Overview of Project Management

Effective sponsored project management supports the PI in accomplishing the statement of work on time, within budget, and in compliance with University policy and sponsor regulations.

Contact

Questions about this topic can be answered by:

OSR Post Award Assignments

RMG Assignments

What Qualifies as a Direct Cost?

According to Stanford policy and federal regulations, an expense qualifies as a direct cost for a sponsored project when it meets all four of the following criteria.

Allowable - as defined in OMB Circular A-21, the Uniform Guidance, Stanford Policy an in the terms & conditions of specific awards
Allocable - only those expenses that benefit a project may be charged to that project
Reasonable - Costs must reflect what a prudent person would pay
Consistent - costs must be handled consistently across the University by following Stanford policy

Everyone who authorizes expenses at Stanford for any purpose must confirm prior to approving a transaction that the expenditures are:

reasonable and necessary
consistent with established Stanford policy and practices, as well as sponsor or donor terms & conditions
applicable to the work of Stanford, which includes; instruction, research, and public service

Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Direct costs include, but are not limited to:

salaries
travel
equipment
material and supplies directly benefiting the sponsored project or activity

Unallowable Costs

Costs are defined as allowable or unallowable for reimbursement by the government. The federal government asserts that federal funds may not be used to pay unallowable expenses. Unallowable expenses may NOT be charged either directly or indirectly to the federal government.

All expenditures at Stanford, regardless of funding source, must be coded as allowable or unallowable so that they can be appropriately included or excluded from indirect cost calculations.

Allowable Expenditures

Are considered appropriate and reasonable by Stanford AND they are eligible for cost reimbursement by the federal government as stated in OMB Circular A-21 or the Uniform Guidance.

Unallowable expenditures

Are considered appropriate and reasonable business expenses by Stanford, BUT they are not eligible for reimbursement by the federal government. Departments may incur these expenses but they must code them as unallowable.

Use the Oracle Expenditure Codes and Descriptions to find the appropriate code for an expense. For a list of expenses that must be coded as unallowable click here.

We must understand the distinction between allowable and unallowable costs. It is crucial to code and categorize expenses correctly to comply with Stanford’s obligation to the federal government for both direct and F&A or indirect cost recovery. Our ability to obtain federal grants and contracts is dependent upon meeting federal requirements.

The integrity of the Stanford's financial systems depends on the knowledge and skill of each of the individuals who process the thousands of financial transactions every day.

Expenses that must be coded unallowable for federal reimbursement include:	University activities that federal regulations require to be coded as unallowable for federal reimbursement:
advertising (only certain types are allowable) alcoholic beverages entertainment fundraising or lobbying costs fines and penalties memorabilia or promotional materials moving costs if employee resigns within 12 months certain recruitment costs, e.g., color advertising certain travel costs, e.g., first-class travel cash donations to other parties, such as donations to other universities, except for small contributions for purposes of "Employee Morale," e.g., a donation in lieu of flowers at a memorial costs in excess of University severance policy interest payments, except certain interest specifically coded as paid to outside parties and authorized by the Controller's Office memberships in civic, community or social organizations, or dining or country clubs (seldom reimbursable by Stanford) goods or services for the personal use of employees, including automobiles insurance against defects in Stanford's materials or workmanship in addition, Stanford voluntarily treats the travel and subsistence expenses of University trustees as unallowable.	fundraising lobbying commencement and convocation (can be allowable when charged to a Task with the appropriate Student Services - Service Type) general public relations and alumni activities certain student activities, e.g., intramural activities, students clubs, etc. managing investments solely to enhance income prosecuting claims against the Federal Government defending or prosecuting certain criminal, civil or administrative proceedings housing and personal living expenses of University Officers selling or marketing of goods or services (does not apply to selling goods or services internal to the university by its Service Centers)

Expenses that must be coded unallowable for federal reimbursement include:

University activities that federal regulations require to be coded as unallowable for federal reimbursement:

advertising (only certain types are allowable)
alcoholic beverages
entertainment
fundraising or lobbying costs
fines and penalties
memorabilia or promotional materials
moving costs if employee resigns within 12 months
certain recruitment costs, e.g., color advertising
certain travel costs, e.g., first-class travel
cash donations to other parties, such as donations to other universities, except for small contributions for purposes of "Employee Morale," e.g., a donation in lieu of flowers at a memorial
costs in excess of University severance policy
interest payments, except certain interest specifically coded as paid to outside parties and authorized by the Controller's Office
memberships in civic, community or social organizations, or dining or country clubs (seldom reimbursable by Stanford)
goods or services for the personal use of employees, including automobiles
insurance against defects in Stanford's materials or workmanship
in addition, Stanford voluntarily treats the travel and subsistence expenses of University trustees as unallowable.

fundraising
lobbying
commencement and convocation (can be allowable when charged to a Task with the appropriate Student Services - Service Type)
general public relations and alumni activities
certain student activities, e.g., intramural activities, students clubs, etc.
managing investments solely to enhance income
prosecuting claims against the Federal Government
defending or prosecuting certain criminal, civil or administrative proceedings
housing and personal living expenses of University Officers
selling or marketing of goods or services (does not apply to selling goods or services internal to the university by its Service Centers)

In addition Stanford does not allow reimbursement for the following. These expenses will not be paid for by Stanford. If incurred, they must be paid for by the individual.

Personal amusement, social activities, or entertainment (outside of activities directly related to University functions or purposes, including employee-employer relations, performance improvement, etc.)
Stanford Faculty Club dues for individual members
Personal, social, or travel club dues
Stanford parking permits for employees or students
Traffic citations for either personal or Stanford vehicles
Personal services or personal purchases
Interest charges incurred by individuals for late payment of their own personal bills
Or any costs specifically disallowed by school or department policy

Example of a cost unallowable for reimbursement by Stanford:

A Senior Research Associate purchases a leather brief case and would like to use university funds to pay for the item. The designer briefcase is made of fine grain leather with brass trim and costs $1,250.

Explanation: The cost is not reasonable, it is not necessary for the performance of the person's job, and is not permitted by University policy because it is a personal item. It must be paid for by the individual.

Example of a cost unallowable for reimbursement by the federal government, but allowable for reimbursement by Stanford:

An important faculty member is retiring from 35 years of service to Stanford. A party is given in his honor.

Explanation: Although this is something the federal government should not pay for as a direct or indirect cost, it certainly is an appropriate Institutional expense. This event should use the expenditure types: 52310 ALCOHOL BEV UNALW for all alcohol, and 52240 EMP MORALE for the food cost. The expenditure types designated unallowable for reimbursement by the Federal Government in both cases.

Example of a cost unallowable for reimbursement by the sponsor, but allowable for reimbursement by Stanford:

The State of California grant explicitly states no travel outside of the state of California. Professor Smart would like to travel outside the state to present a paper about her research.

Explanation: No matter how great a speaker she is or how interesting her research may be, the expense is unallowable as a direct charge to the sponsor per the award terms and conditions. If Professor Smart does travel, the expense must be charged to a PTA where the travel is Allowable, Allocable and Reasonable. The expenditure type would be: 52410 Domestic Travel Allow.

Terms and Conditions of a Sponsored Project Can Be More Restrictive

UNALLOWABLE costs may also be identified in the specific terms and conditions of a sponsored project. These can be more specific than those outlined in A-21 or the Uniform Guidance.

Example: A sponsor specifies that international travel costs cannot be charged to a particular project. Those costs may NOT be charged to that project, even though Stanford and federal regulation may allow them.

Monitoring Project Expenses within Funding Limitations

It's important for the Research Administrator to monitor the rate of expenditure on a sponsored project because PIs are responsible for the ongoing fiscal management of awarded projects, including regular monitoring against project period budgets. Federal regulations establish the approved project budget as the financial expression of the project, and sponsors may evaluate the project against the budget at any time.

Although sponsors allow some flexibility with respect to re-budgeting, un-obligated balances, and pre-award costs, Stanford and sponsors expect expenditures to be reasonably consistent with the approved project and budget.

Sponsors may question or restrict expenditures that appear inconsistent with the project plan and budget. PIs are obligated to request prior approval when budget and program plan revisions indicate a significant change in scope.

Indicators of a change in scope can include, for example, significant expenditures beyond the amount authorized on the award, or requests for additional funding. PIs are obligated to request prior approval when budget and program plan revisions indicate a significant change in scope. Consult with OSR or your school based management team for additional guidance and for endorsement of the formal request to the sponsor.

For federal grants, advance written approval by the sponsor is required for:

Change in the scope or the objective of the project or program
Change in the PI
Disengage for more than three months or a 25% reduction in time devoted to the project, by the approved PI and/or key personel
Additional federal funding
The transfer, by contract or other means, of a significant part of the research or substantive programmatic effort (i.e. subaward).

Uniform Guidance

The Uniform Guidance recognizes that a PI can be absent from campus but fully engaged in his or her research team by means of Skype, video, computer or other means of communication.

PIs are required to report deviations from budget or project scope or objective, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with this section.

Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
Change in a key person specified in the application or the Federal award.
The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved Project Director or Principal Investigator and key personnel.

Note that number 3 above does not use the term "absence" but "disengagement" from the project. The distinction is a PI/PD or key personnel can be off campus and still engaged in the research, which would not require prior written approval.

The new term "disengagement" in the Uniform Guidance will become part of Stanford Policy prospectively and retrospectively.

Specific to the School of Medicine, evidence of engagement or disengagement from a sponsored project should be documented on Attachment A of the Sabbatical Leave form which must be reviewed and approved by the School Dean's office, and forwarded to the Institutional Official who will review, countersign and uploaded it into the appropriate SeRA record(s).

Example:

The PI is working in New Zealand on coral reef research as part of the statement of work. She is absent from the Stanford Campus but still engaged in the research.

Modifications

During the life of a sponsored project, it may become necessary to modify certain aspects of the original award. Such changes may involve rebudgeting of funds among expense classes or adjusting the length of a project period. Many federal agencies have transferred the authority to approve such changes to awardee institutions. Review the terms and conditions of your award and consult your IO (institutional Official).

Use the OSR Request Form in SeRA to make the following requests

The OSR Request Form allows department administrators to submit requests to the Office of Sponsored Research via the SeRA system for OSR to contact sponsors for notifications, requests and approvals, or changes to Oracle PTAs for sponsored projects.

Benefits of the OSR Request Form:

SeRA records when the request was submitted to OSR; what information was provided; who is working on it; and the status of the request and all requests are searchable
Eliminates emails to one person and delayed response since request are sent to the OSR queue which allows for assignment to the next staff member if staff are out of the office.
Users can see who the request is assigned to and the processing time to date.

When to Use the OSR Request Form

No Cost Extension Request: In the event the proposed work is not able to be completed prior to the award end date and the PI wants to extend the period of performance.

Sponsor Approval for Rebudgeting: When you want to expend funds differently than the sponsor approved budget and the sponsor requires prior approval to do so.

Sponsor Approval for New Subaward: If the PI wants to issue a subaward to an entity not previously approved by the sponsor.

Sponsor Approval for Carry Forward: When the award requires sponsor prior approval for carry forward between budget periods.

Sponsor Approval for Travel: If use of award funds for travel requires the prior approval of the sponsor.

Sponsor Approval for Equipment Purchase: If purchase of equipment requires prior approval of the sponsor.

Sponsor Approval for Changing PI: If current PI will relinquish active direction of the project and the project will continue at Stanford with a substitute PI and prior sponsor approval is required before the change is implemented.

Sponsor Approval for PI Effort Change: If PI will devote substantially less or more time to the project than proposed (as defined by the specific award terms) and prior sponsor approval is required before the change is implemented.

Sponsor Approval for Scope of Work (SOW) Change: If the PI or sponsor requests a change in the Scope of Work or objectives of the project.

Sponsor Approval for Key Personnel Change: If there will be a change in Key Personnel (other than the PI) and prior sponsor approval is required before the change is implemented.

Check Next Funding Increment Status: You would like OSR to check on the status of the next expected funding increment.

Other – Preaward Contract Grant Officer/Contract Grant Associate (CGO/CGA): If the request type does not fall within or is not included in the Select Request pull-down menu.

New Task: You would like OSR to create a new Oracle Task Number under an existing Oracle Award/Project.

Budget Reallocation: You would like OSR to rebudget funds from one Expense Category/Type to another Expense Category/Type within or among Oracle Tasks or reallocate fnds from Research to Fabrication project.

New Cost Sharing Award-Task: You would like OSR to create a new Cost Sharing Award-Task for an existing Project

New Fabrication Project-Task: You would like OSR to create a new Fabrication Project-Task for an existing Award

New Program Income Award: You would like OSR to create a new Program Income Award for an existing Project

Modify Existing PTA Attribute: You would like OSR to change an Attribute of an existing PTA

Make Expenditure Type Chargeable/Non-Chargeable: You would like OSR to make an expenditure type chargeable or non-chargeable in an existing PTA.

Other Postaward (Accountant): If the request type does not fall within or is not included in the Select Request pull-down menu.

How Do I Create a Request using the OSR Request Form?

Monitoring a Subaward

Stanford is responsible for ensuring that sponsor funds, including those provided by Stanford to other entities, are spent in accordance with all applicable laws and regulations. The University is required to monitor its subrecipients as if it were the sponsor. This monitoring requirement places Stanford in much the same position as if it were a federal agency dealing with its own primary recipient.

Principal Investigator & Departmental Responsibilities for Monitoring Subawards

It is the PI’s responsibility to monitor subrecipients so there is reasonable assurance that the subrecipient uses the award for authorized purposes, complies with laws, regulation, and the provisions of the agreement, invoices Stanford for allowable expenses in accordance with the agreement, and achieves its performance goals.

Invoice Review and Signature

The PI must review the subrecipient’s invoices and indicate approval by personally signing each invoice for payment. The following language has been developed and required to be included on each invoice:

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

You can order stamps with the above language printed on it for affixing on an invoice. Email the JP Cooke sales department directly at sales@jpcooke.com and request the stamp ordered by Stanford University Dept. of Sponsored Research on February 7, 2013.

As part of the invoice review, the PI and departmental administrators should verify that the invoice was prepared in accordance with the subaward requirements and that invoiced costs are:

In accordance with the approved budget or permissible rebudgeting
Incurred within the approved period of performance and overall cost limitations
Aligned in terms of cost and type of expense with the scientific progress reported to date
Allowable, allocable, and reasonable

The subrecipient’s invoices should reflect both current period and cumulative expenses to date. The PI and departmental administrators should also verify that the subrecipient is adequately meeting any cost-sharing commitments made for the subaward.

Clarification of Invoiced Charges: In the event the level of detail included on an invoice is not sufficient, or if it appears that some costs may be excessive or understated, the PI or departmental administrator should question the subrecipient's expenditures by requesting further documentation or explanation prior to approving an invoice. If the explanations are not sufficient to render a prudent judgment on the allowability of costs, and the terms of the subaward permit, department grant administrators may request detailed justifications from subrecipient. Department 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. Such inquiries must be done in a timely manner (e.g., within thirty days after receipt of an invoice) so that the subrecipient can be promptly paid for their approved costs.

Examples of detailed justifications that may be requested from subrecipients include: payroll records, copies of paid invoices showing the cost of items purchased, descriptions of services rendered by consultants, including hourly rates, time reports and details of incurred travel charges stating the purpose, airfare, meals, ground transportation, unallowable costs, etc. Copies of all such documentation and the ultimate outcome of the investigation should be retained in the project file.

When there is a concern about the allowability of cost, the administrators can contact OSR for coordination of subsequent actions. OSR staff are available to assist the PI and their departmental staff in resolving any invoice review issues that may arise.

Technical Progress & Compliance

The PI must be in contact with the subrecipient regularly to discuss technical progress, receive and review required reports or deliverables, and verify that the subrecipient maintains current human and animal subjects approval when applicable. The subaward monitoring and compliance obligations of the PI may be shared with department administrators or other Stanford employees; however, in no event may such monitoring and compliance obligations be delegated to a non-Stanford employee.

Quarterly Review & Certification

At quarterly review and certification, the PI certifies the allowability, allocability, reasonableness, and consistency of the subrecipient's expenditures and the related sufficiency of the subrecipient's technical progress under each subaward involved in the research project, as well as expenses incurred directly at Stanford.

Regulations and Assurances

The federal regulations that describe subrecipient monitoring are general, but contain the following core elements of compliance:

Advising subrecipients of all applicable federal laws and regulations, and all appropriate flow-down provisions from the prime agreement
The routine receipt and review of technical performance reports
The routine review of expenses-to-budget
The periodic performance of on-site visits, or regular contact, if necessary
The option to perform "audits" if necessary, review of A-133 audit reports filed by subrecipients, and any audit findings review of corrective actions cited by subrecipients in response to their audit findings
Consideration of sanctions on subrecipients in cases of continued inability or unwillingness to have required audits or to correct non-compliant actions

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.

Enroll in the Subaward Course

Cost Transfers

A cost transfer is an after-the-fact reallocation of costs associated with a transaction from one Project-Task-Award (PTA) to another.

Costs should be charged to the PTA for the benefiting sponsored project when first incurred. However, at times it may be necessary to transfer a cost to a sponsored project subsequent to the initial recording of that cost. Such transfers require careful monitoring for compliance with Stanford University policy, federal regulations and policies, and the federal cost principles that underlie all fiscal activities of sponsored projects.

The cost transfer procedure requires thorough documentation to support the transaction. In addition, the transfer must be timely, complete, and comply with allowability, allocability, and reasonableness requirements.

A cost transfer invites the assumption that the transaction was not handled properly initially. The charge will be scrutinized for allowability and allocability to the benefiting sponsored project. The documentation or justification for moving charges will be scrutinized as well.

Cost transfers that represent corrections of errors should be completed within three months of when the error is discovered, and no later than six general ledger (GL) months after the original expense is posted to an award. Errors found during the required monthly expenditure statement review process should be corrected upon discovery.

For example, expenses for winter quarter (January, February, March) must be certified by the PI by the end of May. If a transaction posted during the January GL month was discovered during the review and certification process, it must be corrected no later than the July month end close.

		1	2	3	4	5	6
GL MONTH	JAN-16	FEB-16	MAR-16	APR-16	MAY-16	JUN-16	JUL-16
	Original* transaction posts in GL month		Qtr ends		Last month to review Winter Quarter expenses w/PI		Any corrections for transaction that posted in JAN-16 must post before this GL month closes

*This applies to the original transaction only. It does not apply to a journal of a previous journal.

Exceptions to time restriction of cost transfers

Exception	Discussion
Transactions necessitated by unforeseen circumstances	These are not considered error corrections. Examples: allocations from Service Centers or Allocation PTAs transfers due to account set-up errors transfers due to new funding comes thru an unexpected mechanisms (e.g., an award comes in with a different prime sponsor than originally proposed or was thought to be a grant at proposal time, but once awarded is a contact)
Transfers between tasks of the same sponsored project	These are not considered error corrections because the expense remains in the same award.
Changes in expenditure types within the same sponsored project	Charges that do not impact changes to capital expenditure types.
Incorrect charges	Charges must be transferred off the non-benefiting sponsored project regardless of age of the expense.
Refunds and unexpected credits	Refunds benefiting a sponsored award must be allowed to post to the award even if it may necessitate a closeout correction.
Transfers onto sponsored PTAs after six months or after award closeout	Late charges are generally not allowed and must be transferred to a cost sharing PTA unless the expense also benefited a non-sponsored award, in which case it can be transferred to the other benefiting non-sponsored account. Only OSR or RFCS may authorize a transfer onto a sponsored PTA after six months with the concurrence of a school level approval.
Clearing an overdraft	At the end of a project to either a Cost Sharing PTA or to an unrestricted PTA depending upon the specific circumstances. See Section F of this policy “Overdrafts”.

Allocations from service centers or clearing accounts, changes caused by account setup errors, situations where new funding comes through an unexpected mechanism, etc. are not considered error corrections.

Effective for transactions with a GL date of January 2017

Large cost transfers that exceed $10K or 10% of the award, and transfers within the first or last 90 days of a project, and transfers that do not meet the timeliness criteria receive additional central review. For the transfer of all non-salary charges subject to the above criteria, a PDF of the general ledger** showing the expenditure(s) requesting to be moved MUST be attached to the cost transfer transaction by the originator. Attaching detailed documentation for these transfers will facilitate their timely review by the Office of Sponsored Research (OSR).

**Acceptable versions of the general ledger include ReportMart3 279, OBI 285 Expenditure Detail Report, OBI 149 - Quarterly Review and Certification, OBI CER Expenditure Balance and Expenditure Details reports, and Expenditure Transactions (PTD) screens of FFIT.

All cost transfers must be supported by documentation that fully explains the error. An explanation merely stating that the transfer was made "to correct an error" or "to transfer to correct project" is not sufficient. The cost transfer documentation for a sponsored project should be reviewed by the PI. The documentation must include a justification.

The justification must explain why you are taking an expense off of one PTA, and why it is appropriate to put it on another PTA. If you are moving the charge to another sponsored project, your explanation must make it clear why the charge is ALLOCABLE to that project, and how the project received a benefit from this expense. The justification should clearly show the following.

Cost transfer documentation must include a justification that clearly shows:

1. How the expense directly benefits the receiving PTA

2. How the expense is allowable on the receiving PTA (e.g., attach documentation of sponsor approval)

3. The allocation methodology used if transferring expenses to multiple PTAs

4. The reason the expense was charged incorrectly to the first PTA

5. That any systematic reasons which might cause this problem to be repeated have been addressed

6. The reason for any delay in the timely processing of the transfer

In addition, large cost transfers that exceed $10K or 10% of the award, and transfers within the first or last 90 days of a project, and transfers that do not meet the timeliness criteria receive additional central review. For the transfer of all non-salary charges subject to the above criteria, a PDF of the general ledger** showing the expenditure(s) requesting to be moved MUST be attached to the cost transfer transaction by the originator. Attaching detailed documentation for these transfers will facilitate their timely review by the Office of Sponsored Research (OSR).

Sponsor Requirements

Sponsors may have more restrictive guidelines on cost transfers; departments should consult the Office of Sponsored Research or Research Financial Compliance & Services (RFCS) when in doubt about the acceptability of a proposed cost transfer.

Tips for Writing the Justification

A good justification will allow anyone reviewing the cost transfer to understand how the expense benefits the receiving PTA. It should be easily understood by anyone reviewing the journal, and provide enough detail to inform approvers and auditors about the action taken. Think, "if I leave, will an auditor be able to understand this two years from now?" it should answer: who, what, where, when, and why.

Who: the person, organization, or department name(s) that caused or played a role in the journal
What: what events or circumstances are causing the journal
When: the month of occurrence or the key date related to the cause
Where: the location of the event or occurrence (if it is significant)
Why: why a change is required

The trick to writing a complete justification is to try to answer all possible questions. It is important to state explicitly how the project which will pay this expense benefits from the transfer. Include a statement like: "The direct benefit to Project XXX of this expense was __". Indicate whether the sponsor approved the transaction. If you wonder if you have included enough information, you probably haven't. Do not use abbreviations or acronyms in a justification. Above all, remember, you cannot transfer expenses to a new PTA just because it has money!

Examples of documentation to include: Allocation methodology, an invoice or packing slip, notes on an expenditure statement, “per PI …”

Sample Wording to Document a Salary Transfer

Charges are being transferred onto this award because the appointment paperwork for Grad Student X was not received in time to allocate her salary correctly. Consequently, this month’s charges for Grad Student X are incorrect.
The efforts of Grad Student X directly benefit the scope of work for Project Y - OR - Grad Student X conducted experiments related to the Project Y statement of work (be specific, but brief)
These salary charges are allowable on this award per the Project Y agreement.
PI Smith has reviewed the charges and assessed the efforts of Grad Student X.
Appointment paperwork is now fully approved, and the Labor Distribution Schedule corrected for Grad Student X so that her salary will now be charged correctly.

Ask OSR, RMG, ERA or School Compliance Officer for help making sure your documentation is adequate.

Compare Justifications

Inadequate Justification:

To allocate chemicals from an expenditure allocation PTA to appropriate project PTA

Better Justification:

Department X expenditure allocation PTA is used to collect all department chemical charges. All charges to sponsored projects were proposed and approved consistent with Stanford and sponsor policy. Documentation, including allocation methodology, is in departmental files.

Explanation:

The inadequate justification does not address the questions of whether or not the chemical charges are allowable and allocable to the PTAs to which they are being charged through the cost transfer. The better justification states that the department is aware of the documentation requirements for these charges, attests that all requirements have been met, and states where the documentation records can be found. The length of a justification is irrelevant. A justification must include the pertinent facts, and easily understood by anyone who may read it now and in the future.

If an error is discovered after the end of the award, a transfer of expense should be made by removing the expense prior to award closeout.

If after the end date of an award an expense is determined to be unallowable to the project (but did benefit the project), the expense must be transferred to a Cost Sharing PTA for accounting purposes, although it cannot be counted towards a Cost Sharing commitment.

Documentation

The documentation of a cost transfer made after a project end date will be closely scrutinized. In addition to including all the necessary element of a cost transfer justification large cost transfers that exceed $10K or 10% of the award, and transfers within the first or last 90 days of a project, and transfers that do not meet the timeliness criteria receive additional central review. For the transfer of all non-salary charges subject to the above criteria, a PDF of the general ledger** showing the expenditure(s) requesting to be moved MUST be attached to the cost transfer transaction by the originator. Attaching detailed documentation for these transfers will facilitate their timely review by the Office of Sponsored Research (OSR).

Examples

These charges are for effort expended before [insert Project Y’s end date] and they are appropriate per the Project Y award agreement.

These charges could not be processed in a timely manner because PI Smith was traveling in Mongolia, and was not available to review and approve the charge.

If a Project Ends In Overdraft

An overdraft exists if after the end date of an award expenses exceed funding.

If the award is in overdraft at the end of the project period, remove the overdraft from the award according to rules outlined in Stanford Policy. Federal regulations state an overdraft is unallowable on any other sponsored project, therefore unless there was an error, the overdraft must be treated like cost sharing. This must be done in a timely manner. Expenses removed as a result of an overdraft should have been incurred during the last 6 months of the project.

Do it in a timely manner
If total overdraft is less than $500, transfer lump sum (net of indirect costs) Expenditure type 56135 (which allows the Cost and Management Analysis group to segregate these costs for purposes of indirect cost calculation)
If the overdraft is greater than $500 dollars the overdraft is transferred to a cost sharing PTA.
Explain reason for the transfer. For example: Charges are legitimate project expenses, but funds were inadequate. This is accounted for in the same manner as cost sharing.

S ee Research Policy Handbook 15.3 , Cost Sharing Section 6 - Overdrafts

Use journals to transfer costs.

Use New Journals to transfer non-salary or student aid expenses.
Use Labor Distribution Adjustments to transfer salary expenses.
Use Allocation Journals to distribute costs based on proportional benefit to a project. Allocation Journals are used when it is difficult to determine in advance how much to charge each account for a shared supply or service. Allocations are often used to distribute costs from Service Centers, Auxiliaries, or expenditure allocation service types. Often allocations are repetitive, or are required on a repetitive basis. To process an allocation journal, you must comply with Administrative Guide Memos 3.2.2 and 3.2.3 and have written approval on file from those with signature authority over the PTAs you will charge. You must be able to certify that:

The allocation has been processed in accordance with policy
The cost is an appropriate charge to the PTAs sharing the expense
The expenditure PTAs actually benefited from the cost of the goods and services
The transaction is documented according to policy

Keep in mind: Federal regulations require an expense solely advance the work under the sponsored agreement, or benefit both the project and other work in proportions that can be approximated through reasonable methods.

A cost that benefits more than one project should be allocated at the time of the expenditure. At no time should a sponsored project be used as a holding account for costs that will subsequently be transferred elsewhere. Clearing accounts are appropriate for certain situations

See Administrative Guide Memo 3.2.3: Allocations and Offsets

Use the Cost Transfer Check List to help you write the documentation and to facilitate a timely review by OSR.

Spending Before or After the Start Date of Your Award

Federal granting agencies have delegated to Stanford the ability to initiate:

Pre-Award Costs

It is possible to spend before the anticipated award start date if the sponsor authorizes it in writing. Check the terms and conditions of the specific award for restrictions on pre-award spending.

Most federal sponsors allow preaward spending for grants 90 calendar days prior to the anticipated award start date.
Other sponsors limit the dollar amount or do not allow pre-award spending.
It is rare for contracts to include language allowing pre-award spending. Special language must be negotiated.

If the sponsor authorizes pre-award spending, you can open an early PTA (Project Task Award). If the research involves human or animal subjects or stem cells, a protocol must be submitted before an early PTA can be opened. Although you can receive an early PTA, certification is required that protocols have been filed for review and that no expenses involving those activities will be incurred until the final protocol approval is granted.

Learn how to open an early account by view Sponsored PTA Manager Early Account User Guide

The sponsor is not obligated to fund the pre-award costs if the project is not funded, and the sponsor's authorization of pre-award spending does not guarantee that the PI will receive the award. If the award does not materialize, the PI must cover for the costs from his or her unrestricted funds.

In addition, if the start date of the project is delayed beyond the 90 day period, the award will not cover the costs if they were incurred outside the 90 day period.

Preaward Spending Risk Example 1: How the Guarantee Account Works

An award is expected in two months and a graduate student is working in this area now and needs to be funded. What should you do? If the sponsor authorized preaward spending, request an early PTA. This will require the PI to identify an unrestricted PTA to guarantee funding the expenses, in case the sponsored project is not awarded.

Do not charge the student to another sponsored project, and then transfer costs when the benefiting award is accepted.

The student’s effort should not be charged to a project which does not benefit from that effort. Such a charge is both unallowable and unallocable, and cannot be approved, even if you intend to transfer the charges later.

Pre-award Spending Risk Example 2: Delayed Project Start Date

Anticipated award start date of March 1 is ascertained through communication with the sponsor.

The sponsor authorized pre-award spending within 90 days prior to award start date, that would be January 1. You can open an early PTA, and begin spending.

The sponsor then delays the start date to April 1. Now the pre-award spending the PI incurred in the month of January is outside the 90 day limit. The PI is obligated to cover those costs with unrestricted funds.

No Cost Extension

A no-cost extension (NCX) extends the project period beyond the original project end date. As the phrase “no cost” suggests, there is no additional funding. It allows a Principal Investigator (PI) additional time to complete the scope of work of her/his project without additional funding. The fact that funds remain at the expiration of the grant is not, in itself, sufficient justification for an extension without additional funds.

A no-cost extension may be requested by the PI when all three of the following conditions are met:

The end of the project period is approaching, AND
There is a programmatic need to continue the research, AND
There are sufficient funds remaining to cover the extended effort

Many federal agencies allow for Stanford to approve a one-time no cost extension for a period of up to 12 months beyond the original expiration date shown in the NoA (Notice of Award) if all the following criteria are met.

No term of the award specifically prohibits the extension
Funds are left in the project budget
There is a programmatic need
The project's originally approved scope will not change

Contracts typically require a formal request to the sponsors contracting officer and a subsequent modification to the contract. Review the terms and conditions for guidance.

Use the OSR Request Form to request a NCX

In the School of Medicine use the RMG Form Request for a NCX

How to Submit Requests to OSR About Your Award

Benefits of the OSR Request Form:

SeRA records when the request was submitted to OSR; what information was provided; who is working on it; and the status of the request and all requests are searchable
Eliminates emails to one person and delayed response since request are sent to the OSR queue which allows for assignment to the next staff member if staff are out of the office.
Users can see who the request is assigned to and the processing time to date.