Sponsored Program Basics

Grants

Grants are made to the University on behalf of faculty to perform a specific project. The sponsor generally supports the project as outlined in a proposal. Grant characteristics include:

  • Project usually has stated goals and objectives
  • The sponsor has expectations about how the funds will be spent
  • Grant deliverables may include formal project reports
  • A financial report is required

Cooperative Agreements

Cooperative Agreements are agreements in which the Federal Government provides funding or a thing of value authorized by public statute and the government plays a substantial role.

A cooperative agreement is a form of assistance.  It reflects a relationship between the US Government and a recipient.  Cooperative Agreements are used when the government's purpose is to assist the intermediary in providing goods or services to the authorized recipient rather than to acquire an intermediary's services, which may ultimately be delivered to a recipient. 

Contracts

Contracts are the most formal type of award made to the University.  Under a contract, the sponsor supports clearly defined activities. Contract characteristics include:

  • Specific deliverables are stipulated
  • Project performance is monitored by the sponsor
  • Technical reports are required
  • Detailed financial reports are required

All of the above-sponsored agreements require an institutionally approved proposal entered into PennERA. Once awarded, financial activity is tracked in "5" ledgers.

Gifts and Endowments

Gifts and Endowments to the University support broad activities. Three general features of gifts include:

  • No deliverables are required from the activities supported
  • No formal technical reports are required
  • No formal financial reports are required

Gift

  • A gift is a voluntary transfer of cash, securities or property from a donor to the University.
  • Gifts are accounted for in "6" ledgers and can be either in the form of restricted or unrestricted.

Endowment

  • An endowment is a "permanent fund of property or money bestowed upon an institution or a person, the income of which is used to serve the specific purpose for which it was intended."
  • Endowments are accounted for in "4" ledgers and can be in the form of a "true" endowment which is set up in a permanently restricted fund or in the form of a “term” endowment which is set up in a temporarily restricted fund.Gifts are accounted for in "6" ledgers and can be either in the form of restricted or unrestricted

Fee for Service Agreement

A Fee for Service Agreement may be used when a third party is contracting to use Penn facilities. This may include Penn personnel performing the service on behalf of the third party so long as there is:

  •  NO expectation of publication
  •  NO expectation of new intellectual property.
  • Fee for service agreements may sometimes be called “work for hire.”

These agreements generally require an institutional signature and are entered into the Research Inventory System (RIS)

If you have questions or concerns about a Fee for Service Agreement, please send an email to ri_mta_help@lists.upenn.edu.

Other Non-Financial Agreements

There are several types of ancillary non-financial agreements related to sponsored programs. These agreements generally require an institutional signature and are entered into the Research Inventory System (RIS).  They include:

  • Material Transfer Agreements (MTAs) are used to govern the sharing of research materials between parties
  • Data Use Agreements (DUAs) are used to govern the use of data shared between parties.
  • Nondisclosure or Confidentiality Agreements (NDAs/CDAs) are used to govern the sharing of proprietary or confidential information between parties.
  • Collaborative Research Agreements are used to govern collaborations between two or more entities where each entity is providing its own resources to the project.

For guidance as to which office will handle your agreement and how it should be entered please refer to the Research Agreements Decision Tree

Funding opportunities arise through many formal and informal means.

Generally, sponsored applications or proposals are:

Solicited

  • Program Announcements (PAs) – No specific resources are set aside at the agency for the PA, but an area of research interest in a general discipline or subdiscipline is described. NIH Guide: Program Announcements
  • Request for Applications/Proposals (RFAs/RFPs) – Specific resources have been allocated at the agency or sponsor for a given objective, and a public request has been issued with directions for proposers  NIH Guide: Requests for Applications
  • Request for Quote (RFQ) – A standard request for price quotations from competing procurement sources
  • Informal Requests – non-federal sponsors

Unsolicited

An open request for applications with general submission guidelines

  • Examples – Investigator-initiated proposals to the NSF; R01 applications to NIH Parent Announcements (for unsolicited or investigator-initiated applications)

Limited Applications

Some requests for proposals limit the number of applications that may be submitted from the Institution. These cases are coordinated through the Office of the Vice Provost for Research (OVPR).  All eligible schools in the University are permitted to submit one candidate for the final selection process, overseen by the OVPR.  Connie Weinstein, Program Coordinator, Office of the Executive Vice Dean and Chief Scientific Officer, coordinates the administrative process for the PSOM Limited Applications Committee, which is Chaired by Jon Lindstrom, PhD. PSOM applications will be forwarded to the standing PSOM Limited Applications Committee, and after their review/meeting, the PSOM nominee will be notified and his or her application will then be forwarded to OVPR for the final selection process.  (Those applicants not selected are also notified.)

How to search for specific funding opportunities and have them delivered to your email address:

NIH Guide: Search Funding Opportunities and Notices (Can subscribe to email updates regarding search criteria)

Funding Opportunities - SPIN (Request Access)

SPIN is part of the SPIN Plus system, a comprehensive service that provides authorized investigators with the most current information on available funding opportunities (both national and international) for projects. SPIN Plus is not just limited to scientific opportunities; there are listings for other disciplines including education and social work among others. SPIN Plus consists of three modules:

  • SPIN (Sponsored Programs Information Network) -- An up-to-date listing of funding opportunities from national and international governmental and private funding sources.

  • GENIUS (Global Expertise Network for Industry, Universities and Scholars) --A searchable expertise profile system that contains profiles and/or curriculum vitae of investigators who choose to make their profiles public (the default is private). These profiles can be used by SMARTS and also will be used during later phases of PennERA (Protocol and Proposal Development).

  • SMARTS (SPIN Matching and Research Transmittal Service) --A system that matches GENIUS profiles with the SPIN funding opportunities and automatically delivers daily updates via e-mail.

Trialect

Trialect is an online platform where physicians, scientists, and other health professionals access career development opportunities free of cost. Trialect partners with hundreds of medical schools and non-profit/pharma to provide short-term traineeships/fellowships and grants, respectively to health professionals.

Other Useful Links

Overview

A significant majority of PSOM's sponsored funding comes from the federal government (primarily the NIH or flow through) . As steward of the taxpayer’s money, the government has issued principles for determining costs allocable to research and administrative regulations to augment these principles.

On December 26, 2013 the Office of Management and Budget (OMB) released its final rule of “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (2 CFR Chapters I, II, Part 200, et al), and later provided interim updates.

This guidance to federal agencies consolidates and replaces eight OMB Circulars such as the A-110 (Administrative requirements), A-21 (Cost principles), and A-133 (Audit requirements). The Uniform Guidance (UG) applies to all new federal awards issued on or after December 26, 2014. Modifications adding new funding to awards issued prior to that date may also include a clause updating the terms of the award to fall under UG.

Federal agencies (NIH, NSF, Dept of Energy, etc) have each developed their own agency-specific implementation plans for the Uniform Guidance. The plans for some agencies adopt the Uniform Guidance in its entirety. Other agencies list specific exceptions. It is necessary to review the Uniform Guidance, the sponsoring agency’s implementation plan and the award terms to determine what rules will apply to any new federal funding.   

Note that Federal-wide Research Terms and Conditions (RTC), including waiver of prior approvals and other requirements, have now been finalized.

OMB Uniform Guidance: 2 CFR Chapters I, II, Part 200  (PDF, HTML)

Navigating the Uniform Guidance

Information can be found more easily by understanding that the Uniform Guidance is broken down into Subparts. The preamble also provides a useful framework and discussion of how certain guidelines were ultimately determined.

Preamble – Major Policy Reforms
Subpart A – Acronyms and Definitions
Subpart B – General Provisions
Subpart C – Pre Award Requirements
Subpart D – Post Award Requirements
Subpart E – Cost Principles
Subpart F – Audit Requirements

Two types of costs are associated with sponsored projects: Direct Costs and Facilities and Administrative (indirect) Costs.

Direct Costs

Direct costs can be identified with a particular sponsored project or can be assigned directly to such activities relatively easily with a high degree of accuracy. Examples include:

  • Salary of a researcher (including benefits)
  • Salary of a technical staff member (including benefits)
  • Laboratory supplies, chemicals, and glassware purchased for a project
  • Travel to a conference to present results of the project

Facilities and Administrative (F&A) costs

Facilities and Administrative (F&A) Costs (also called indirect or overhead costs) are incurred for common or joint objectives. Therefore, they cannot be identified readily with a particular sponsored project. Examples include:

  • Building utility or maintenance costs
  • Salary of a departmental administrator
  • Library costs

Total Costs of a Sponsored Project

Generally, the cost of a sponsored project is the sum of the allowable direct costs plus the allocable portion of the allowable F&A costs.

The nature of the cost is not the determining factor in distinguishing Direct from F&A costs; it is whether or not the cost can be identified with a particular sponsored project.

Factors That Affect Allowability of Costs – Four Cost Principles

All costs charged to sponsored projects must meet the following cost principles:

  • Allowable – permissible according to the terms and conditions of the award
  • Allocable – must provide a “benefit” to the project
  • Reasonable – the “prudent person” test – Would a prudent person purchase the item at this cost? The cost is necessary for the performance of the activity
  • Consistent – the cost is consistently treated and is consistent with established Institute policies and practices
  • Adequately documented  – in accordance with Institute policies and procedures

F&A refers to two broad categories of indirect costs: facilities and administrative. Each category is made up of subcategories, or “cost pools.”

  • Facilities includes the depreciation of buildings and equipment, interest on debt associated with capital assets, operations and maintenance of physical plant, and library expenses
  • Administrative includes general administration and other general expenses of the Institute, departmental administration, sponsored projects administration, student administration and services, and other types of indirect costs not listed under Facilities

F&A costs are incurred for the benefit of the Institution’s three primary functions, or direct cost objectives:

  • Instruction and departmental research
  • Organized research
  • Other institutional activities 

Since the benefit associated with each function cannot be precisely measured, the costs are assigned or allocated according to methods prescribed in federal regulations, primarily the "Electronic Code of Federal Regulations (e-CFR) Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, or “Uniform Guidance.” as described in “Subpart E-Cost Principles.”

The allocation of F&A pools to direct cost objectives is based on actual expenditure data and statistics such as:

  • Expenditure dollars
  • Square footage of space occupied and population—the number of faculty, students, and staff
  • Salaries and wages

The full cost of an instructional activity or a research project is the sum of the direct cost that can be specifically identified to the project plus the associated F&A cost. Although F&A cannot be directly assigned, these costs are incurred for infrastructure and administrative support services that are essential to the operation of the Institute and its programs. For example, teaching or conducting sponsored research would be impossible without incurring costs for buildings, equipment, utilities, maintenance, libraries, and administrative services. 

Objective: To the extent that F&A costs benefit externally sponsored research activities, these costs should be reimbursed by the sponsor along with the direct project costs. 

Methodology: Reimbursement for F&A costs is accomplished through the use of a rate that reflects the average of all F&A costs associated with sponsored research programs.

  • This rate is based on historical cost data and other pertinent factors, such as new construction or changes in federal regulations, and is subject to audit and negotiation with the federal government.  Penn negotiates its rate with it's cognizant agency (DHHS Department of Health and Human Services) (see current rate agreement)
  • The F&A rate for sponsored research is the total allowable indirect (F&A) cost divided by modified total direct cost (MTDC) 
  • According to OMB Uniform Guidance Subpart E, allowable indirect costs include expenditures for functions that provide a benefit to research, and exclude expenditures that have no benefit to research or that are expressly unallowable for reimbursement purposes
  • Modified Total Direct Cost (MTDC) consists of total direct costs less certain categories of exclusions (or modifiers) as specified in OMB Uniform Guidance Subpart E
    • Expenditures for modifiers that are charged to sponsored agreements are excluded from the calculation of the F&A rate, and are not subject to application of the F&A rate as these expenditures are considered non-overhead bearing 
    • Per OMB Uniform Guidance, Subpart E, standard modifiers include expenditures for:
      • Equipment
      • Capital expenditures
      • Tuition remission
      • Renovation costs when included in capital expenditures
      • Rental of space
      • Scholarships and fellowships
      • The subcontract portion in excess of $25,000

If you have an interest in grant funding basics, ORSS has put together a web-based training presentation here