The PI has overall responsibility for the technical and fiscal management of a sponsored project. This includes the management of the project within funding limitations, adherence to reporting requirements and assurance that the sponsor will be notified when significant conditions related to project status change. While responsibility for the day-to-day management of project finances may be delegated to administrative or other staff, accountability for compliance with Stanford policy and sponsor requirements ultimately rests with the PI.

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

Expenditures for sponsored projects and cost sharing accounts must be reviewed by a knowledgeable individual, i.e., the PI or designee (typically the financial or research administrator) so that adjustments can be made in a timely manner, and that rates of expenditures can be monitored to assure availability of funds.  To be considered timely, monthly expenditures must be reviewed within two months of the end of the month being reviewed.  This review is documented by means of the reviewer's signature on the Quarterly Expenditure Statement (RM149).

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 that ultimately pays the expense is the project that 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 15.8

You should monitor actual expenses against budgeted and identify and address variances (the difference between a budgeted costs and the actual expense incurred.)

When analyzing data keep in mind:

• Effort adjustment in the Labor Distribution systems will appear as a charge/credit to a future period on all reports
• Aone time expenditure or credit may skew the burn rate (i.e. a large equipment expense)
• Cyclical or trend based work can effect a straight line forecast (i.e. summer down size and fall ramp up)

Determine the impact of a variance, both financial and programmatic. Determine whether  it is recurring and must be addressed or if it is just a onetime aberration. What budget category was debited and credited? Why did the variance occur? What will you do about it? 

Forecast future costs based on actual costs to date.

Analyze forecasts and discuss with the PI items such as: Is spending to date in sync with the % of work complete? Will you need to request a “no cost extension”? Do subcontractors need to be contacted? If the PI makes changes, prior approvals from the sponsor or the university may be required. Check re-budgeting authority and Terms & Conditions.

Monitor spending. Use expense to date to calculate how much can be spent monthly for the remaining months of the award to keep within budget.

Example

Award amount = $300,000

Expense to Date [5 months] <$175,000>

Remaining Balance = $125,000

At burn rate of $35,000 monthly you need   $245,000

Quarterly Review and Certification

Sponsored project and cost sharing accounts must be reviewed and certified by the PI every academic quarter, and recorded by signature on the Quarterly Expenditure Statement (RM149). 

The following certification statement appears on Expenditure Statements for every sponsored project and cost sharing account, The PI confirms: 

To the best of my knowledge, salary and wages charged to this project are appropriate in relation to work performed on this project. All other costs charged to this project are, to the best of my knowledge, appropriate. Where required, corrections have been or will be made through the accounting system.

This certification is the responsibility of the project PI (or Co-PI). A PI may delegate the monthly review of expenditures for accuracy, but may not delegate certification of the appropriateness of the charges with one exception:  The PI may only delegate review and certification to a participating Academic Council member or PI eligible individual who is responsible for a portion of the statement of work and is identified as the Task Owner in the accounting system.

The purpose of the review and certification is to confirm that all expenses charged to the account are allowable, allocable to the project, and reasonable. The certification of salary expenditures confirms that salaries charged to the account are supported by a corresponding expenditure of effort during the time period being certified. The certification also assures that other expenditures are for items or services purchased and used during the project period as specified by the award. It is the PI's responsibility to seek a no-cost extension of the award if that is necessary in order to complete the project.

To be considered timely, the expenditure statement must be reviewed and signed within two months of the end of the academic quarter being certified. Issues regarding the timely certification of expenditures should be discussed with the appropriate Department Chair, School Dean, and/or the Associate Vice Provost for Research or the Research Financial Compliance Services Office. Each school and independent laboratory must retain reviewed and certified Quarterly Expenditure Statements.

Adequate explanation and documentation for all project charges must be maintained for four years after the sponsor closes out the award. Where documentation cannot be provided as to the allowability, allocability and reasonableness of any project expense, including but not limited to expenses incurred late in the project period, the sponsor may deny them. In this case, the PI, department or school will be expected to cover the expense from unrestricted sources.

Any departure from the policy or procedures regarding summarization of Quarterly PI Review and Certification must be approved in advance by the DoR (Office of Vice Provost and Dean of Research) and RFCS (Research Financial Compliance and Services Office).

Annual Payroll Distribution Certification

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, 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. 

PIs are responsible for the ongoing fiscal management of awarded projects, including regular monitoring against project period budgets.

For federal cost-type contracts, PIs must assure compliance with the Limitation of Funds and/or Limitation of Cost clauses which include the requirements that the contractor shall notify the Contracting Officer in writing whenever it has reason to believe that 

(1) The costs the Contractor expects to incur under this contract in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of the estimated cost specified in the Schedule; or

(2) The total cost for the performance of this contract, exclusive of any fee, will be either greater or substantially less than had been previously estimated.