4.2 Stanford Policy, Award T&C, Laws and Regulations
An award is governed by a host of compliance requirements. The Department Administrator and PI must know how to locate the requirements and understand how to apply them to spending the award.
Compliance requirements always include the award terms & conditions, Stanford Policy, state and federal laws and mandates. They may also include the federal agency policy book, federal regulations ( the Uniform Guidance, OMB Circulars A-21, A-110,A-133, the FAR).
When considering the order of precedence in which to apply compliance requirements, keep in mind a federal awarding agency can be less restrictive than federal regulations, and they can be more restrictive with permission from OMB. Federal agencies provide guidance in their Policy Book. Stanford policy incorporates all regulations and is as restrictive as or more restrictive than federal guidance.
2. Stanford Policy
The provisions of OMB Circular A-21, A-110, A-133 and the Uniform Guidance are applicable to all federal agencies which award federal dollars. Stanford has translated these cost principles into its University policies relating to financial aspects of sponsored projects administration. Stanford Policy can be more restrictive than federal policy. OSR and RMG will not accept an award that violates any aspect of the Research Policy Handbook.
Find the following Stanford policies here.
Stanford Research Policy Handbook (RPH) Chapter 3 addresses: Fiscal Responsibilities of Principal Investigators including:
Stanford Research Policy Handbook (RPH) Chapter 15 addresses: Financial Aspects of Sponsored Projects Administration including:
15.1 Facilities & Administrative (Indirect Cost) and Fringe Benefits Rates
15.2 Facilities and Administrative (Indirect Cost) Waivers
15.4 Charging for Administrative and Technical Expenses
15.5 Salary Cap Administration
15.6 Tuition Allowance for Research Assistants
15.7 Undergraduate Student Salaries Charged to Sponsored Projects
15.8 Cost Transfer Policy for Sponsored Projects
Stanford Administrative Guide, Chapter 3 addresses:
- Funds Management
- Expenditure Management
- Infrastructure Charges and Expendable Funds
The Stanford Property Administration Manual contains policies and procedures regarding the acquisition, maintenance, reporting and disposition of capital assets.
The Service Center Manual is the repository for policies and practices related to Stanford's service centers.
3. The Award Specifc Terms & Conditions (T&C)
Read all the terms and conditions carefully. They may require prior approvals from the sponsor before certain expenditures such as foreign travel and equipment are allowed. In addition some costs may be specifically identified as unallowable. An example of this is although federal regulation doesn't list travel as an unallowable cost, the award may state that travel costs are unallowable. In that case project travel costs cannot be charged to that award. Apply the award specific terms & conditions before applying other federal regulations.
The award terms & conditions can be either attached to the award document, or incorporated by reference in the following sources located on the awarding agency website. It is incumbent upon the administrator to locate, read, understand and apply the referenced for the award.
- The federal sponsor’s policy manual e.g. the National Science Foundation Proposal & Award Policies & Procedures Guide, or the National Institutes of Health Grants Policy Statement.
- For federal awards issued after December 26, 2014 the Uniform Guidance
- For federal awards issued prior to December 26, 2014, the Office of Management and Budget: OMB circular A-21, which addresses cost principles for educational institutions and OMB A-110, which addresses uniform administrative requirements for grants and agreements.
- Federal Acquisition Regulations FAR, which outline regulations for federal contracts
- Non federal sponsor guidelines. E.g. American Heart Association Awards Management web page
4. Federal Regulations for Grants
Federal funding accounts for a large percentage of Stanford's annual revenue. This fact underlies many of the requirements for managing an award. As a sponsor of both research and instructional activities at Stanford, the federal government pays its fair share of both Direct and Facilities & Administrative costs. The manner in which those costs are to be charged and reimbursed is governed by federal regulations.
About The Office of Management and Budget
The Office of Management and Budget (OMB) is one of the agencies of the Executive Branch of the U.S. Government. OMB's predominant mission is to assist the President in overseeing the preparation of the Federal budget and to supervise its administration in Executive Branch agencies. OMB evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities.
Working cooperatively with Federal agencies and non-Federal parties, OMB establishes government-wide grants management policies and guidelines through circulars and common rules. These policies are adopted by each grant making agency and inserted into their Federal regulations.
A. OMB Circular A-21
OMB Circular A-21 is effective for federally sponsored agreements awarded before December 26, 2014. OMB Circular A-21, is titled Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements with Educational Institutions. The cost principles in A-21 provide the general accounting rules for colleges and universities. These principles define those costs that are allowable and allocable to the federal government.
B. OMB Circular A-110
OMB Circular A-110 is effective for federally sponsored agreements awarded before December 26, 2014. The circular establishes uniform administrative requirements for federal grants and agreements awarded to institutions of higher education. Federal awarding agencies shall not impose additional or inconsistent requirements, except…(in limited cases where approved by OMB or where in writing in special conditions). Agencies can implement A-110 but they cannot be more restrictive than A-110. This Circular sets forth standards for the pre-award and post-award administration of grants to and agreements with institutions of higher education. It includes provisions related to property, procurement standards, reports and records, among others.
1. Research Terms & Conditions
The Research Terms & Conditions only apply to Federal awards received before December 26, 2014 incorporating the requirements in OMB A-21 and A-110.
The Research Terms & Conditions incorporate OMB Circular A-110 and make additions and clarifications to it, with the goal a core set of terms and conditions for research grants.
Federal agencies that support research grants may utilize a standard set of core administrative terms to the extent practicable. Review your sponsor award document to insure the award incorporates "Research Terms and Conditions." Although these terms and conditions are incorporated by most federal grant agencies, they are posted on the NSF website.
A Prior Approval Matrix showing required prior approvals for those grant award incorporating the Research Terms and Conditions is available.
C. Uniform Guidance
The Uniform Guidance is effective for federally sponsored agreements and new funding increments awarded on or after December 26, 2014.
The Uniform Guidance streamlines and supersedes guidance that was previously contained in eight different OMB Circulars. OMB has eliminated numerous overlapping duplicative and conflicting provisions of guidance that were written separately over many years.
The Uniform Guidance is made up of subparts A-F and 3 appendices.
Subpart A Acronyms and Definitions
Subpart B General Provisions
Subpart C Pre-award Requirements & Contents of Federal Awards
Subpart D Post Federal Award Requirements
Subpart E Cost Principles
Subpart F Audit Requirements
Appendices I Funding Opportunities, II Contract Provisions, III Indirect Costs (F&A)
Much of the information you need to located in the Uniform Guidance is located here.
Stanford has created resources to help you with the Uniform Guidance, find it here.
D. Cost Principles
Federal Regulations including OMB Circular A-21 and the Uniform Guidance includes a fundamental tenet of research administration: an expense qualifies as a direct cost of a sponsored project and can be charged to a project only when it meets the four criteria of:
Allowable Costs
These costs are defined in A-21, the Uniform Guidance and in the terms and conditions of an award.
Example of an allowable cost: There is no prohibition against travel costs in your award, so the costs are allowable.
Example of an unallowable cost: At the conference, the student has dinner with a colleague and orders wine. The cost of the wine, plus tax and tip, is an unallowable cost, and that part of the bill may not be charged to the NSF project.
Allocable Costs
Only those costs which benefit a project may be charged to that project.
Example of an allocable cost: An NSF grant includes funds for a grad student to attend a conference in Chicago. The conference focuses on the research activity funded by the grant, and the student is presenting a paper. Therefore this is an allocable cost. (Include the conference agenda or other description in your travel reimbursement documents).
Example of an unallocable cost: A grad student attends a conference in Austin, TX because it is close to his parent's home and charges it to his NSF grant because it has funding available.
Reasonable Costs
These costs must reflect what a prudent person would pay.
Example of a reasonable cost: A student travels to the conference in Chicago and used the food per diem rate published on Fingate.
Example of an unreasonable cost: The student brings back receipts indicating that he spent $150, excluding the wine, for his own dinner. Even though the trip was allowable and allocable, that cost is not reasonable and it may not be charged to the project.
Consistent Costs
All costs must be handled consistently across Stanford. This is accomplished by following Stanford policy.
E. Cost Accounting Standards
Both A-21 and the Uniform Guidance provides principles for Four Cost Accounting Standards (CAS):
CAS 501 – Consistency in Estimating, Accumulating and Reporting Costs
CAS 502 – Consistency in Allocating Costs Incurred for the Same Purpose
CAS 505 – Accounting for Unallowable Cost
CAS 506 – Consistency in Using the Same Cost Accounting Period
The intent of Cost Accounting Standards is to: preclude a perceived over charge to the government, standardize requirements for recipients, standardize university costing practices, and prevent charging unallowable costs to federal awards.
5. Guidance for Contracts
Federal Acquisition Regulations (FAR) is the primary document that implements the Federal Acquisition Regulations System. The FAR becomes the terms and conditions. Universities non-federal sponsors with federal primes may include FAR or the sponsor’s terms and conditions. Research administrators must be able to locate the FAR clauses incorporated in their contract agreement.
The cost principles in subpart E and the audit requirements in subpart F of the Uniform Guidance are applicable to FAR based contracts issued by the Federal Government to an educational institution; state, local, Indian Tribal Government or a nonprofit.
Nonfederal contracts may have their own unique terms and conditions.
A. FAR
There are many FAR clauses. The following are most often included in fully funded cost reimbursement contracts.
FAR 52.216-7 Allowable Cost and Payment
Issue: Subpart 31.3 incorporates OMB A-21 as the cost principles for contracts with educational institutions. It also addresses billing and closeout procedures.
Action: Become familiar with A-21 and the Uniform Guidance and this clause.
FAR 52.232-20 Limitation of Cost
Issue: notify the sponsor that contract costs will exceed the estimated costs. The government must respond or contractor is no longer responsible to continue work.
Action: notify the sponsor when you expect in the next 60 days to have spent 75% of the estimated cost, or expect expenses to be greater or substantially less than previously estimated.
B. FAR Travel Guidance
FAR 52.247-63 Preference for US Flag Air Carriers
Purpose: imposes the requirement to use only US flag air carriers for government-funded travel
Issue: foreign travel becomes an unallowable cost if US carrier is not used (except certain predefined situations)
C. Additional Travel Guidance
Document Compliance
To satisfy regulatory requirements for charges to a federally sponsored project, a U.S. flag carrier designator code must be present on documentation for a flight; for example, UA 1776 for United Flight 1776 or AA 1787 for American Flight 1787. If you believe that you were on a code share flight, but there is no documentation showing the U.S. flag carrier code and flight number, you cannot charge the flight to a federally sponsored project.
A paper ticket or documentation for an e-ticket normally provides this proof. However, in some code sharing situations, we have found that only the boarding pass showed the U.S. flag carrier code. In this case, it makes sense that the boarding pass be retained for documentation.
If you are claiming an exception under the Act, detail the certification requirements for federal audit purposes. When submitting your expense report for a flight that does not comply, you must document the reason for the exception by including a Certification of Exception to Fly America Act Form.
Booking Travel
Stanford’s preferred travel agencies have agents that are well versed in the Fly America Act. You can find them here. If you advise them that your trip is federally funded, they will provide flight options that comply with the Act and will provide certification of that compliance for you. For questions related to compliance with the Act, contact the Financial Support Center at 723-2772.
Fly America Act Exceptions
There are strictly limited circumstances in which an exception may be appropriate. For example: a U.S. flag carrier does not provide service on a particular leg of your trip, the use of a U.S. carrier will unreasonably delay your travel time as defined by regulations, you are involuntarily rerouted, for medical or safety reasons, as defined by regulations.
The biggest exception to the Fly America Act is the Open Skies Agreement. On October 6, 2010, the United States and European Union (EU) "Open Skies" Air Transport Agreement was published by the U.S. General Services Administration providing full explanation of the multilateral agreement in place so that qualifying travelers, whose travel is supported by federal funds, may travel on European Union airlines as well as U.S. flag air carriers. A list of current member countries of the European Union is available at the Europa website (plus Norway and Iceland). There are also Open Skies agreements with Australia, Switzerland and Japan.
Find current international travel information on Fingate.
D. Equipment Title on Contracts
Correct determination of equipment title prior to placing purchase requisition is critical. It will determine whether the transaction is taxable. It also defines identification, stewardship and reporting compliance requirements for the asset as well as disposition options available at the end of its useful life. Purchases where title vests with the sponsor at time of acquisition are not taxable.
Determination of title for property purchased with contract funds (primarily Federal contracts) can be more complex. A single award may have a mixture of equipment with title vesting with Stanford or with the sponsor at the time of acquisition. Title for Government Furnished Equipment usually reverts to the government for transfer to another sponsor or project.
The terms and conditions may vary from contract to contract. Unless otherwise specified in the contract, the primary determining factor within a contract will be the FAR property clause invoked in the contract. Later during the life of the award, title to the equipment purchased may transfer to Stanford.
For sponsor-titled equipment, notification must be made to the sponsor upon completion of contract performance or when the item is no longer necessary for the purpose for which it was acquired on the contract. The Property Management Office serves as liaison between Stanford and the sponsor to determine the appropriate disposition of the equipment. Timely reporting is very important.
E. Government Property
FAR 52.245-1 Government Property
Purpose: Defines property; establishes title and management standards
Issue: Title vest in government unless stated elsewhere in contract Alt. ll (e) 3 allows us to retain title if under $5,000 & approved
Action: Request Alt. ll (e) (3) if you want title
Prior approval for the use of equipment is required. If Alt. ll (e)(3) is invoked, ensure sales tax is paid on invoices, including those with equipment where title will vest with Stanford. It addresses full lifecycle, not just title. The lifecycle processes that often present biggest challenges are: inventory, use, modification, loss or damage, transfer, location, disposition, handling of residual materials and storage pending award or lab renovation.
