- Budget Revisions
- Receipt of Award
- Project Administration
- Contracting Authority
- Establishing a Project Account
- Cost Accounting Standards
- Direct Costs
- Cost Transfers
- Grant and Contract Close-Out Procedures
- Final Technical Report
The care and feeding of your award
If all has gone well, you've been notified that your proposal has been approved and your project will be funded. Congratulations. Now what do you do? This chapter explains the various aspects of project administration. Proper administration of contracts and awards is crucial; it ensures that funds are properly spent, personnel and subcontract issues are correctly handled, and required financial and technical reports are submitted on time to the funding agency. This means that your grant or contract will progress smoothly and that funding agencies will be happy (and we all want happy funding sources).
Receipt of Award
Award documents generally are received by the Fiscal Specialist in the CAHE Pre-Award Office (GT 238). Sometimes, though, they are received by the Principal Investigator. It is important that the CAHE Pre-Award Office receives the original award document; the Fiscal Specialist will process the documents.
Formal awards are entered into by the New Mexico State University Board of Regents (see Contracting Authority, below). PIs and the University share responsibility in accepting funds and carrying out the activity for which the funds are awarded. The faculty member designated as the project PI has the responsibility to act as an agent for the University in discharging obligations associated with an award.
Project administration may be divided into two categories: technical and fiscal. Responsibility for these aspects of a project lies with the PI, the Department Head, and the Directors of the AES and CES. If the technical quality of a project is not acceptable to the funding agency, the PI and department are responsible for resolving the difficulty as promptly as possible. It also is the responsibility of the PI, with assistance from the CAHE Business and Resource Planning Office, to expend funds according to agency guidelines. Any disallowance by an agency or over expenditure must be covered from a source agreed upon by the PI, the Department Head, and the appropriate Associate Dean.
The New Mexico State University Board of Regents has authorized the President or his designee to sign awards requiring official NMSU acceptance. The President or his designee is the only person authorized to contractually bind the University. The President will sign only if an NMSU Proposal / Award Form has been completed and a copy of the submitted proposal is on file. Award documents requiring the President's signature should be forwarded to the Fiscal Specialist in the CAHE Pre-Award Office (GT 238); the Fiscal Specialist will obtain the President's signature.
Establishing a Project Account
Account numbers are assigned to each grant and contract after receipt of award documentation. These account numbers are assigned by the CAHE Pre-Award Office.
All unique attributes of the agreement are reviewed and entered into the University's accounting system by University administration personnel. After completing the review and entry process, the CAHE Pre-Award Office is notified and the account number is passed on to the PI and the appropriate departmental bookkeeper.
Cost Accounting Standards
Colleges and Universities recently have become subject to four of the Cost Accounting Standards required of for profit entities by Office of Management and Budget (OMB) Circular A21. The standards numbered 501, 502, 505, and 506 are the standards pertinent to colleges and universities. These standards require that costs directly charged to grants and contracts directly benefit the purpose of the grant or contract account. The standards also require that institutions be consistent in the process of estimating costs in proposals, accumulating costs in the accounting records, and reporting costs in the financial statements.
Principal Investigators need to ensure that costs charged to their grant and contract accounts are legitimate. Further, PIs need to review their accounts to ensure that inappropriate charges are removed from their accounts. Verification of salary charged to grant and contract accounts is accomplished by review of the NMSU s personnel activity report, which is provided quarterly. PIs are required to verify this report s accuracy by signing it.
The University Business Policy and Procedures Manual is available from each departmental bookkeeper to assist each department with proper accounting techniques and procedures.
Direct costs are charged to sponsored agreements when the costs can be specifically identified to the agreement with relative ease and a high degree of accuracy. These costs meet the allowability criteria established in OMB Circular A-21 and are not expressly disallowed in the award budget. OMB Circular A-21 is the document that defines cost principles for educational institutions and is the guide for the CAHE Office of Business and Resource Planning to follow in fulfilling its responsibilities to the College. If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or expense, that cost is allocated to the projects based on the proportional benefits to the projects.
During the negotiation stage, the CAHE Pre-Award Office will have built into a project the most liberal budget allowed by the funding agency. Nevertheless, the need to revise a project budget will often arise during the life of the project. Any revision request to an existing grant or contract must be coordinated through the CAHE Pre-Award Office.
Transfers of costs cannot be made into or out of grant or contract accounts, unless the original recording of an expense was in error. PIs should be very careful to charge all direct costs to the correct account when the expenditures are incurred. Consider the following excerpt from Section C.4.b of OMB Circular A21:
All cost allocable to a particular sponsored agreement under the standards provided in this Circular may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience.
Departmental bookkeepers are trained to assist PI s with the procedures to identify and prepare cost transfers.
Subcontracts are subject to special rules. See the Fiscal Specialist in the CAHE Pre-Award Office if you believe your project might involve subcontracts.
Grant and Contract Close-Out Procedures
Grant and contract accounts will be automatically frozen against further accounting activity two months after the established end date of the grant or contract. If the grant or contract is expected to be extended or refunded, the PI must contact the CAHE Pre-Award Office before the end of the second month after the established end date to assure that proper procedures are followed to keep the subject account active.
During the course of operating the grant or contract the PI will have been reviewing all direct costs charged to the account. During the two months following the established end date of the grant or contract, the PI must review again all direct costs charged to the grant or contract, make any necessary adjustments as described in the Cost Transfers section, above, and notify the departmental bookkeeper that the final cost review is complete. The CAHE Post-Award Office will prepare final billing and reporting documents and submit these documents to the proper personnel within the granting agency.
Final Technical Report
The PI is responsible for promptly submitting all required reports and any other required research deliverables. Many funding agencies withhold final payments and will not approve subsequent awards to a PI until the final report is received. When submitting a final report, also send a copy of the transmittal letter to the Post-Award Office in the CAHE Business and Resource Planning Office (GT 238). This letter will be placed in the grants / contracts file as part of the final close out process.