To authorize the expenditure of funds to be charged directly to sponsored projects, the originating department must assure that:

• the estimated charge is reasonable and necessary
• the expenditure is allowable by the funding source and, if charged to a federally-funded project, by OMB Circular A-21 or the Uniform Guidance
• the expenditure is allocable to the project, i.e., provides benefit to the project
• the funds are available within the authorized award amount and funding limitations
• the justification for the expenditure is documented
• the method of allocation of costs is appropriate and documented
• the charge is coded with the correct Expenditure Type and charged to the correct Project-Task-Award (PTA)
• the charge has been processed through the appropriate University system

PI Must Review Technical Performance

Any unusual or unforeseen items should be investigated and documentation thereof should be retained in the department’s files. All concerns about technical performance must be addressed by the PI and communicated with the subawardee.  In some cases, subaward terms may require specified deliverables in addition to, or in lieu of, technical reports.

PIs Must Certify All Invoices

Review of invoices and expenses-to-budget-to-performance must be done for all  subawards. The subrecipient’s invoices showing both current period and cumulative expenses-to-budget are generally required. Department grant administrators should compare subrecipient’s invoices to established subaward budgets.

The Stanford PI’s signature on the invoice is required to certify that he/she approves payment of the invoice, attests that the charges appear reasonable and that progress to date on the subaward is satisfactory and in keeping with the statement of work.

Subaward invoices require the following statement to accompany the PI’s signature: 

“In signing below I approve payment of this invoice and attest that the charges appear reasonable, and progress to date on this project is satisfactory and in keeping with the statement of work.”

Question/Clarify Questionable Charges

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 if the terms of the subaward permit, department grant administrators may request detailed justifications from subrecipient. 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.

On-Site Visits

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 a subrecipient is an acceptable monitoring procedure under federal regulations, and all of the University's cost-reimbursement subaward agreements contain "right-to-audit" clauses. Formal audits are performed infrequently, however, and departments should contact Stanford's Internal Audit Department before initiating discretionary audits.

Monthly Expenditure Statements are the official record of project expenses and the basis for cost reimbursements to Stanford.

Expenditure Statements for sponsored project and cost-sharing accounts must be reviewed each month by a knowledgeable individual, i.e., the Principal Investigator or designee, so that adjustments can be made in a timely manner and rates of expenditures can be monitored to assure availability of funds. This review is documented by means of a signature on the Quarterly Expenditure Review and Certification Report, RM3 149.

Any questionable charges must be brought promptly to the PI's attention and, if needed, corrected by an appropriate transfer. Transfers should be initiated as soon as possible after a need has been identified. Whenever expenses are moved to or between sponsored accounts, the PI must assure that the project which ultimately pays the expense is the project which benefited from that expense, and that there is adequate documentation to support the appropriateness of the transaction. Procedures governing transfers of expense are defined in RPH: Cost Transfer Policy for Sponsored Projects.

Federal regulations require certification of payroll distribution (total salaries) for each faculty, staff, ASR (Academic Staff Researcher), student and postdoctoral scholar whose Stanford salary is charged in whole or in part to one or more of the following:

• Federally sponsored projects
• Subawards with a federal prime sponsor where Stanford is a recipient
• Cost sharing accounts for federally sponsored projects
• Non federally sponsored projects that have adopted the OMB (Office of Management and Budget) Federal Requirements (A-21) or Uniform Guidance

Faculty, and in rare situations designated certifiers, will review and certify employee payroll distribution on an annual basis beginning with calendar year 2013 salaries and wage, using the eCertification system. Prior to certification, the financial or research administrator will review the annual payroll distribution for reasonableness. 

Payroll distribution certification is Stanford's means of providing assurance to federal sponsors that effort was devoted at a level that reasonably reflects the activity for which the employee is compensated by the institution. For anyone whose Stanford salary meets one of the four criteria listed above, the eCertification Payroll Distribution System displays salary charges to: sponsored projects, cost sharing accounts, over the salary cap category and non sponsored category, expressed as a percentage of total Stanford payroll for review and certification.