Project Management

Direct Cost vs F&A Chart This handy guide relates specific items of costs with Penn Object Codes

Costs typically considered unallowable on Federal Grants as a Direct or Indirect Cost: (Uniform Guidance

  • Advertising for general promotion of the University, including printed materials, promotional items, memorabilia, gifts, and souvenirs
  • Advertising for recruitment purposes that includes color or is excessive in size
  • Alcoholic beverages
  • Alumni or fundraising activities
  • Antiques
  • Bad debt write-offs
  • Charitable Contributions
  • Commencement expenses
  • Decorative objects for private offices
  • Entertainment
  • Fine/original art
  • Fines and penalties
  • First-class/business-class air travel differentials
  • Flowers
  • Gifts, prizes, and awards
  • Goods or services for personal use
  • Lobbying
  • Memberships in airline travel clubs
  • Memberships in civic, social, community organizations or country clubs
  • Faculty and exempt staff salary in excess of base rates paid by the institution.
  • Selling or marketing products or services of the University.
  • Social events

Payroll is often the largest budget category of expense on an award. Keeping this in mind, it is critical that payroll distributions be set up immediately and accurately when an award is received. Setting up distributions properly at the outset can alleviate the need to make burdensome reallocations later. Remember: Payroll reallocations are sometimes the result of errors in charging an award. As such, any transfers must be completed prior to the certification of effort during Effort Reporting.

  • Upon receipt of the Account Information Sheet (AIS), confirm the personnel and effort to be charged to the project with the Principal Investigator. Remember that prior approval is required for any reductions 25% or greater for key personnel identified in the Notice of Award
  • Always set the Distribution Stop Date equal to the Account End Date or the anticipated duration of effort on the project.
    • Often administrators incorrectly allow Distribution Stop Dates to go to just the end of a fiscal year. A 06/30/XX Distribution Stop Date is only going to accurately reflect encumbrances if the Contract End Date is less than or equal to 06/30/XX. Salary Encumbrances are calculated through the Budget End Date or Distribution Stop Date (whichever is earlier) only, and not beyond.
  • Entering the distribution stop date equal to the account end date allows for proper encumbrance of salary and more accurate reporting to investigators on their available fund balances.
  • Related Links:

  • Competitive Bids Financial Policy #2308
    • Required on aggregate purchases > $10,000 unless purchase is with a University Contract Supplier or with a supplier participating in the Penn Marketplace.
  • Fly America Act
    • U.S. Carrier must be used when travel funded by the Federal Government (with exceptions regarding non-availability and layovers).
  • Subcontract Management
    • Authorization from Research Services in the form of a fully executed subcontract must be received prior to preparing requisition. For instructions on requesting an outgoing subaward through the Research Inventory System(RIS) and to establish a subcontract PO. Also see instructions to subcontract vendor and how to manage P.O holds in BEN.
    • If the initial year of the subcontract exceeds $25,000 a two-line requisition needs to be done (obj. code 5332, 5333) to ensure proper F&A gets charged. The first $25,000 is entered in object code 5332 and the remaining amount is entered in object code 5333.

University Policy 2134 provides a basic understanding of what documentation is required indicating approval for expenses charged against sponsored projects. As goods and/or services are expensed against sponsored program awards, supporting documentation must be kept on file. The procedure for reconciliation of expenditures is a three-step process:

  1. Verification of the ordering and receipt documentation
  2. Matching of documentation to monthly detail report
  3. Review and approval of the Principal Investigator

At least monthly, the business administrator or grants administrator should meet with their principal investigators (PIs) and review their entire research portfolios. The PIs should be provided with detailed reports on all of their sponsored program awards.

Cost transfers are defined as the transfer of costs to sponsored projects where the costs initially had been incorrectly charged to another account. Any cost transfers that occur need to be properly justified and documented.

Cost transfers should not be confused with instances where original costs need to be booked to grants and do not have an original transaction/batch ID.  Such bookings are not considered cost transfers and are done under BEN Responsibility Journal Entry-General (see guide)

  • Category: 01 – Intra Gds/Svs - use for intramural services, service center activity, and transfers between centers.
  • Category: 07 – G & C Adj - use for cost sharing, grant closeouts, and ORS adjustments.
  • Category: 17 – UPHS Gds/Svs -use for original billing of UPHS Goods/Services only
  • Category: 18 – UPHS Payroll - use to reimburse UPHS for academic/research done for UPENN by UPHS employees paid on UPHS payroll (object codes 5140 and 5192).

Note: Category 02 – Adj Prev Tx is only for non-grant funds and should NEVER be used if a grant fund is involved. 


University Financial Policy Number 2113 Cost Transfers and Payroll Reallocations states "Cost transfers must be prepared and submitted within 90 days from month end in which the transaction appears on the fund." Failure to adhere to this policy may result in the University disallowing the transfer which could result in a write-off to the administering department.

To obtain access to Journal Entry-G&C Cost Transfers in BEN Financials administrators must take mandatory online training. To access the training course:

  • Go to Knowledge Link at http://knowledgelink.upenn.edu (Now in Workday Learning)
  • Authenticate with your PennKey and PennKey password
  • Type ‘Cost Transfers’ in the search box beneath the menu
  • Locate the course titled Journal Entry - Grant & Contract Cost Transfers for Expense - FTD
  • Click on the icon under the Enrollment column
  • Click on [Enroll]
  • Click on [Start] to begin the course 

All Grant and Contract Cost Transfers are processed within the Journal Entry – G&C Cost Transfers responsibility and will fall under one of three categories:

  • Category 14 ADJUST is for adjustments under $1K and within 90 days of the month end of the original transaction date. Also can be used for certain adjustments greater than $1K and/or over 90 days that are not defined as cost transfers Category 14 journals will post nightly
  • Category 15 G&C UN90 is for cost transfers that are within 90 days of the month end of the original transaction date Category 15 journals will post nightly

  • Category 16 G&C OV90 is for cost transfers that exceed 90 days of the month end of the original transaction date Category 16 journals require ORS review and approval prior to posting

View the Cost Share Decision Tree to determine the appropriate G&C Journal Category 14,15 or 16

The cost transfer justification form should be used in conjunction with the BEN categories and include supporting documentation for the transfer that both provides an explanation for the error and the direct benefit to the grant fund being charged.  It is mandatory to upload for Category 16.  It is considered a best practice to upload it for Category 15.  If it is not uploaded the department must maintain documentation in the event of an audit. 

View how to upload attachments to your journal entry.

Departments should self monitor their own cost transfers periodically utilizing  the Webi report Cost transfers- Time Range-Org audit. It can be utilized to monitor cost transfers performed in your department to/from grants by matching batch ID on your Org (example:%4345%) when prompted. Periodic reviews should be conducted to ensure you have proper documentation to justify the transfer and have provided the direct benefit to the grant being charged and an explanation as to why the transfer was needed.

Cost Sharing or matching means that the sponsor does not fund a specific portion of the project or program costs.

University Financial Policy Number 2119 Cost Sharing/Matching Policy provides full details, which are briefly summarized below:

  • If the sponsor has mandated that the University fund a portion of the total project costs or if the University voluntarily commits to fund a portion of the total project costs it is necessary to submit a completed cost share form at the time a proposal is submitted for School and Institutional review.
    • The cost sharing requirement should also be clearly indicated on the Proposal Transmittal and Approval Form.
    • Should the cost sharing requirement change at the time of the award, the cost share form needs to be resubmitted to Research Services.
    • The cost share form requests information about the specific costs to be shared/matched as well as the funding source. (Note: Federal funds can not be used to fulfill a cost share/match requirement unless authorized by statute.)
  • In cases where specific costs (except unrecovered F&A, in-kind, tuition or sabbatical costs) are identified as cost sharing, a separate '5' ledger fund will be established to account for those costs.
    • No PBIL or PBUD values are assigned to the separate fund.
    • Research Services does assign a value to special object code PTCS which represents the total cost sharing requirement.
    • The administering department funds the mandatory or voluntarily committed cost sharing on the separate fund by booking a credit to object code 4822 Cost Sharing and debiting the funding source. The administering department can do this periodically as expenditures get booked to the cost share fund.
  • When a project provides voluntary uncommitted cost sharing (typically when the project is overspent and the overage needs to be written off) the department can credit the grant fund object code 4827 for the Direct Cost portion of the overdraft.  Any associated F&A on the Direct Cost overage write-off will also be credited.

University Financial Policy Number 2121 Accounting for Program Income provides full details, which are briefly summarized below:

  • Program income is gross income earned that is directly generated by a sponsored activity or earned as a result of the sponsored activity. Federal regulations (Uniform Guidance section 200.307) provide three alternatives for accounting for program income:
    • Additive method- income is added to the funds committed to the project to further the objectives of the award
    • Matching method- income is used to finance the non-federal share of the project
    • Deductive method- income is used and reduces the federal share of the project
    Program income earned on non-federal awards must be accounted for according to the terms and conditions of the award.
  • Other Considerations:
    • Program Income from external sources are deposited to object code 4620 in order to distinguish it as a separate type of funding/revenue source. Program Income from internal sources are recorded between departments to object code 5347 because it is both internal revenue and expense which offset each other.
    • The Additive method requires a separate "5" ledger fund if the anticipated program income exceeds $5,000. Additional project costs can be booked to the separate "5" ledger fund (not to exceed the amount of program income). The administering department can identify specific costs required to generate the gross program income if net program income needs to be reported to the sponsor.
    • The Matching or Deductive Method does not require a separate "5" ledger fund to be established (i.e. the program income gets booked to either object code 4620/5347 on the grant fund as described above for external/internal sources).
    • Any program income booked under the Deductive Method requires Research Services to reduce PBIL by the amount of program income booked to the fund.

Most projects (all Federal and Federal Flow through projects) will require an annual reporting of progress. The Office of Research Support Services Post Award staff will serve as Institutional Signing Officials. Progress Reports require the routing of a noncompeting continuation Child Record in Proposal Development (instructions). Review the PennERA Routing and Approval Process. Note: Final or Interim RPPR's are considered closeout documents and do not require a Child Record.

Requirements/attachments needed for Child Record progress report submissions: (Note: it is preferable to upload all attachments to Supporting Docs as a pdf as they will all be combined into one Assembled Doc).  Any signature pages needed can be uploaded to Internal Docs to emphasize a signature is needed

  • Unless a progress report can be done S2S, almost all Child progress report submissions do not require entering the detailed budget into PennERA (i.e. only requirement is to enter Total Direct Costs and Total F&A)
  • Any IRB or IACUC protocols in PennERA should reflect current approvals. 
  • Signed consortium progress reports from subrecipient sites if applicable.
  • Document original, unflattened e-signed Other Support forms to be submitted should also be uploaded to the Child Record -Supporting Documents tab. All Other Support submitted must be flattened and combined into one document in the RPPR attachment.
  •  If Penn is a flow through recipient we are expected to prepare the PHS 2590 forms for submission to the Prime recipient and the forms should be uploaded to the Child Record for review and/or signature.
  • For RPPR’s there is no need to include a draft copy of the RPPR as the RPPR is reviewable in the Commons.  The Final submission will be uploaded to PennERA by ORSS.

Progress Reports

NIH requires grantees to submit Research Performance Progress Reports (RPPR) through the eRA Commons at least annually as part of the non-competing continuation award process. The progress report must be approved by NIH to non-competitively fund each budget period within an approved project period.  If your grant is awarded under SNAP (most typically R's,K's), your annual progress report will be due 45 prior to the start of the next budget period.  If your project isn't covered under SNAP (most typically P's,U's, and T's) your annual progress report will be due 60 days prior to the start of the next budget period.  NRSA T's may be due even as much as 6 months prior to the start of your next budget period.  It is always important to check the details on your Notice of Award (NOA).

The RPPR asks grantees about accomplishments towards the goal of the project, plans for the next year of the project, manuscripts and publications produced, personnel who have worked on the project, changes to level of effort of key personnel on the project, actual or planned challenges or delays in the projects and plans for resolving them, significant changes regarding human or animal subjects, inclusion enrollment reports for clinical studies, and more.

The PI should initiate the RPPR within the NIH Commons.  A PI can delegate access to an administrator with a ASST role to also initiate and edit the RPPR.  To ensure annual RPPR's have been reviewed by the Business Administrator prior to final review the following routing history should be evident:

PI routes to BA (select from AO list). BA routes to ORSS Signing Official.

Challenges often encountered by PI's involve noncompliant publications with the Public Access Policy as well as navigating the Human Subjects System.  Investigators should utilize helpful links below.

View a Sample RPPR

Useful Links

Principal Investigators should always note special terms and conditions as well as any budgetary constraints when the project is awarded.  Changes in both project and budget may require prior approval and it is important to know when it is required.

For research grants incorporating standard federal Research Terms and Conditions, many federal agencies have delegated authority to the Institution. An outline of the requirements for rebudgeting and other prior approvals for these federal sponsors can be found in the  Federal-wide Research Terms and Conditions (RTC).   The prior approval matrix lists the federal agencies in the columns and the rows indicate the changes and whether prior approval is required or can be waived.  A change in project scope, PI, or PI absence greater than or equal to 3 months or 25% or more reduction in effort will always require prior approval.  Rebudgeting of expense categories is generally pretty flexible.

NIH addresses what actions require prior approval in its Grants Policy Statement section 8.1.2. Here NIH also lays out actions that might be considered a change in scope 8.1.2.5 as well as addressing 25% or greater reductions in effort for the PI/PD/Senior/Key Personnel named in the Notice of Award (NOA) 8.1.2.6. 

If an NIH Grant does not have automatic carryover authority (see 8.1.1.1), it can be requested to carryover an unobligated balance at the end of a budget period if the need can be justified.  Requests are submitted after the annual Federal Financial Report has been accepted.  The request should include the amount needed, an explanation of why the funds weren't spent, a detailed budget as to how the funds will be spent, and a scientific justification.  See more details about how to submit via NIH Commons.

Federal cooperative agreements and contracts may contain terms requiring prior approval for rebudgeting. Individual awards should always be reviewed for unusual terms.

Industry, foundation and other non-federal sponsors have various policies for rebudgeting. Refer to the sponsor’s award for specific guidance. When the agreement is silent, PIs should use their best judgement in rebudgeting funds as necessary to meet the requirements of the project.

 

NIH Commons Prior Approval Module

Work with your ORS Pre-Award contact to submit these types of Requests

  • No Cost Extension Requests
  • Carryover Request (requires 3 pdf attachments: Explanation of Unobligated Balance, Detailed Budget, Scientific Justification)
  • Change of PD/PI request

 

 

Useful Links

NIH Standard Terms of Award (GPS section 8.1.1)

Federal-wide Research Terms and Conditions Prior Approval Matrix

PSOM Advance Account Process

Quick Cheat Sheet

For New Awards

If the PI/Dept wants to commence spending and the sponsor allows for Pre-Award spending a department should forward to ORSS a signed Advance Account Request (AAR) form (including the 26 digit account to charge in the event the award doesn’t materialize), make note that the PennERA record has a "Pending" proposal status in Proposal Tracking and is FCOI PHS-FITS compliant (when applicable)(note documentation of compliance is uploaded to the PennERA record) and some sort of proof that there is a high likelihood that the award will be made.  Examples of proof include:

  • An email or letter from the sponsor.
  • For NIH grants - a screenshot from the Commons that Just in Time (JIT) information is being requested.
  • For subcontracts (originating sponsor is NIH) - A screenshot from RePorter that the award has been made to the Prime institution.
  • For Clinical Trials – contact CTCU/OCR Finance.  Generally CT’s are not set up as advance accounts except in unusual circumstances.  Funds are created/awarded when the agreement is executed with an award of $1. Invoice copies sent to ORS increase the Award.

For Noncompeting budget years requiring a new fund #

ORSS will generate an advance account if the progress report has been submitted and the project is compliant with the FCOI policy as confirmed in the PHS- FITS application (when applicable).  There is no need for a form with departmental signatures. ORSS will not create advance accounts for continuing budget periods without a progress report and has agreed with ORS that the status in PennERA must be “Future Pending”. The account will be created within the 2 weeks prior to the start of the next budget period.  This allows time for the physical progress report to be receipted in PennERA and reduces problems that might result from creating the fund too early (waywards,etc). If it can be demonstrated that the sponsor does not require a progress report to release the next year’s award, an advance account request should be filled out explaining that a progress report isn’t required by the sponsor and that an agreement/check is forthcoming. Federal Flow thru subcontracts require progress reports so the Prime Awardee can report to sponsor.

Length of Advance Accounts

Advance Accounts will be set up for a period of 3 months for new projects at the fully expected award amount.  A Business Administrator can request to extend the advance account for an additional 3 months by emailing their ORSS contact and providing an update on the status from the sponsor as to when it is expected that the award will be finalized.  Noncompeting year advance accounts will be set up for the entire expected budget period/full $ amount.  Departments bear the entire risk of the advance account not materializing so they should be monitored closely.  

Account Continuation Requests (ACR)

ACR forms are not used to extend an advance account (see above).  They are used to request an extension of the Account End Date when it is anticipated that the sponsor will allow the project to be extended (for another noncompeting year with automatic carryover keeping the same fund # or for a final year No Cost Extension).  You should include an email that the sponsor intends to allow for a No Cost Extension when applicable.  An existing contract may still require a fully executed contract amendment to extend the end dates.   Progress Reports and FCOI PHS-FITS compliance is still necessary for a noncompeting year Account Continuation Request.

How can I identify my advance accounts?

The Business Objects ORG Summary report has tabs which identify both Advance Accounts and funds operating under an Account Continuation based on Fund Parents within the Fund Attributes.  Advance Accounts showing a PBIL probably have been awarded and may be appearing on the list due to a failure of the Fund Parent not being updated when awarded.  You can alert Research Services to update the Fund Parent if it should not be on the report tabs.