular employment.
- Severance payments that are due to normal recurring turnover and which otherwise meet the conditions of subsection (1) may be allowed provided the actual costs of such severance payments are regarded as expenses applicable to the current fiscal year and are equitably distributed among the institution's activities during that period.
- Severance payments that are due to abnormal or mass terminations are of such conjectural nature that allowability must be determined on a case-by-case basis. However, the Federal Government recognizes its obligation to participate, to the extent of its fair share, in any specific payment.
- Costs incurred in excess of the institution's normal severance pay policy applicable to all persons employed by the institution upon termination of employment are unallowable.
Charging Severance Expenses against Federal Grants Awarded to Harvard
Given the federal guidance detailed above, and in keeping with Harvard's own internal policies, the charging of severance expenses against federal awards is allowable provided:
FAQs
(1) Q. I charge severance against non-federal awards?
A. Yes, to the extent that such charges comply with the provisions listed above for federal awards.
(2) Q. May I charge work security expenses, as well as severance, for my non-exempt employees?
A. Yes, to the extent that such charges comply with the provisions listed above. In most cases it will be possible to charge work security or severance but not both to awards that have ended, owing to the fact that work security typically extends beyond the 90-day cost transfer window.
(3) Q. If I have to lay-off the person well before the grant ends, can I pay both work security and severance from the award, since we're not yet into the 90-day reconciliation period?
A. Yes, once again assuming the proportionality principle is met.
(4) Q. What does "proportionality principle" mean? May I charge my 3-year award with severance for a staff member who has been working in my group for 10 years, since this is the last and only source of funding for this employee and he worked 100% of his time and was paid 100% of his salary from this award?
A. Like all expenses against federal awards, severance expenses must be charged in proportion to the amount of benefit received by the project. In this case, you may charge 3 years worth of severance against the grant if the individual was charged 100% of his time and paid 100% of his salary from this award.
(5) Q. What if I don't have any other funding sources? Where does the difference come from?
A. It is up to each Tub to determine and communicate internally how these costs should be funded if there is no available source of funding at the PI or org level.
(6) Q. How do I handle people paid from multiple grants? That is, can I charge severance to a grant that isn't ending if the employee is split-coded between that grant and one that is ending?
A. Yes, again, it is appropriate and allowable to charge severance against any open award (or within the 90 day reconciliation period on a closed award) provided the amount of severance charged to both is proportional to the benefit received by each project. For example, if a person works 50% on a grant that is ending, and 50% on a grant that will remain active, both awards may be charged 50% of the severance (with the total amount being determined by how long the person has worked at 50% effort on each of the awards).
(7) Q. If the grants belong to different PIs, should the second PI be responsible for a severance situation caused by the first PI?
A. Unless other arrangements are made (e.g., the employee opts to remain at 50% on the one award, or the Department/School offers to pay the second part of the severance), yes, the second PI should be responsible for covering his/her proportion of the severance expenses.
(8) Q. What's the standard for deciding whether two consecutive grants are part of the same project or not?
A. Grants are part of the same project only if they represent different segments of work generated from one original award (e.g., NIH competing continuation projects). "Closely related" projects can not be considered the same project, and they may not share in the severance burden that may apply to one of the closely related projects.
(9) Q. A-21 references the current "fiscal year" with respect to severance expenses. Doesn't this mean I'm limited to reimbursing severance expenses for this fiscal year only (vs. being able to charge multiple years of severance in proportion to the benefit received)?
A. Given that we don't have accrual accounting, and given that (per A-21) "..the Federal Government recognizes its obligation to participate, to the extent of its fair share, in any specific payment", it is acceptable to extrapolate beyond the current fiscal year but charges may only be made against the specific project (vs. multiple, closely related projects).
(10) Q. Do these principles apply to paid-time-off (PTO) as well (e.g., vacation, sick leave, family leave, etc.)?
A. Yes, generally speaking the principles described here should form the basis for addressing similar questions with respect to PTO, except for vacation. Please see more on PTO under the topic "Absence Management" on OSP Homepage>Quick Links> Training>Presentations & Guides.
Cost Sharing is defined as any project cost not borne by the sponsor. Federal cost accounting rules, adopted by OMB A-21 in 1996, have made identification of and accounting for cost sharing highly visible audit areas in recent years. Below are links to recent guidelines and identification formats developed by the University.
Guidelines
Cost sharing is defined in the federal regulations as project costs not borne by the sponsor. There are three general categories of cost sharing and the University handles the documentation of them differently.
All cost sharing instances must be documented by the University whether the sponsor requires an accounting of it in a financial report or not.
Note: Individual school cost sharing policies are established at the tub level. If you have any question regarding an individual school's policy, please address that question to that school's financial dean.
University Cost Sharing
First, there is University Cost sharing. Harvard defines University cost sharing as project costs not borne by the sponsor but directly borne by the University itself. The University funds are derived from gift, endowment, and other non-sponsored sources as represented by the 000001- 054999 and 300000-699999 ranges in the fund segment of the Chart of Accounts.
When University Cost Sharing is proposed, the Harvard University Cost Sharing Identification and Tub/Org Approval Form must be completed.
Each tub has determined when certain types of expenses are to be documented on the form during the grant and contract proposal and negotiation stages. For example, the Kennedy School of Government requires completion of the form for internal review and approval at the proposal stage for all such expenses. Some tubs do not cost share faculty effort. Others do, but the form is completed only if the proposal is funded. In many situations, OSP cannot establish an account until the form is completed.
For more information about how each school handles the documentation, see the form and the cost sharing matrix that outlines procedures for form completion and briefly overviews the policy and procedures established by each tub/org.
It is important to note that the form must be completed, and/or updated at key points during the life cycle of the award/project to accurately reflect the current status of cost sharing for the award/project. These key points are:
Cost Sharing Derived from Existing Sponsored Grants and Contracts
In this category, there are cost sharing/matching funds that are derived from existing sponsored grants and contracts. These existing accounts do not need to be documented on a Cost Sharing Identification Form.
Instead, please provide the existing sponsored account numbers on the school's proposal approval form or in a note attached to the proposal package for OSP's internal review. If an award is made and the terms are such that cost sharing must be reported to the sponsor, OSP will need this information to prepare the required financial reports. If there is no reportable cost sharing, for audit purposes, it would be helpful for OSP to have this information on file, but ultimately is the tub's/org's responsibility to maintain this information in the event of an audit.
Cost Sharing Commitments in Proposal Funds Not Yet Secured
In this category, there are cost sharing/matching commitments made in the proposal, but the funds have not yet been secured. In these cases, the principal investigator has anticipated that income will be secured from other sponsored sources that can be rolled into the particular agreement being proposed.
Although no cost sharing documentation is required at the proposal stage, the tub/org is accepting financial responsibility for the scope of the project proposed and the obtainment of funds in support of it. Should an award be made, regardless of whether or not the sponsor requires the reporting of the cost sharing, an account will not be established at OSP for the project unless the cost sharing/matching commitment is clarified and secured in one of the following ways:
Additional Guidelines
The preferred form of cost sharing is costs deemed "direct costs" per our DS-2 (faculty salary, lab supplies, etc.); however, with appropriate approvals, we can cost share waived or foregone F&A on the project (the difference between our published F&A rate and the lower F&A rate applicable to the cost-shared project). To share costs deemed "F&A" (rent, equipment depreciation, etc.) with federal funds presents a cost accounting standards inconsistency. However, indirect costs may be offered as cost sharing under the following special circumstances:
Matrix
The Cost Sharing Matrix 
indicates for all schools/programs when in the proposal submission process the Cost Sharing form is required.
Cost Sharing Forms
Cost Sharing Form for University Area
FAQs
(1) Q. What is cost sharing?
A. Cost sharing is defined as project costs not borne by the sponsor.
(2) Q. How is cost sharing accomplished?
A. Cost sharing is accomplished through:
(3) Q. Why does the University need to track cost sharing?
A. Federal regulations require full accountability for costs committed in the fulfillment of sponsored programs. Cost Accounting Standards require that costs proposed on a sponsored application be accumulated and reported on completely and accurately.
The University's accounting system cannot track costs funded through 000001 - 054999 and 300000 - 699999 funds (often referred to as University funds, e.g., unrestricted operating, endowment accounts, current use gift accounts, special receipt accounts) used as cost sharing in support of sponsored projects. If a sponsor requires financial and/or narrative reports on total project costs (including other sponsored agreements directly related to the project), it is the responsibility of the PI and department to monitor, track, and assist OSP Financial Services with the reporting requirements.
(4) Q. What types of expenditures may be cost shared?
A. Cost sharing may consist of direct expenses such as faculty effort (and thereby related salaries and fringes), lab supplies, equipment, and travel.
(5) Q. What types of expenditures may not be cost shared?
A. Any expense that the University has defined as an indirect cost, such as administrative salaries, office supplies, and operations and maintenance expenses, may not be cost shared. Also, salary dollars in excess of regulatory salary caps, such as the NIH salary cap (even if the effort expended in the support of the sponsored award exceeds the salary cap) may not be cost shared. Unallowable costs as defined in Section J of OMB Circular A-21 may not be cost shared.
(6) Q. What is the difference between "mandatory" and "voluntary" cost sharing?
A. Mandatory cost sharing is required by the sponsor as a condition of the award. Ordinarily this requirement will be indicated in the program announcement. Voluntary cost sharing is not required by the sponsor but is nevertheless offered in the proposal by the investigator; ordinarily this is in the form of contributed effort. Cost sharing that is proposed voluntarily by the investigator becomes mandatory (or also known as 'voluntary committed' cost sharing) once the award is made. One other kind of voluntary cost sharing occurs in the case of overruns or overexpenditures, if the additional costs are covered by University funds. All cost sharing, whether mandatory or voluntary committed, must be tracked and accounted for.
(7) Q. Can you provide some examples of language in a proposal that would or would not be considered cost sharing for accounting and reporting purposes?
A. The following statements in the proposal budget or budget justification would be considered cost sharing:
The following statements would not be considered cost sharing:
(8) Q. What should happen if the award is cut?
A. If the award is cut so that the scope of work cannot be performed with the available funding, and therefore additional funding from University resources is needed to complete the project as described in the original proposal, a cost sharing form is required at the award stage. It remains the responsibility of the Principal Investigator to determine whether and to what extent cost sharing will be required if an award is reduced.
(9) Q. Are other sponsored funds used on a project considered cost sharing and if so, is a form required?
A. Any cost of the project not borne by the sponsor is cost sharing; however, the purpose of the form is to track costs funded through University funds used in support of sponsored projects. Our system already allows us to identify and account for cost sharing accomplished through other sponsored funds; in such cases a cost sharing form is not required. It remains the responsibility of the individual Principal Investigator and department to ensure that other sponsored funds used as cost sharing on sponsored projects are:
(10) Q. Do I fill out a cost sharing form for both federal and non-federal sponsored proposals?
A. Yes.
(11) Q. How should in-kind contributions be shown on the cost sharing form?
A. Donated or in-kind contributions should be described on the form in the same level of detail as shown in the proposal budget. An attempt should be made to accurately estimate the value of the in-kind services at the time they are offered in the proposal.
(12) Q. How do I know what indirect cost rate (also known as the Facilities and Administrative [ F&A ] rate) to use to calculate the F&A column on the cost sharing form?
A. The appropriate federal negotiated rate should be used: organized research, other sponsored activity, or off-campus rate. If you are unsure of the appropriate rate, contact your tub financial officer for the information. The rate is multiplied by the direct costs being cost shared, except for equipment, subcontracts, or internal computer services. These items do not bear indirect costs. Recall that the F&A rate is not what the sponsor will pay, but rather what it costs the University to conduct the project; for this reason, the appropriate federal negotiated rates should be used to complete the form, not the sponsor's rate.
(13) Q. What do I do when I have a proposal with cost sharing of both faculty effort and other costs (equipment, supplies, etc.)? Do I file two cost sharing forms, one at the proposal stage and one at the award stage?
A. The cost sharing form for equipment and supplies is required at the proposal stage; the form for faculty effort is not required until the award stage.
(14) Q. Is a cost sharing form required at the award stage if the form filed with the proposal already included faculty effort?
A. If the award has been revised to the extent that it would alter the faculty member's effort and/or decisions have been made on outstanding proposals altering the faculty member's efforts as originally proposed, a form must be filed indicating the revised amount of the faculty member's effort. If no revision has been made, no additional form is required. It is the responsibility of the PI to determine if a revised form is needed.
SERIES: FINANCE & ACCOUNTING POLICY TITLE: COST TRANSFERS NUMBER: FA1 EFFECTIVE DATE: MARCH 1, 2008 REVISION DATE: FEBRUARY 14, 2008 RESPONSIBLE OFFICE: OFFICE FOR SPONSORED PROGRAMS
Policy Statement
To comply with the requirements of OMB Circular A-21, the policy of NIH, our largest source of federal research funding, and the requirements of other federal sponsors, Harvard University has established the following policy and procedures for the processing of cost transfers.
Definition
A cost transfer is a transfer to a federally funded sponsored account of a charge previously recorded elsewhere on Harvard's General Ledger. See FAQ #4
Examples:
Reason for Policy
To comply with the cost allowability and allocability requirements of OMB Circular A-21, it is necessary to explain and justify transfers of charges into federal awards from other federal accounts, non-federal accounts or University accounts (including transfers from a departmental cost share fund to a sponsored project fund). Timeliness and completeness of explanation of transfer are important factors in supporting allowability and allocability in accordance with the principles of the Circular.
NIH Grants Policy Statement (12/01/03, pp.83-84) states:
"Cost transfers to NIH grants by grantees should be accomplished within 90 days. Transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee. An explanation merely stating that the transfer was made 'to correct error' or 'to transfer to correct project' is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42 [record retention requirements] and must make it available for audit or other review. Frequent errors in recording costs may indicate the need for accounting system improvements and/or enhanced internal controls. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s)."
Who Must Comply
All individuals in Harvard University schools, tubs, local units, Affiliate Institutions, Allied Institutions, and University-wide Initiatives that transact to the federal sponsored fund range.
Responsibilities
Tub finance offices are responsible for ensuring that local units abide by this policy and accompanying procedures when processing cost transfers. The Office for Sponsored Programs (OSP) is responsible for maintaining the policy and for answering questions regarding the policy. Individuals processing cost transfers are asked to first contact their tub finance offices with questions on this policy, to ensure that tub finance offices are aware of cost transfer questions and that consistent guidance is provided within each tub.
It is the responsibility of each school or other local unit to:
Procedures
All journals of previously incurred charges to federally sponsored awards are cost transfers, even if they meet the following criteria and do not require a cost transfer form and documentation. The Batch Name for the journal should use the proper cost transfer naming convention: "CT^TUB^DEPT^ Preparer's Initials^Description^Date (or Date Range) of original transaction(s)," and the Transaction Line Description should describe the journal or, if the explanation would be too long and a CT Form was submitted, reference that Form (e.g. "Transfer June '07 salary to fund 123456" or "See related CT Form").
Batch Name example: CT^FCOR^CCB^ JHM^See related CT form^FEB-APR 2007
Cost Transfers requiring only a journal with explanations in the Batch Name and Transaction Line Description fields
(Cost Transfer Explanation and Justification Form (CT Form) and OSP prior approval are not needed):
* Please note that this change will be effective retroactively, unless transferring charges would result in a revision of a previously filed final financial report.
Cost transfers requiring only a journal with explanations in the Batch Name and Transaction Line Description fields if made within 90 calendar days.
Please note that 90 days means 90 calendar days, not three months. Use the OSP cost transfer calculator to determine the deadline for your cost transfer.
Cost Transfers Requiring a Journal and Cost Transfer Form with Questions 1 and 2 Answered (Within 90 Calendar Days)
If the cost transfer is posted to the General Ledger within 90 calendar days of the 15th of the month following that in which the original charge was recorded, questions 1 and 2 on the CT Form must be answered. (Use theOSP cost transfer calculator to determine the deadline for your cost transfer).
Transaction Line Description field on journal should explain the cost transfer or, if the explanation would be too long, say "See related CT Form
."
A draft or out-of-balance journal, Detail Listing of original charge, CT Form, and other supporting documentation are sent to OSP for review and approval. Once approved, the CT form is returned to originator for posting to General Ledger (OSP will enter journal if necessary to meet closing deadlines) and for retention with other accounting records.
Cost Transfers Requiring a Journal and Cost Transfer Form with Questions 1 through 4 Answered (More Than 90 Calendar Days)
If more than 90 calendar days have passed since the 15th of the month following that in which the charge to be transferred to a federal account was originally recorded in the General Ledger, an explanation for the lateness of the cost transfer and your plans to avoid this situation in the future (questions 3 and 4 on the CT Form ) are required (in addition to questions 1 and 2). Cost Transfers after the 90-day period need the approval of a senior school financial officer (determined by each school) and OSP's Director of Financial Services.
Any supporting documentation justifying the lateness of the cost transfer (e.g. copy of Action Memo, correspondence between departments and central offices, etc.) should be attached to the Form.
Use the cost transfer calculator to determine the date your cost transfer reaches 90 days.
If a cost transfer is required to correct a previously processed cost transfer journal, the date the transaction originally posted to the GL should be used for counting purposes (not the date of the previous cost transfer).
Approval for cost transfers submitted later than 90 calendar days (as defined above) will only be granted in extenuating circumstances; as described below. They DO NOT include:
It is the responsibility of the grantee and the PI to ensure the availability of qualified staff to administer and exercise stewardship over federally-funded projects in accordance with federal policies and regulations, including those relating to regular monitoring of expenditures and timely correction of errors and reallocation of expenses.
Transfers that would result in the revision of a final Financial Status Report (FSR) or Final Invoice will generally not be approved.
Examples of Acceptable Extenuating Circumstances for Cost Transfers over 90 calendar days (note that all of these exceptions still require submission of the CT Form and supporting documentation):
Notes:
Forms
CT Form
Contacts
Judy McSweeney, Director of Financial Services, Office for Sponsored Programs (OSP) (617) 496-2513 or
Related Documents & User Guides
Related Policies
Internal Billing Transactions Policy
Appendix
N/A
FAQs
(1) Q. What is a fiscal period or accounting period?
A. The fiscal year or financial operating year of Harvard University begins July 1st and ends June 30th of the next calendar year. The Harvard University Fiscal year comprises 12 separate and distinct accounting periods.
An accounting period (or fiscal month) runs from the first calendar day of a month through the fifth working day of the following month at 9 am. One may transact to the prior month during these five days. Please ensure that the transaction date on the journal is for the prior month in order for the journal to be included in that month. Also, as the fiscal month closes at 9 am on the fifth day, you are urged to transact prior to day five of the following month to ensure that your journal will be processed with the correct date.
(2) Q. What is an invalid code combination?
A. An Invalid Sponsored Code Combination is a charge in the General Ledger for which the fund-activity-subactivity combination does not exist in GMAS.
Transactions posted to invalid code combination(s) do not appear on the PER nor in GMAS and are not included on invoices or financial reports to our sponsors. See website for more information:
Quick Tip Monthly Reporting for Grants Management.
(3) Q. What if I'm moving multiple transactions on the same journal form and the total exceeds $500?
A. The $500 threshold may be applied separately to individual transactions in the General Ledger, but, except for Pcard payments for multiple items, transactions may not be subdivided into smaller chunks to create multiple transfers, each for less than $500.
Example 1: While reconciling your accounts, you identify three transactions on the same date in the previous month that should be moved to a federal account, all payments to the same vendor in the same object code, for $450, $300, and $600.
(3A) Q. Can you move the $450 and $300 transactions without a Cost Transfer Form?
A.Yes.
(3B) Q. Can you move $499 of the $600 transaction without a Cost Transfer Form?
A. No.
Example 2: One of the items you purchased using your Pcard last month needs to be moved to a federal award and it only cost $100, but the transaction in the General Ledger is for the total amount ($600) paid to the Pcard Company, which included several other items.
(3B) Q. Can you move $100 of the $600 transaction without a Cost Transfer Form?
A. Yes
(4) Q. Do you need to complete a Cost Transfer Form for expenses being moved back to their original location on a federal award?
A. Yes. The cost transfer clock starts based on the date of original posting to the Harvard General Ledger. Costs removed from a federal award under a previous transaction should be carefully considered before they are moved back to the federal award. In most cases, by removing these charges in the first place, the transactor identified that these charges did not belong to the original award. An important question to consider is: What has changed to now render these charges allowable and allocable?
(5) Q. What naming conventions should I use when moving costs?
A. The Batch Name for the journal should be of the form "CT^TUB^DEPT^ Preparer's Initials^Description^Date (or Date Range) of original transaction(s)."The Transaction Line Description should describe the journal or, if the explanation would be too long AND a Cost Transfer Form was submitted, reference that Form (e.g. "Transfer June '07 salary to fund 123456" or "See related CT Form"). If a Cost Transfer Form is not required, the description field should indicate the allowable reason for the exception. The naming conventions should be used on all manual transfers to federal awards, regardless of whether a Cost Transfer Form is needed or not.
(6) Q. When do I need to complete a Cost Transfer Form?
A. All manual journal transfers to federal awards over $500 require a Cost Transfer Form, unless one of the exceptions listed in the Cost Transfer Policy applies. More information can be found in the Cost Transfer Policy Job Aid.
(7) Q. Do I need to complete a Cost Transfer Form if there is an extenuating circumstance (late issuance of an Action Memorandum or failure of another department to take action)?
A. Yes. In addition to completing the Form, you would also include supporting documentation to describe the extenuatin circumstances, including a copy of the Action Memo if that is the reason for the exception.
(8) Q. What are routine reallocations of costs?
A. Routine reallocations of costs can be characterized as the distribution of shared services or service center charges to sponsored and/or non-sponsored awards based on an allocation methodology. Examples include: telephone, photocopying, service center, animal per diems, glasswashing, materials and supplies, technical support, and data storage. Routine reallocation of these costs to federal awards must be done within 90 days of the original charge. Distribution must occur at regular intervals (e.g. monthly).
(9) Q. Does the Cost Transfer Policy apply to settling Short-Term (STOA) and Long-Term Operating Accounts (LTOA)?
A. No. STOA's and LTOA's, or Short/Long-Term Operating Advances, do not require the Cost Transfer Form, as they are deemed an original charge to the award. The non-sponsored account that is credited when processing an STOA/LTOA journal is the account that was originally charged to release funds for the account, and the reconciling debit is considered the original charge because this is the first time an expense is being recorded on Harvard's General Ledger.
A Short-Term Operating Advance (STOA) account is generally set up to accommodate short-term (six months or less) projects carried out by Harvard personnel where a petty cash fund is not appropriate.
A Long-Term Operating Advance (LTOA) account is generally set up to accommodate long-term (six months or more) foreign projects carried out by Harvard personnel.
See website for policy information on settling these accounts:
http://vpf-web.harvard.edu/ofs/travel/pdf/policy.pdf
(10) Q. When is an Action Memo issued?
A. An Action Memo is the official University communication regarding a sponsored award notice accepted by the University. The award terms and conditions, dates and dollars, and accounts activated for the award are included. The Action Memo is also used to communicate authorized internal requests and administrative changes.
(11) Q. What are budget periods and overlapping budget periods?
A. A budget period is the interval into which a grant project period is divided for funding and reporting purposes, usually 12 months.
Overlapping budget periods are not identical, and one period may be totally contained within the other, or they may just overlap and not be consecutive. Under this exception in the Cost Transfer Policy, only those original transactions within the overlap period qualify for the exception and may be transferred without a Cost Transfer Form.
(11A) Q. How are these overlapping periods handled for federal training grants? For example: a trainee is on a grant for three years, starting halfway through the first year of the training grant. The grant has a budget period from January 1st through December 31st, and the trainee’s training appointment period is from July 1st through June 30th. The grant has been set up with a year-logic account structure for each budget year.
Trainee’s Appointment Period: July – June
Account budget periods:
0101 for year 1 (January – December)
0201 for year 2 (January – December)
0301 for year 3 (January – December)
We know from NIH guidelines that since the trainee was appointed part-way through the first year of the training grant, the second half of her first-year’s stipend and tuition/fees must be paid from year-1 funds, even though the nominal budget period for year 1 has passed. If the department miscoded the second half of the first-year stipend to account 0201 and needs to move those stipends and tuition/fees from 0201 to 0101, is this situation considered “overlapping budget periods?” Is a Cost Transfer Form required?
A. Yes, a Cost Transfer Form is required. Although the trainee’s appointment period overlaps both grant budget periods, the budget periods do not overlap in this case, so the exception is not triggered.
(12) Q. How do I answer the questions on the Cost Transfer Form?
(12A) Q. Why was this expense originally charged to the account from which it is now being transferred?
A. Indicate why this expense was charged to this particular account.
(12B) Q. Why should this charge be transferred to the proposed receiving federal account?
A. Explain why it is appropriate to move the charge to this account. Was there a change in effort? Explain why it is more accurate to post the charge where you propose.
(12C) Q. Why is this cost transfer being requested more than 90 calendar days after the 15th of the month following the accounting period of the original transaction?
A. Explain why you could not correct this transaction until now
(12D) Q. How was the error discovered? What is being done to prevent this from recurring?
A. Explain how you discovered the error and how you will avoid these problems in the future. Explain your plan and the steps you have taken to implement it.
(13) Q. What happens if my cost transfer request is not approved?
A. By requesting a cost transfer approval, you have indicated that the charges in question do not belong where they are currently posted. Thus they must be removed and posted to an unrestricted account.
(14) Q. Can I move preaward costs from one competing project to the next competing segment without a Cost Transfer Form?
A. No. A Cost Transfer Form is required.
(15) Q. I have a student who has been reassigned to a new project effective next month. I have processed the salary forms to have her salary automatically charged to the new award, but her tuition remission for the year was charged back in August. I know that tuition remission must follow salary.
(15A) Q. Do I need to complete a Cost Transfer Form for the salary charges?
A. No, since the future salary has not been charged on Harvard’s General Ledger, a cost transfer is not required.
(15B) Q. Do I need to complete and obtain approval for an over-90-day Cost Transfer Form for the tuition remission that is following the salary? I do not have an Action Memo submitted within the last 45 days and I am worried that this will not be approved.
A. Yes, since the tuition remission was charged over 90 days prior to this, you should complete an over-90-day Cost Transfer Form and have it approved. This is an acceptable unusual circumstance as cited in the Policy.
(16) Q. Professor X just told me that one of our students has been reassigned, effective two months ago, from one federal project to another. I have prepared an under-90-day cost transfer to move his salary, and requested that the payroll costing be changed to reflect the new assignment. How do I move the tuition remission that was posted in July? It is November and the 90 days have passed.
A. You could prepare an additional Cost Transfer Form (over 90 days) and submit it for approval for the tuition remission. Alternatively, you could have put both charges on one over-90-day Cost Transfer Form, pointing out that the salary charges were under 90 days and that the tuition remission was over 90 days, but needed to be moved to align with the salary.
Contacts
For all Central equipment reporting and policy guidance, contact:
Judith A. RyanFor all equipment-related matters at the individual schools:
Faculty of Arts & Sciences:
Alan K. Long
Assistant Dean for Research Finances and Systems
50 Church Street Room 538
Cambridge, MA 02138
617-496-2491
The schools may execute these and other tasks centrally or distribute some or all of them among departments as appropriate.
The central Office for Sponsored Programs, noted above, shall provide policy and procedural guidance to the schools pertaining to all equipment management matters. OSP shall also respond to requests for reports and information from sponsors, auditors and other parties.
2. Notification procedures. When the Office for Sponsored Programs is notified via sponsor correspondence of an award receiving government-furnished equipment, an Action Memo will be generated and distributed to the PI, pre- and post-award administrators, department administrator, and the Department Equipment Officer. In GMAS, Harvard's sponsored research system of record, the "Special Equipment Terms" radio button will be selected and the Action Memo will include, in the Revision Comment section, a statement on the government-furnished equipment. This will alert schools and departments to tag the equipment and enter the requisite information into their inventory control system.
3. Reports. OSP shall submit all required GFP reports, including specific forms for GFP disposal, to the federal government on behalf of the schools. The primary government agency to receive Harvard's required GFP reports and its address for correspondence is:
Department of the Navy
Office of Naval Research (ONR)
Boston Regional Office
495 Summer Street, Room 627
Boston, MA 02210-2109
617-495-8341
Attn. Ms. Linda Rowe, Property Administrator
Specific GFP reports to be submitted by OSP to the federal government include but are not restricted to:
| Procurement Instrument | Format | Distribution | Notes |
| DOD Contract | DOD Property In The Custody Of Contractors DD Form 1662 Negative Reports Not Required (unless a positive balance was reported last year) |
Original and 1 Copy To: Cognizant ONR Regional Office | Due 10/31 of each year for preceding year ending 9/30. |
| DOD Contract | Grant Inventory List as required by
DoDGARS 32.33(a)(1)No Prescribed Form Negative Reports Not Required |
Original and 1 Copy To: Cognizant ONR Regional Office | Data Required for submittal can be found in OMB Circular A-110, Subpart C, Section .34(f) Due 10/31 of each year for preceding year ending 9/30. |
| NASA Contract | NASA Property In The Custody Of Contractors NASA Form 1018 and NASA FORM 1018 Supplemental Data -Depreciationand (FSC Table) Negative Reports Are Required |
Original To: NASA Center DCFO 3 Copies To:Cognizant ONR Regional Office |
For electronic submission of NASA Form 1018, Links to NESS Version 3.0 General Information, Login Information and Access Request Forms NOTE: If submitting via NESS, hard copy distribution is not required. Due 10/15 of each year for preceding year ending 9/30. |
| NASA Contract | Grant Inventory List Negative Reports Not Required |
Original To: NASA Center DCFO Copy To:NASA Center IPO and Cognizant ONR Regional Office |
Instructions From NASA Handbook (NPG 5800.1D, Section 1260.75(b)(2) Grant Inventory List Format From NPG 5800.1D Section 1260.134(f)(1) Due 10/15 of each year for preceding year ending 9/30. |
If there are any questions on the requirements for annual government furnished property reporting, contact the ONR Property Systems Manager at (617) 753 - 4598.
Equipment Costs and Capitalization Threshold
Under Harvard financial policy, an item is considered capital equipment when it has a unit cost of $5,000 or more, Harvard's capitalization threshold value for non-GFP , and has a useful life of at least one year. The capitalized unit costs consist of the allowable costs noted below. Because the government owns our GFP, it will not be capitalized or depreciated as a Harvard-owned asset in our balance sheet accounts.
| OBJECT CODES | DESCRIPTION |
| 6800 | Equipment, Furn+Fixtures >=$5000 (Non-Consolidating Tubs Only) |
| 6801 | Noncomputer Equip, Non-Sponsored^Equip >=$5000 |
| 6802 | Noncomputer Equip, Sponsored^Equip >=$5000 |
| 6803 | Computer, Non-Sponsored^Equip >=$5000 |
| 6804 | Computer, Sponsored^Equip >=$5000 |
| 6805 | Residential Furn+Fixtures, Non-Sponsored^Equip >=$5000 |
| 6806 | Residential Furn+Fixtures, Sponsored^Equip >=$5000 |
| 6807 | Office Furn+Fixtures, Non-Sponsored^Equip >=$5000 |
| 6808 | Office Furn+Fixtures, Sponsored^Equip >=$5000 |
| 6809 | Vehicle, Non-Sponsored^Equip >=$5000 |
| 6810 | Vehicle, Sponsored^Equip >=$5000 |
| 6811 | Non-Sponsored Work in Progress^Equip >=$5000 |
| 6812 | Sponsored Work in Progress^Equip >=$5000 |
| 6813 | Scientific Equipment, Non-Sponsored^Equip >=$5000 |
| 6814 | Scientific Equipment, Sponsored^Equip >=$5000 |
| 6815 | Software, Non-Sponsored^Equip >=$5000 |
| 6816 | Software, Sponsored ^Equip >=$5000 |
Depreciation Guidelines
When non-GFP capital equipment is acquired and placed in service, its value is depreciated annually, in whole -year increments, using the straight-line method over its useful life. A typical capital equipment depreciation expense scenario could follow this example:
- Mission Of and Benefit To Funder
- RG/NG Gift/Grant: Funds are in support of items that are directly related to the recipient's mission, while only indirectly related to the funder's business.
- NE/Award: Funds are in support of items that are directly related to the funder's business activities, and may or may not be directly related to the recipient's mission.
- Value Exchange
- RG/NG Gift/Grant: Funder receives little or no value in exchange for the funding provided.
- NE/Award: Items provided are of particular value to the funder, and the funder is entitled to receive value (i.e., funder may request IP, publication rights, data, etc.)
- Scope of Work
- RG/NG Gift/Grant: Funder expresses the goal of an activity rather than the "how tos".
- NE/Award: Funder determines the "how tos", such as a protocol for testing or specific method of program delivery.
- Penalty for Non Performance
- RG/NG Gift/Grant: The only penalty for failing to deliver items on a timely basis are returning unspent funds; there is no penalty for failing to use all the funds.
- NE/Award: Penalties (e.g., punitive damages) may exist for failing to deliver items on a timely basis. Funder may include audit and compliance terms.
- Publication and Data Review
- RG/NG Gift/Grant: Funder places little or no restriction on review of items before they are made available.
- NE/Award: Funder may place restrictions on how the items are reviewed before being made available to a wider audience.
- Cost Determination
- RG/NG Gift/Grant: Proceeds are a subsidy to the cost of providing an item (i.e., the activity is something Harvard would be doing anyway, whether or not the funding in question is provided).
- NE/Award: Proceeds are the cost of providing the item plus overhead/indirect cost.
Non-Federal Awards (NE) vs. Non-Federal Sponsored Grants (NG) vs. Restricted Gifts (RG)
Once the determination has been made that the terms prompt University oversight beyond the Office of the Recording Secretary (RSO), OSP will then determine whether the award should be processed as a Non-Federal Sponsored Grant (NG) or a Non-Federal Award (NE). This determination is necessary to ensure that awards, which may qualify as "gifts" eligible for the charitable deduction for Federal income tax purposes, are also processed by the RSO. A further breakdown of the difference between NE, NG and RG funds can be found below.
- Non-Federal Awards (NE). This category includes all funding arrangements in which the University is providing a return benefit to the grantor in exchange for the payment, regardless of whether the funding instrument is designated a contract, cooperative agreement, grant, consortium agreement, or otherwise. This category also includes all funding by foreign entities or international organizations managed by the Office for Sponsored Programs (OSP), whether pursuant to a contract or sponsored "grant." This category includes all subcontracts and subgrants from non-federal sources. Non-federal Awards are processed only by OSP.
- Non-Federal Sponsored Grants (NG). This category includes all other funding arrangements not deemed to be contracts, and not derived from foreign or international entities. Generally, awards from Section 501(c)(3) nonprofit organizations will be included within this category as they routinely represent grants and not contractual payments. This category also includes all grants from industry, which require gift certification. Non-federal Sponsored Grants are processed by both OSP and RSO.
- Restricted Gifts (RG). This category includes funding arrangements where the award is not predicated on detailed terms and conditions, nor are there any terms which specify how the funding must be spent or administered (i.e., funding received may be utilized at the full discretion of the recipient.) If any financial reporting is included, it is limited and for stewardship purposes only. Unexpended funds are not returned to the donor at the expiration of the gift period. Restricted Gifts are processed only by RSO.
Background
Deficit sponsored fund balances result in significant costs to Harvard University 's "Central Bank." In FY02 and FY03 deficit sponsored fund balances resulted in approximately $2.42M in costs to the Central Bank. While the Central Bank does earn interest on non-federal fund credit balances, net earnings to the bank on such balances during the same time period were $.46M, leaving a net cost to the bank of approximately $1.96M.
There are three primary factors contributing to deficit sponsored fund balances, each of which results in costs to the Central Bank:
In order to mitigate such costs to the Central Bank, and to ensure strong financial accountability at the local level, interest on deficit sponsored fund balances will be assessed as described below.
Overview
Policies and Procedures: General
Policies and Procedures: Specific Deficit Balance Types
- Enactment of Policy
The "Interest Policy Group" (IPG), a subgroup of SPOC, met in fall of 2003 and winter/spring of 2004 to discuss and refine the policy for charging interest to sponsored awards with deficit fund. Beginning 3/1/04, interest will be charged on deficit fund balances on "Dead Accounts." Interest policies regarding Overspent Active Accounts will be implemented 6/1/04, and the Advance Account component of the policy will be effective 9/1/04.- Amendments to Interest Policies and Procedures
Periodically the processes and methods affecting interest charges on deficit sponsored fund balances will be evaluated by the Vice President for Finance, tub financial officers and OSP staff. Any proposed changes to policies or processes affecting sponsored funds will be presented to SPOC members for advice and comment prior to their implementation. The interest rates used will be based on the rates used by General Accounting, which are reassessed annually.- Interest Rate
Interest charges will be assessed monthly at the annual simple interest rate set annually by the University. The current annual rate for deficits is 1.2%, which will be charged at .0010% per month against all eligible funds as outlined above.- Eligible funds and ranges
FG funds (Federal Grants and contracts) in the 100000-199999 range NE funds (Non-Federal Exchange Accounts) in the 200000-249999 range NG funds (Non-Federal Sponsored Gifts) in the 250000-299999 range- Exclusions
Financial Aid awards will be excluded from this policy, owing to the manner in which they are reimbursed from sponsors.- Data Source
All relevant data are taken from OSP's current system of record.- Calculation of Deficit Fund Balances
A deficit fund balance exists when current to-date expenditures exceed available funds. Available funds are defined as the greater of: (a) the account group budgeted amounts plus carry-forward (i.e., total obligated plus carry-forward), and (b) income to-date plus adjustments to-date. Overexpenditures are calculated at the account group level.- Account to be Debited
Each tub will identify one unrestricted account to which interest charges will be debited and will provide the main account's 33-digit string to OSP. Interest charges are levied against the tub/org holding the main account; if the deficit fund balance is the result of overexpenditure on a part-of account, it is appropriate for the tub/org incurring the charge to transfer this charge to the tub/org holding the overspent part-of account using object code 7632.- Recipient of Interest Income
Interest charges made against tub accounts will be credited to the Central Bank.- Processing Interest Charges
Monthly, OSP will generate a report listing all deficit sponsored fund balances currently eligible for interest charges, which will be distributed electronically to the tubs for review at the beginning of every month. Journals to clear overexpenditures must post no later than the last day of each month to avoid an interest charge. For each fund eligible for an interest charge on the last business day of the month, OSP will enter the tub-identified account string and debit amount into an ADI (automated data interface) template file. After month-end close, OSP will then send the ADI file to the FAD-OFS accounting office, where Joe DeCristoforo or his staff will upload the file, which posts the transaction to the General Ledger.- Viewing or Reporting Interest Charges
Interest charges may be viewed or reported by using either a Detail Listing report or a Summary Actuals report. Select your tub(s), the appropriate fund, and object code 7630 for the period of choice. You may run the Interest Policy report for your area in CREW.- Appeals and Expense Entry Corrections
For occasions when you wish to appeal an interest expense, or you feel that an interest expense has been incorrectly entered, please contact the OSP Financial Services representative assigned to your school or tub. Should the charge need to be reversed, the OSP staff will submit a correcting journal, using object code 4473, to OFS.
- Dead Accounts - Funds Eligible to be Assessed Interest
Sponsored funds with obligated and anticipated end dates of two months old or greater, as of the first business day of the current month, with deficit balances of $1,000 or more (see #7, "Calculation of Deficit Fund Balances" above), will be eligible to generate an interest charge that will be assessed after month-end close unless the fund balance is brought below the -$1,000 thresh hold in the interim (in which case no interest charge will be levied). As a result, interest charges will only be made against deficit fund balances of $1,000 or more with obligated and anticipated end dates three months old or greater.- Active Overspent Accounts - Funds Eligible to be Assessed Interest
To allow for pre-award spending, only those active overspent accounts with anticipated and obligated end dates greater than three months into the future will be eligible for interest charges. Of these, active accounts with deficit balances of $10,000 or more of available funds (see #7, "Calculation of Deficit Fund Balances" above), as of the last business day of the current month, will generate an interest charge. As with Dead Accounts, Active Overspent Accounts will be distributed the first day of each month to help tubs identify and address problematic accounts.- At risk Accounts
All advance accounts that are 120 days old or greater as of the last business day of the month, and that have $75,000 or more in expenditures, will be brought to the next bi-monthly Financial Oversight Committee for review, discussion and remediation. Any advance account that continues to show on the list at the following bi-monthly Financial Oversight Committee meeting will incur an interest charge. Transfers of PIs (and their awards) from other institutions may be considered as exclusions to the policy on a case by case basis. On the first business day of each month a listing of all active Advance Accounts will be distributed to help tubs identify and address potential problems related to Advance Accounts older than 120 days.- Aging A/R
To be developed.
Presented to SPOC: September 26, 2002
Last updated: 9/11/2009
For policy guidance, contact
or 617-496-2513
Non-federal Sponsored Funds Interest Income Policies and Procedures
Enactment of interest income policies
The Internal Interest Policies group (comprised of Harvard's central FAD and tub staff) met in 2002 to develop equitable policies for paying interest income on many fund types including NE/NG. Beginning July 1, 2002, interest income will be paid automatically on NE/NG fund credit balances, eliminating the need for the tubs to submit requests to receive interest on individual funds.
Amendments to interest income policies and procedures
Periodically, the process and methods affecting interest paid on non-federal fund credit balances will be evaluated by the Vice President for Finance, tub financial officers and OSP staff. Any proposed changes to policies or processes affecting sponsored funds will be presented to SPOC members for advice and comment prior to their implementation. The interest rates used will be reassessed annually by OFS and the Internal Interest Policies group.
Non-federal funds eligible to earn interest income
NE/NG funds having a credit balance in the prior month will generate interest income that will be paid in the current month.
Federal grants interest income
It is against Federal regulations for grant recipients to retain any interest on Federal funds. The vast majority of our Federal funding is received through a letter of credit reimbursement system, leaving no credit balance in the fund. There are, however, some Federal agencies that pay in advance. These funds are deposited into interest bearing accounts and the interest earned is remitted to our cognizant agency, the Department of Health and Human Services, on an annual basis.
Application funds and ranges
Calculation of credit balances
A credit balance is determined by the sum of a funds' asset, income and expense accounts, excluding interest income, in the prior closed month as posted in the general ledger. Balances in object codes: 0120, 4000-4529, 4531-9509 are summed to derive funds' credit balances. Interest income (object code 4530) is excluded because interest paid is simple interest, not compounded interest.
Interest payments on NE/NG fund credit balances
The NE/NG funds will have their interest income calculated and paid by an automatic process executed monthly by GMAS and OFS, respectively. OSP will not affect the processing of Non Federal funds' interest.
Inactive projects whose funds carry a credit balance
If a NE/NG fund has a credit balance in the prior month and the main account of the maximum account group is not disabled, yet its project has ended, interest will continue to be paid until it is disabled.
If a fund had a credit balance in the prior month and has a zero balance in the current month, no interest will be paid. GMAS compares prior/current balances and will assume that the project is no longer functional if it has a zero balance in the current month.
Timing on monthly entries
Interest to be paid is calculated on a funds' prior closed month's credit balance, net of YTD interest income. The interest income credit transaction is booked in the current month after the prior month has closed. For example, January's balances will earn interest to be booked in February, February's balances will earn interest in March, etc.
Interest rate
Annual simple interest of 1.2% is paid monthly on the prior month's credit balance, excluding year-to-date interest income. Each month, 1/12 of 1.2% of a NE/NG fund's prior month's credit balance (0.0010%), net of year-to-date interest income, will be paid back to the fund's non-disabled main account.
Use of interest income
The use of a fund's interest income must follow its terms and conditions as agreed to by the grantee and the sponsor, and any other accounting polices or rules established by Harvard University. If there are no sponsor restrictions over the use of interest income received from University sources, tubs may use it at their discretion for project-related or other purposes. Before interest income may be used for other purposes, it must be transferred to a non-sponsored fund. Transferring residual income will also facilitate the account's closing, to zero-out a remaining balance.
Tub financial officers may independently use income transfer object code 4531 to transfer interest income to another fund when appropriate. Neither OSP nor OFS will make transfer transactions after the income is credited to a fund; income transfers are tub responsibilities.
Interest income remaining after project expiration
If the sponsor has no restrictions on the use of interest income paid from University sources, and all project expenses have been incurred, the remaining interest income should be transferred to a non-sponsored fund for any use and to zero-out the fund's balance to facilitate account closing.
Viewing or reporting of interest income
Interest income for NE/NG funds may be viewed or reported by using either a Detail Listing report or a Summary Actuals report in CREW. Select your tub(s), funds in the 200001-299999 range, and object code 4530 for the period of choice. The PER now displays each interest income object code separately.
Source of interest income paid to NE/NG funds
Interest paid to NE/NG funds comes from Harvard University's "central bank" of funds whose assets are managed to generate income. That income will be credited to the NE/NG funds that earn it.
Administrative offices making the transactions
The FAD OFS General Accounting office (Joe DeCristoforo) makes the monthly income transactions for funds in the NG range, using object code 4530, "Interest Income." The OFS accounting office has to make these transactions because object code 4530 is restricted for their use only. GMAS automatically performs the income transactions for funds in the NE range.
Requesting corrections to an improper income entry
There may be occasions when interest income will be inadvertently credited to a fund that has been recently disabled or should not be earning income for other reasons, e.g. fund mistakenly in the NE/NG range. In these events, tub/fund administrators should contact OSP's Director of Financial Services, 617-496-2513, or the team manager assigned to your school or tub. The OSP staff will submit a correcting journal, using object code 4530, to OFS to reverse the errant income credit.
FAQ's: Non-Federal Interest on Credit Balances
FAQ: Non-Federal Exchange (NE) and Non-Federal Grant (NG) Funds to Earn Interest on Credit Balances
(1) Q: Why are my NE and NG funds now earning interest?
A: The Internal Interest Policies group (comprising central FAD and tub staff) met this year to develop equitable policies for paying interest income on many fund types including NE/NG. Beginning July 1, 2002, interest income will be paid automatically on NE/NG fund credit balances, eliminating the need for tubs to submit requests to receive interest on individual funds.
(2) Q: How may I use the interest income?
A: The use of interest income must first follow the sponsor's terms and conditions. If there are no terms affecting the use of interest income received from University sources, tubs may use it at their discretion for project-related or other purposes. Before interest income may be used for other purposes, it must be transferred to a non-sponsored fund. Transferring residual income will also facilitate the account's closing. Tub financial officers may independently use income transfer object code 4531 within their own tub to transfer interest income to another fund when appropriate.
(3) Q: Do FG (federal grants and contracts) funds earn interest?
A: It is against Federal regulations for grant recipients to retain any interest on Federal funds. The vast majority of our Federal funding is received through a letter of credit reimbursement system, leaving no credit balance in the fund. There are, however, some Federal agencies that pay in advance. These funds are deposited into interest bearing accounts and the interest earned is remitted to our cognizant agency, the Department of Health and Human Services, on an annual basis.
(4) Q: How do I identify the different funds?
A:
(5) Q: Which of my NE/NG funds will generate interest income?
A: NE/NG funds having a credit balance in the prior month will generate interest income that will be paid in the current month.
(6) Q: How is a credit balance determined?
A: A credit balance is determined by the sum of a fund's asset, income and expense amounts, excluding interest income, in the prior closed month as posted in the general ledger.
(7) Q: Which object codes are used to determine credit balances?
A: Balances in object codes: 0120, 4000-4529,4531-9509 are summed to derive fund balances. Interest income (object 4530) is excluded because interest paid is simple interest, not compound interest. That is, we won't pay interest on interest.
(8) Q: How much interest do I earn?
A: Annual simple interest of 1.2% is paid monthly on the prior month's credit balance, excluding year-to-date interest income. Each month, 1/12 of 1.2% or 0.0010% of a NE/NG fund's prior month's credit balance, net of year-to-date interest income, will be paid back to the fund's non-disabled main account.
(9) Q: How is the interest paid on NE/NG fund credit balances?
A: The NE/NG funds will have their interest income calculated and paid by an automatic process executed monthly by GMAS and OFS, respectively. OSP will not affect the processing of Non Federal funds' interest.
(10) Q: When does this entry occur for each month?
A: Because interest is calculated on a prior month's credit balance, net of YTD interest income, the transaction is booked after the prior month has closed. For example, June's balances will earn interest to be booked in July; July's balances will earn interest in August, etc.
(11) Q: How may I view or report the interest income booked to my accounts?
A: Use a Detail Listing report or Summary Actuals report in CREW. Select your tub(s), funds in the 200001-299999 range, and object code 4530 for the period of choice. The PER differentiates interest income from other types of income
(11) Q: How may I request a correction to an improper income entry?
A: Contact your OSP financial analyst (Director of Financial Services 496-2513), or the team manager assigned to your school or tub. If approved, OSP will submit a correcting journal entry to OFS using object code 4530.
(12) Q: What about inactive projects whose funds carry a credit balance?
A: If a NE/NG fund has a credit balance in the prior month and is not disabled, yet its project has ended, interest will continue to be paid until it is disabled.
(13) Q: What about a project that had a credit balance last month but is zeroed out this month, e.g. the credit balance was returned to the sponsor?
A: If a fund had a credit balance in the prior month and has a balance of zero this month, no interest will be paid. OSP compares prior/current balances and will assume that the project is no longer functional if it has a zero balance in the current month.
(14) Q: What about interest income remaining after a project has expired?
A: If the sponsor has no restrictions on the use of interest income paid from University sources, and all project expenses have been incurred, the remaining interest income should be transferred to a non-sponsored fund for any use and to zero-out the fund's balance to facilitate account closing.
(15) Q: Who is paying me the interest income and where does it come from?
A: Interest is paid from the University's "central bank" of funds whose assets are managed to generate income. That income will now be credited to the NE/NG funds that earn it.
(16) Q: How may these policies and procedures be amended?
A: Periodically, the process and methods affecting interest paid on non-federal fund credit balances will be evaluated by the Vice President for Finance, tub financial officers and OSP staff. Any proposed changes to policies or processes affecting sponsored funds will be presented to SPOC members for advice and comment prior to their implementation. The interest rates used will be reassessed annually by OFS and the Internal Interest.
There are two main requirements of the NIH Public Access Policy:
Effective April 7, 2008 Principal Investigators must ensure that electronic versions of any peer-reviewed manuscripts arising from NIH funding and accepted for publication after that date are deposited in PubMed Central (PMC), NIH's digital archive of biomedical and life sciences journal literature, and that the articles may be made publicly available by PMC no later than 12 months after publication.
Effective May 25, 2008, anyone submitting an application, proposal, or progress report to NIH must include the PubMed Central reference number (PMCID) when citing articles that arise from their NIH funded research.
To read additional details about this policy see the Countway Library website.
Process
Until the Assoc. Provost for Research position is filled, please send any potentially risky proposals to
only.
- The dollar amount of the request (over $5M)
- The Sponsor
- Any new sponsors
- Any sponsors that are likely to be controversial (e.g., gambling associations, tobacco companies)
- Some foreign governments (see #4)
- The degree to which the project deviates from the school's existing mission, for example:
- Gambling
- Patient Care
- Technical Assistance
- The amount of international participation in the project
- Subs in international locations without infrastructure
- International projects in locations that pose a threat to the individual(s) (see #10)
- The relationship of the project to current world events, for instance:
- AIDS
- Iraq
- Tsunamis
- Travel to countries on the State Department's Travel Warning List
- Mechanics within the program announcement that may deviate from standard protocols
- PEPFAR Expedited Review: $106M awarded in 7 days
- Anything about the project that would automatically trigger national or local news coverage
- Stem Cells
- Any exceptions to current University research policy (this varies by school)
- Issues/problems with a previous segment of the award, for example:
- PI has historically not signed CoI
- We wouldn't apply for renewal on an award funded by a gambling association.
- The extent to which the project may create genuine health/safety risks to Harvard personnel.
- Sending students to Nigeria, Sudan, etc.
- Click here for US Department of State Current Travel Warnings
- A project with a large number of subcontracts where the vast majority of the work is not being done by HU.
- 50% or more of salaries are elsewhere
*Please note: examples provided for each category are not an exhaustive list, but are rather included to illustrate the issue.
The Harvard University Office of the Provost amends, effective March 17, 2009, the HARVARD UNIVERSITY HUMAN EMBRYONIC STEM CELL RESEARCH COST-ALLOCATION PROTOCOLS (http://www.provost.harvard.edu/policies_guidelines/stem_cell_protocols.pdf).
Harvard University laboratories doing human embryonic stem cell (hESC) research which is ineligible for federal funding are required to employ these cost allocation protocols to ensure that federal funds are not used to perform ineligible research activities or to fund research on lines not listed on the NIH registry of approved lines. For example, the use of federal funds for the creation of human embryos for research purposes or for research in which human embryos are destroyed is unallowable. Other research ineligible for federal funding is described in sections IV and V of the July 7th, 2009 National Institutes of Health Guidelines (http://stemcells.nih.gov/policy/2009guidelines.htm). Accordingly, in any Harvard laboratory where hESC research activities which are ineligible for federal funding take place, researchers and administrators must ensure that federal funds do not support ineligible research.
If you have any questions, please contact the person who oversees your area of inquiry:
ESCRO protocols/review:
Laura Kandziolka, ESCRO Administrator: 617-496-6560,
General/other questions:
Laura Kandziolka, ESCRO Administrator: 617-496-6560,
Last update March 17, 2009
Background:
To provide greater clarity, Harvard has developed the following guidance related to the charging of stipends to sponsored awards. Stipends are payments made to individuals for subsistence support or to defray expenses during a period of academic appointment. Stipend payments are not compensation for services rendered and, therefore, are not allowable on federal awards unless the purpose of the agreement is to provide training to selected participants and the charge is approved by the sponsoring agency (OMB Circular A-21, Section J45). At Harvard, the following object codes report expenses that are payments to individuals whose academic appointments with the University define them as stipendees:
There are, however, some instances where stipend expenses are allowable. Sponsored funds intended to support training or research training will state that intention clearly in the agency program announcement. The scope of work in the proposal and award agreements should also state explicitly that training or research training of specific individuals is a purpose of the award. In such cases, stipend expenses are expected and allowable. Typical training awards include NIH "T" and "F" awards, NASA's various fellowship programs, and NSF Doctoral Dissertation grants. Other awards where the training intention in Harvard's proposal and award agreement is described clearly and accepted by the federal sponsor can also include stipend expenses.
Sponsored research funds generally reimburse the University for the allowable cost of services rendered. Stipends do not reflect payments in exchange for services and they are ordinarily not allowed on sponsored research awards. If an individual is providing benefit to a project under the direction of a principal investigator, he or she should be paid as an employee (a Research Assistant if a graduate student or an Employee Postdoc if a postdoctoral fellow).
Federal Guidance:
OMB Circular A-21 (A-21)
No explicit guidance exists in A-21 for the allowability of stipends, but the Circular does address student support. The only allowance for payments to individuals that do not represent compensation for services rendered appears in Section J.45, Scholarships and student aid costs, which says such payments are allowable ". . . only when the purpose of the sponsored agreement is to provide training to selected participants and the charge is approved by the sponsoring agency."
Two sections of A-21, Section J10 and G, suggest that stipends should not be charged to research awards. First, Section J10 requires that amounts paid to individuals for their services on federal programs be effort reported, implying that payments to individuals which are not for services rendered should not be funded by research awards. Harvard's effort reporting system does not include stipends, since these amounts do not represent compensation for work effort. And, Section G requires that the University include all modified total direct costs allocable to benefiting activities across its major functions in determining indirect costs. If funds used to support effort directly benefiting organized research are coded as stipends, these costs are excluded from the research base in violation of A-21.
National Institutes of Health
The National Institutes of Health Grants Policy Statement (Revised December 1, 2003) states explicitly that stipends are not allowable on research grants. This definitive statement appears twice in Part II: Terms and Conditions of NIH Grant Awards
Subpart A: General; Selected Items of Costs. Under Salaries and Wages, it states: "Payments made for educational assistance may not be paid from NIH research grant funds even when they would appear to benefit the research project." Further, under the entry for Stipends, it states: "Stipends are not allowable under research grants even when they appear to benefit the research project."
National Science Foundation
The National Science Foundation Grant Proposal Guide allows for stipends only in support of participant costs at conferences, symposia, workshops, or other specific training activities. In these cases, the scope of work should include a description of the training activity and NSF would have acknowledged that participant costs would be funded by stipends. NSF guidelines do not provide an allowance for payments to non-employees or non-consultants for activities that benefit a research award.
Given this clear guidance from NIH and NSF, Harvard's two dominant federal sponsors, University policy follows this guidance for all federal awards, regardless of agency.
University Guidance:
Stipends are only allowed if there are specific training activities included in the scope of work as proposed and awarded by the federal sponsor.
Outgoing federal proposals that include stipends in the budget should include a description of a training purpose in the award. Graduate student support that is not identified explicitly as "stipend" will be considered "compensation" and should carry indirect costs. OSP offices and tub-level research administrators will review proposals to prevent submission of stipends on research awards.
At the appointment stage, tub and department academic appointment administrators should be sure that stipends are allowable if a federal award is involved. Because awards that might allow stipends are not readily identified by fund number or other unique attribute, research administrators should coordinate with appointing officials to communicate whether or not a specific federal award can be used to fund stipends.
During financial reviews, tub or department financial managers of sponsored funds are responsible for reviewing awards for allowable costs and other compliance concerns. Stipend expenses on a federal award should trigger verification that stipends are allowable on that award. Similarly, OSP financial officers will confirm the allowability of stipend charges on federal awards during their periodic reviews of financial activity.
For cases in which it is not clear whether stipends are allowable, tub-level research administrators and OSP will review the program announcement, the award document, the budget, and the budget justification to determine allowability. If it is determined that stipends are not allowable on the grant, the department financial managers must remove expenses on stipend object codes (6440, 6450, 6452, 6455) from the grant. See below FAQ#4.
Stipends are allowable on non-federal sponsored research awards, but they should be anticipated in proposal budgets and approved by the sponsor. Many sponsors are willing to fund stipends. It is important, however, to distinguish individuals who are providing services to the University from individuals who are being paid without any expectation of work effort. University human resources policies prevail over non-federal sponsor expectations. An individual who is being paid for the services he or she provides to the University should be considered either an employee or an independent contractor. Please see: http://vpf-web.harvard.edu/ofs/policies/documents/indep_contr_class.pdf
Stipend FAQs
1. Which types of NIH awards allow stipends?
In some instances, NIH specifically identifies the "R" series of awards as research awards, but their guidance on stipend allowability seems to make a more general reference. We interpret the guidance to mean that "T" and "F" grants allow stipends, while "R" and "P" awards do not. Other programs should be evaluated on a case-by-case basis.
2. Will appointing researchers as employees, rather than stipendees, increase my indirect costs?
Yes, employees are paid from compensation object codes in the 6001-6399 range. Compensation expenses take overhead. Stipends are paid from object codes in the 6400-6499 range. Stipends are excluded from overhead and are removed from total direct costs to determine modified total direct costs (MTDC).
3. Can a visitor who is an employee or faculty member from another university or a non-Harvard graduate student be paid a stipend?
The employment status of an individual at his or her home institution should not determine his or her appointment status here at Harvard. If he or she is providing services to the University, he or she should be either appointed as an employee or paid as an independent contractor. If he or she is visiting the University for his or her own research or educational purposes and will not be working on federal research, he or she can receive an academic appointment and be paid a stipend.
4. If I find unallowable stipends on a federal research award, can I simply journal the stipend charges to a compensation object code?
No, payments in these object codes reflect the employment or academic appointment category assigned by the appointing official. The payments carry taxation and employment liabilities for the individual and for the University that are specific to the terms of the respective appointment categories. If the costs are recent and fall within the current calendar year, you may be able to work with tub officials to modify the appointment retroactively.
5. If I find unallowable stipends on a federal research award, can I simply journal the stipend charges to another fund using the same object code.
Yes, stipends can be moved off of federal research awards to funds where they are allowable as long as the transaction follows the cost transfer rules and the costs meet the conditions of allocability and allowability for the sponsored fund where the costs end up.
6. What do you do when stipend expenses appear on an invoice from a subcontractor on a federal research award?
Universities use the term "stipend" to cover a variety of affiliations for individuals, and the use of the term itself should not specifically disallow the cost. When an invoice for stipends is submitted by a subcontractor, the costs should be verified and documented as compensation before they are charged to the Harvard federal research award. If possible, the subcontractor should resubmit the invoice using a more accurate description of the costs, such as compensation or salaries and wages for students or postdocs. Subcontracts on federal research awards should indicate clearly that the University will reimburse the subcontractor for expenses incurred to support the scope of work of the subcontract.
Harvard University is responsible for the programmatic and financial monitoring of its sponsored research award subrecipients. A subrecipient is a third-party organization performing a portion of Harvard research projects or other sponsored programs. The terms of Harvard-subrecipient relationships are documented in sub-grant / subcontract / consortium agreements.
These guidelines and procedures are provided to assist responsible faculty and staff in ensuring that subrecipients conduct their portions of research projects in compliance with laws, regulations and terms and conditions of awards and subawards and that project costs incurred by subrecipients are reasonable and allowable.
Roles and Responsibilities
Federal Regulations
The federal regulations that describe subrecipient monitoring are general, but contain the following core elements of compliance:
The above list is not exhaustive of all compliance requirements. In addition to the general elements of compliance noted above, there may be additional sponsor- or program-specific requirements that mandate collecting and documenting other assurances (e.g. on lab animals, human subjects, biohazards, etc.) during the course of a project.
Harvard University's Subrecipient Monitoring Guidelines
On an annual basis, OSP and Tub central research administrators will review all active subcontracts for which monitoring is mandated and inquire further into those that are deemed to require closer scrutiny in light of considerations such as:
- Size of the subrecipient award. Large awards (for example with annual budgets >$500K) would receive substantial and frequent review and monitoring; mid-sized awards (annual budget $100K - $500K) would receive proportionately less substantial and less frequent monitoring; smaller awards (<$100K) would receive general review with the least frequent oversight
- Award size relative to the subrecipient's sponsored research portfolio
- Percentage passed through: the larger the percentage of program award passed through, the greater the need for subrecipient monitoring
- Award complexity, sensitivity of the work and/or extensiveness of the governing regulations
- Prior experience with the subrecipient, e.g. a new subrecipient, an inexperienced subrecipient, a history of non-compliance, having new personnel, or having new or substantially changed systems
- Subrecipient location or for-profit status (remoteness from Harvard may mandate more oversight); increased risk associated with some foreign and for-profit subrecipients dictates that they would merit a greater degree of review, evaluation and attention
- Degree of external oversight by auditors or sponsoring agencies. Note that Harvard is obligated to monitor subrecipients of its federal awards, regardless of the subrecipients being subject to A-133 audits
- Sophistication of the subrecipient's systems and administrative operation
Upon identification of subrecipients that mandate closer scrutiny, based on the above review criteria, OSP and Tub central research administration offices in the Longwood area will take appropriate monitoring actions to ensure compliance with subagreement performance, financial terms and conditions, and with all applicable federal rules and regulations. OSP will coordinate communications with the pre-award offices to avoid duplication.
In addition to routine monitoring procedures, OSP and Tub central research administrators will work with PIs and department administrators to establish channels of communication with subrecipients that require further scrutiny. Administrators at such subrecipient sites may be asked to complete questionnaires (to be filed at Harvard) documenting their internal controls and grants management procedures. In addition, subrecipients that are not subject to A-133 may be asked to submit supporting documentation in the form of original receipts, copies of payroll records, audits, etc. if circumstances warrant.
Tub and Department-level Subrecipient Monitoring Procedures
The frequency and scope of departmental monitoring procedures should be determined jointly by the responsible PI and department grant administrators. A "risk-based" approach to subrecipient monitoring is recommended with the frequency and intensity of monitoring driven by the criteria stated above in the Harvard guidelines. Taking this approach thereby focuses monitoring on the subrecipients who are at greatest risk or potential for non-compliance.
Tub central research administration staff and department grant administrators, with guidance or assistance from OSP staff, should annually consider the following subrecipient monitoring procedures when appropriate:
- Review of Technical Performance Reports should be done on a timely basis by the PI. Any unusual or unforeseen items should be investigated and documentation thereof should be retained in the department's files for ready access by regulators. In some cases, subaward terms may require specified deliverables in addition to, or in lieu of, technical reports.
- Review of Invoices and Expenses-to-Budget should be done for cost-reimbursement subagreements. The subrecipient's invoices showing both current period and cumulative expenses-to-budget are generally required. Department grant administrators should compare subrecipient invoices to established subaward budgets. Evidence of the regular review of invoices by both the PI and the department grant administrator should be in place and retained on file. "Evidence" can be in the form of PI initials or authorizing signature on invoices, e-mail communications, notes of meetings with the department grant administrator, etc.
- Clarification of Invoiced Charges should be requested by department grant administrators for explanations of any unusual, miscellaneous, apparently excessive or other charges invoiced by the subrecipient. If the explanations are not sufficient to render a prudent judgment on the allowability of the cost, and the terms of the subcontract permit, department grant administrators may request detailed justifications from subrecipients. Department grant administrators may also periodically request, if the terms of the subcontract permit, particularly from high-risk subrecipients detailed support for selected invoiced charges to verify their appropriateness and reasonableness. Examples of detailed justifications that may be requested from subrecipients include:
- Payroll records/data
- Copies of paid invoices showing the cost of items purchased and Vendor Justification Forms if required by Federal contract
- Descriptions of services rendered by consultants including hourly rates and time reports
- Details of incurred travel charges, stating the purpose, airfare, meals, ground transportation, unallowable costs, etc.
- Costs determined to be unallowable or unreasonable should be disallowed
- In circumstances where questionable costs remain unresolved, particularly when subcontract terms do not permit requesting supporting documentation, it may become necessary to conduct a definitive audit of all or a portion of questionable costs. (See Audits below) In these cases, department grant administrators may contact the Office for Sponsored Research for coordination of subsequent actions with the appropriate school sponsored research office.
- On-site Visits are a discretionary monitoring procedure. On-site visits conducted by the PI to evaluate both compliance with the scientific objectives of the project and the appropriateness of the subrecipient's administrative systems, processes, and charges should be documented via correspondence, meeting notes, trip reports, etc. and retained on file.
- Audits - discretionary audits of subrecipients are an acceptable monitoring procedure under federal regulations, and all of the University's cost-reimbursement subrecipient agreements contain "right-to-audit" clauses. Formal audits are performed infrequently, however, and departments should contact Harvard's Risk Management & Audit Services (RMAS) before initiating discretionary audits.
- Review A-133 audit reports on-line - Tub central research administrative staff should review A-133 reports filed by subrecipients that expend $500,000 or more of federal funds during the fiscal year and are subject to A-133. Staff may view the subrecipient's A-133 report in the Federal Audit Clearinghouse (FAC) database. This web site provides evidence to verify that the subrecipient has completed an A-133 audit and to assess the presence of audit findings. This FAC verification would be done in lieu of reviewing A-133 reports submitted by the subrecipient to Harvard. In cases of continued inability or unwillingness of a subrecipient to have the required audits, OSP and Tub central research administrators in the Longwood area may consider taking appropriate sanctions.
- When subrecipients have A-133 audit findings - OSP and/or Tub central research administrators may consider issuing a management decision on audit findings, when appropriate, and evaluate subrecipient corrective actions cited in response to audit findings. Corrective actions cited by the subrecipient should be verified to ensure subrecipient compliance and may necessitate on-site monitoring. Tub central research administrators may also consider whether subrecipient audit findings necessitate adjustment of their own records.
- Subrecipients not subject to A-133, including foreign and for-profit entities - Because A-133 does not apply to foreign or for-profit subrecipients, Harvard may establish its own requirements, as necessary, to ensure compliance by such subrecipients. Tub central research administrators should consider using subrecipient monitoring techniques similar to those used for entities that are subject to A-133. Contracts with foreign or for-profit subrecipients should describe applicable compliance requirements and responsibilities. Methods to assess compliance with federal subawards made to foreign or for-profit subrecipients may include pre-award audits, on-site or
Subrecipient contract language advice
All subcontracts under federal government prime contracts and grants should contain language, substantially as set forth below, requiring subcontractors to report promptly to Harvard any problem related to Harvard subcontracts identified in their annual A-133 audits and to submit corrective action plans.
- "AUDIT: Subcontractor agrees to comply with the requirements of OMB Circular A-133. Subcontractor further agrees to provide Harvard, in a timely manner, with access to any of the independent auditors' reports that present instances of noncompliance with federal laws and regulations that bear directly on the performance or administration of this Subcontract. In cases of such noncompliance, Subcontractor will provide copies of responses to auditors' reports and a plan for corrective action(s). All reports prepared in accordance with the requirements of OMB Circular A-133 shall be available for inspection by representatives of Harvard or the government during normal business hours. The Subcontractor agrees that it shall keep for a period of three (3) years following completion of the project, or until all litigation, claims or audit findings have been resolved and final action is taken, such records as may be reasonably necessary to facilitate an effective audit The Subcontractor shall cooperate with Harvard in resolving questions that Harvard may have concerning the auditors' report and plans for corrective action(s)."
Subrecipient Risk Analysis Category Guidelines and Examples
Policy Title: Sponsored Travel Number: Effective Date: 04/01/06 Revision Date: 07/01/08 Responsibile Office: Office For Sponsored Programs
All travel expenses charged to federally sponsored projects are governed by the cost principles of OMB Circular A-21. Therefore, charges must pass the following three tests:
Harvard travelers who use federal funds (fund range100000-199999) to purchase international airfares (defined as trips taking more than six hours of fly time, including Alaska & Hawaii, but excluding trips to Canada and Mexico taking under six hours) should follow all the Domestic Air Travel Guidelines noted above, with the following exceptions:
- International travelers may purchase the lowest cost business-class tickets, and
- Must fly on US Flag Carriers when departing from the US and where available while abroad, even though less costly foreign flag carriers are available, unless other circumstances described in the Federal Awards Travel Reimbursement Exception Form FATREF
- For foreign air travel completed completely outside the US, foreign carriers may be used only when no US Flag Carriers provide service in the area of travel or when use of foreign carriers is a matter of necessity as defined by the Act.
Harvard has developed strategic partnerships with several preferred travel agencies that provide Harvard travelers with high-quality customized travel services and offer airfares at competitive prices that are often equal to or better than non-preferred travel agencies. The University strongly recommends but does not require that all Harvard travelers take advantage of Harvard's negotiated airfare rates available through Harvard's preferred travel agencies: http://vpf-web.harvard.edu/ofs/travel/tra_exp.shtml.
See Procedures Section for reimbursement procedures for domestic and international travel.
Harvard travelers using federal funds may also choose train travel when it is an economical and practical alternative to air travel. Harvard employees will receive a discount on Amtrak for both the high-speed Acela Express Service and the Regional Metroliner Service; these discounts are only available when tickets are purchased through the Harvard Travel Center (617-496-8000), or http://www.travel.harvard.edu.
While travel charged to non-federal sponsored funds (fund range 200000-299999) will not be held to the standards established for federally-funded travel, travel expenses charged to non-federal sponsored funds will be assessed for reasonableness within the allowable class of service and, if deemed reasonable, may be charged in full to the non-federal sponsored account. "Reasonableness" is assessed on a case-by-case basis by the Travel Office (and OSP if necessary), but the cost for the airfare purchased should be similar to prices quoted by one of Harvard's preferred vendors for the same itinerary and class of service. Any expenses deemed to be unreasonable will be returned to the department and will need to be charged to a non-sponsored account.
All air travel expenses charged to Harvard sponsored federal funds (fund range 100000-199999), whether incurred by Harvard travelers or non-Harvard visitors, are subject to the federal cost principles detailed in OMB Circular A-21, Cost Principles for Educational Institutions, section J. 53. c. "Commercial Air Travel". Per A-21:
Airfare costs in excess of the customary standard commercial airfare (coach or equivalent). or the lowest commercial discount airfare are unallowable except when such accommodations would: (a) require circuitous routing; (b) require travel during unreasonable hours; (c) excessively prolong travel; (d) result in additional costs that would offset the transportation savings; or (e) offer accommodations not reasonably adequate for the traveler's medical needs. The institution must justify and document these conditions on a case-by-case basis in order for the use of first-class airfare to be allowable in such cases.
Unless a pattern of avoidance is detected, the Federal Government will generally not question an institution's determination that customary standard airfare or other discount airfare is unavailable for specific trips if the institution can demonstrate either of the following: (a) that such airfare was not available in the specific case; or (b) that it is the institution's overall practice to make routine use of such airfare.
United States law 49 U.S.C. 40118, commonly referred to as the "Fly America Act," requires use of U.S. flag air carrier service for all air travel funded by the U.S. Government. In cases where a U.S. flag air carrier does not provide acceptable service for a particular leg of a trip, foreign air carrier service may be used, but only to or from the nearest interchange point on a usually traveled route to connect with U.S. flag air carrier service. In these circumstances, the Federal Travel Regulation sections 301-10.135-138 specify the exception criteria used to determine the non-availability of a U.S. flag air carrier. Federal Travel Regulations). International air travel on foreign air carriers sometime could meet the requirements of the Fly America Act when a U.S. flag air carrier has a code sharing arrangement with a foreign air carrier. Federal regulations have been revised to indicate that the ticket (or documentation for an electronic ticket) must identify the U.S. Flag air carrier's two-letter designator code and flight number, which is located on the right-hand section of the passenger receipt. This indicates that the flier is in a U.S. Flag carrier seat, regardless of the air carrier that owns the aircraft.
Expenses charged to federal funds are audited annually under OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. The A-133 audit includes tests for compliance with the cost principles in A-21 and for compliance with the grantee's policies, which must adhere to the OMB A-21 guidelines and federal travel regulations described above. To ensure compliance with federal government regulations, Harvard travelers must be aware of and comply with the requirements detailed below.
All travelers who are charging their travel costs to sponsored funds must comply with this policy. This may include faculty, staff, students and non-Harvard visitors.
Harvard University's Travel and Entertainment Policy and Reference Manual for all travel-related expenses
Related Documents
must be completed, approved and submitted with the reimbursement request. must be completed, approved and submitted with the reimbursement request. that no U.S.-flag carriers were available at the time of the trip and that traveling on a foreign air carrier was a matter of necessity. Please note that the FATREF includes a list of criteria for determining the non-availability of a U.S. flag carrier. Lower cost and personal convenience are not acceptable criteria for justifying the non-availability of a U.S. flag carrier. or to attach other travel documentation that provides sufficient evidence of non-availability of a U.S. flag carrier will result in the expense report being returned to the department. The airfare will need to be charged to a non-sponsored account. Please note that any other airfare costs incurred outside of this policy (e.g., a visitor who flies business class rather than coach class on a domestic flight) will also be returned to the department and subsequently charged to a non-sponsored account. If the web voucher approver can determine the allowable cost of the ticket, that amount may be charged to federal awards with the unallowable portion charged to a non-sponsored account.
)For further information, please contact the Contract Manager, in the Travel Office at 617-495-9308, or the Sponsored Programs Officer and Manager, in the Office for Sponsored Programs at 617-432-6281.
Policy Title: Effort Reporting Number: OSP-2 Effective Date: July 1, 2008 Revision Date: July 28, 2009 Responsibile Office: Office For Sponsored Programs
Harvard University maintains systems and procedures documenting the distribution of activity to individual sponsored agreements in compliance with federal regulations as defined by the Office of Management and Budget Circular A-21, Principles For Determining Costs Applicable To Grants, Contracts, And Other Agreements With Educational Institutions (revised 05/10/04). All Principal Investigators ("PIs") are required to certify their own effort as well as the effort of project staff, unless they delegate this task to another individual who has sufficient technical knowledge and a suitable means of verification that the work was performed.
The University receives funding for sponsored projects from external sources, including significant funding from the federal government. Federal regulations require that any person paid from, or with a commitment on, a federally sponsored award certify that the salary paid, or the commitment, is reasonable in relation to the effort or activity actually expended on the award. Non-compliance with OMB Circular A-21's effort reporting requirements would result in disallowance of costs for salary and wages and would limit the recovery of indirect costs due to the University's failure to isolate research salaries and wages from costs associated with other University activities. Non-compliance would also negatively affect the University's reputation and would impair our ability to function as a research collaborator on federal subawards from other institutions.
Each part of the University that accepts federal funding is required to employ effort reporting or salary certification practices that meet the requirements of A-21 section J.10. In addition, if a non-federal sponsor requires effort reporting, refer to tub-specific procedures.
Faculty who serve as PIs on federal awards have accepted responsibility for stewardship of federal resources and are required to:
Within each school, unit, or department, administration of the effort reporting and salary certification is administered by each school, department or unit.
Faculty Effort Certification
FAS
FAS Faculty Effort Reporting
FAS Supplemental Compensation
HMS
HMS Faculty Effort Reporting
HMS Salary Certification
SPH
SPH Faculty Effort Reporting
SPH Salary Certification
Cost Transfer Policy
FSS Functional Specifications for Summer Salary Certification
FSS Functional Specifications for Academic Year Effort (not yet written)
Office of Management and Budget Circular A-21, Principles For Determining Costs Applicable To Grants, Contracts, And Other Agreements With Educational Institutions (revised 05/10/04). (http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html)
COGR document
(http://www.rsp.wisc.edu/effort/COGR_EffortPaper.pdf)
Procedures
Staff Monthly Salary Certification
For all tubs, certification of monthly salary for staff is performed using the CREW report titled Monthly Salary Certification. The financial reporting system generates a report for each sponsored activity and subactivity and reports the salary for each employee compensated on each subactivity. The PI certifies that the salary reasonably reflects the work performed on the project. In cases where the PI is not available for certification, the PI designates a responsible official who has sufficient technical knowledge or a suitable means of verification that the work was performed. Within each tub, the forms are collected, retained, and reviewed for timeliness and completion.
Faculty Effort Reporting - Summer and Academic Year
In the absence of tub-specific policies, Harvard faculty certify their academic-year and summer effort separately. Academic-year effort reporting occurs in the fall semester for the previous academic year. Faculty academic-year salaries are recorded in object codes 6010, 6020, and 6030. Reporting for summer effort occurs in the spring semester for the previous summer. Faculty summer salaries are recorded in object code 6040. All faculty certifications must be completed and certified within nine months of the end of the period covered.
Administrative activities
Includes administrative and supporting services that benefit common or joint departmental activities but cannot be directly attributable to instruction or organized research.
Committed effort
Amount or percentage of time a University employee has agreed to work on a specific sponsored project. It is not necessarily the actual effort expended each month, but a projected amount to be achieved over a period of time (for example, a semester or a year). This commitment is set at the time of the award and can be revised during the award, e.g. through annual progress reports to the NIH.
The value of third-party in-kind contributions and the portion of the costs of a project or program not borne by the sponsor. Matching or cost sharing may be required by law, regulation, or administrative decision. Costs used to satisfy matching requirements are subject to the same policies governing allowability as other costs under the approved budget.
Transfer to a federally funded sponsored account of a charge previously recorded elsewhere.
Method of certifying that an individual was compensated based on his or her activity performed during a specified period.
All research and development activities of the University that are separately budgeted and accounted for, including Sponsored research and University research.
Legislatively mandated provision limiting the direct salary (also known as salary or institutional base salary, but excluding any fringe benefits and F&A costs) for individuals working on grants, cooperative agreement awards, and extramural research and development contracts.
Mechanism by which faculty or staff verifies that work was performed and states that the salaries and wages charged to sponsored awards or to other categories as direct charges are reasonable in relation to the work performed. The certification must occur at least annually and must be signed by the employee, principal investigator, or responsible official using a suitable means of verification that the work was performed.
Salary paid to faculty with 9-month appointments for their effort during the months outside of their academic appointments, specifically, during June, July, and August.
Effort that is over and above that which is committed and budgeted for in a sponsored agreement.
Office for Sponsored Programs (OSP):
- Each month, the departmental administrator should run the 'segments' report in crew Date parameters should be for anticipated end dates to be 'next 120 days.'
- OSP will prepare a draft FSR based on the latest PER figures during the last 30 days of the 90-day reporting period and send it (via fax or email) to departments for review and approval (generally 2 weeks before submission date). A memo will be sent along with the draft FSR to the department for further clarification on issues regarding costs compliance, cost overrun, or underspent situation.
- OSP will not report expenses that have not posted to the G/L at the time of FSR preparation, except under exceptional circumstances (to be determined and approved by OSP on a case by case basis).
- If OSP does not hear back from the department within 5 business days, OSP will notify department or tub level financial officer before submitting the report. However, the report will not be held beyond the FSR submission deadline if a reasonable effort has been made by OSP. Only under extenuating circumstances, will OSP approve the request to postpone FSR submission.
Department:
- Monthly generation and review of "Awards Ending in 4 Months or Less" report. Take timely action for requesting no-cost extensions if they are needed.
- Ensure all outstanding charges are processed in the G/L and complete the account reconciliation process within the first 60 days of the 90-day reporting period.
- Account reconciliation process should include ensuring that all expenditures on the account are allocable, reasonable, consistent and incurred within the reporting budget period. Journals or cost transfers should be prepared immediately to remove any disallowed costs from the federal awards.
- For training grants, preparing the FSR involves reconciling stipend and tuition payments for each trainee. Departments should send all trainees' appointment forms (2271 forms) to OSP no later than 60 days prior to the FSR submission date (these forms should be completed before any expenses are incurred for the trainee and sent to OSP at that time).
- Upon receiving the draft FSR from OSP, the department has 5 business days to review and approve the FSR and respond to OSP with any pending issues.
- Under extenuating circumstances, if the department needs more time for account reconciliation, the request to postpone FSR submission should be first reviewed and confirmed by the tub level manager and then approved by OSP.
Policies and Procedures
Federal Awards:1. FSR Reporting
Annual FSRs are submitted to the agencies within 90 days of the end of each budget year for federal awards that require annual reporting, e.g. NIH grants that are excluded from SNAP (Streamlined Non-Competing Award Process). Most Federal awards require a Final FSR at the end of award period and the final FSR must be submitted to the agencies within 90 days of the project/award end date. Late FSRs can mean severe penalties for the university, such as loss of Expanded Authorities. The FSR preparation process requires the department to complete account reconciliation and ensure all appropriate charges are posted to the G/L within the first 60 days of the 90-day reporting period. During the last 30 days, OSP will work with the department to complete FSR preparation and submission. Annual FSRs are submitted to the agencies within 90 days of the end of each budget year for federal awards that require annual reporting, e.g. NIH grants that are excluded from SNAP (Streamlined Non-Competing Award Process). Most Federal awards require a Final FSR at the end of award period and the final FSR must be submitted to the agencies within 90 days of the project/award end date. Late FSRs can mean severe penalties for the university, such as loss of Expanded Authorities. The FSR preparation process requires the department to complete account reconciliation and ensure all appropriate charges are posted to the G/L within the first 60 days of the 90-day reporting period. During the last 30 days, OSP will work with the department to complete FSR preparation and submission.In some cases departments will prepare Financial Status Report/Invoice or provide OSP with additional supporting documents because of the level of detail required by the sponsor (i.e. costs breakdown by task, or salary breakdown by individual effort % etc.) These Financial Status Reports/Invoices must be submitted to OSP in order to obtain institutional approval.
- Some agencies may require the reporting of Cost Share. The actual non-sponsored cost share dollars and account number must be documented by the department and forwarded to OSP for inclusion in FSR and record retention.
- Some federal awards (grants or contracts) have more frequent reporting requirements such as quarterly FSR-269 as well as quarterly/monthly reports (e.g. FS272, FS270 or FS1034) this is determined by the award terms and conditions. Ongoing interim reports (if less than annually) will be submitted by OSP without departmental approval.
2. Reviews and Non-reportableAnnual Review
- For federal awards that do not require annual reporting, e.g. NIH non-competing years if under SNAP, OSP conducts an annual review of expenditures by completing an internal FSR-269 form and worksheet. OSP will alert the department if there are cost compliance issues, e.g. questionable transactions, variances on restricted budget categories or large unexpended balances (> 25% of current year budget).
- Departments should respond to OSP within 5 business days and take any necessary action such as processing journals, cost transfers or budget reallocations.
Final Review
- For non-reportable federal awards (e.g. NIH Fellowships), the department should reconcile the accounts and provide final closing figures to OSP within 90 days of the end of the award period. Timely reconciliation of these accounts will reduce the risk of late and possibly unallowable cost transfers and will also enable OSP to reconcile federal letters of credit in a timely manner.
Non-reportable
- Although no individual financial reports are submitted to the NSF, OSP must reconcile the expenditures to the budget at the award termination. OSP must also submit a collective quarterly report to the NSF on all open grants via the cash management letter of credit mechanism.
- A reminder email will be sent by OSP to the department requesting account final closing figures within 45 days after the award ending date.
- Departments should reconcile NSF accounts and provide final closing figures to OSP within 90 days of the award end date to ensure OSP can submit accurate and appropriate expenditures to NSF in a timely manner.
- OSP also conducts annual review for NSF awards. Departments should respond to OSP's concerns regarding questionable transactions within 5 business days and take actions immediately by processing journals, cost transfers, or budget reallocations.
3. Invoices (Contracts and Subcontracts)Non-Federal Awards:
- Most federal contracts and subcontracts require submitting invoices for cost reimbursement. Most interim invoices/reports (monthly, quarterly, semi-annually) are submitted by OSP without departmental approval; however OSP will contact the department with any questions or concerns.
- In some cases departments will prepare the invoices/reports or provide OSP with additional supporting documents because of the level of detail required by the sponsor (i.e. costs breakdown by task, or salary breakdown by individual effort % etc...) These invoices/reports must be submitted to OSP in order to obtain institutional approval.
- At the end of each budget period, OSP will send the invoice/report to the department for review and approval if there is a restriction on the fund balance to be carried forward.
- Submission deadline for most final invoices is within 45 - 60 days after the contract or subcontract end date. (to facilitate submission within 90 days to Prime sponsor, eg. NIH). Sponsor may NOT honor reimbursement on invoices submitted after 45-60 days.
- Final invoice is prepared by OSP based on latest PER and sent to department for review and approval. Turn around time for approval is 5 business days.
- If OSP does not hear back from the department within 10 business days, the account will be forwarded to the tub level manager for further action. If appropriate action is not taken within 5 days, OSP will submit the invoice for expenses posted to the G/L. The department will be responsible for absorbing any costs not reimbursed due to failure to notify OSP of expenses incurred in time for inclusion in final invoice
- Most interim invoices/reports (monthly, quarterly or semi-annually) will be submitted by OSP without departmental approval.
- Interim reports that require departmental action (budget variance resolution, expenses detail breakdown, carryforward restriction, P.I. signature, etc) will be sent to the department for review and approval.
- All final reports/invoices (including annual report) will go to the departments for review and approval. The approval process includes ensuring that all costs incurred within the award/budget period and the expenses are appropriate according to the terms and condition of the awards.
- Turn around time for departmental approval is 5 business days. For non-federal awards that have specific deadlines for submitting the final invoices/reports for cost reimbursement, if OSP does not hear back from the department within 10 business days, the tub financial manager will be notified for further action. In this case, the department is responsible for absorbing any costs if sponsor declines to pay the late invoice.
- In some cases departments will prepare the invoices/reports or provide OSP with additional supporting documents because of the level of detail required by the sponsor (i.e. costs breakdown by task, or salary breakdown by individual effort % etc...) These invoices/reports must be submitted to OSP in order to obtain institutional approval.
Policy: Overspent Accounts
Overspent accounts are sponsored research accounts for which expenditures on the University's general ledger are greater than expenditures agreed upon by the department administrator and reported to the sponsoring agency. Revision of Financial Status Reports to include additional expenses will only be considered under exceptional circumstances and must be approved by the Director of Financial Services, Office for Sponsored Programs.
Policy: Underspent Accounts
Underspent accounts are sponsored research accounts for which expenditures on the University's general ledger are less than expenditures agreed upon by the department administrator and reported to the sponsoring agency.
Procedures: Underspent Accounts
Extenuating Circumstances
Exceptions to the policy on unreconciled accounts will be made only in extenuating circumstances and will require:
Special Situation: Training Grants