In accepting external financial support for research, training, and other activities, the University agrees to ensure the sound financial management of the resources provided. A key element to successful management ensures compliance with sponsors policies and regulations that not only govern what types of costs may be paid with sponsor funds, but also require an appropriate distribution of costs among the various sources which fund the investigator’s work. It is important to keep in mind that our sponsors expect adequate financial responsibility in exchange for the resources they provide.
The University encourages the use of administrative staff to the maximum extent possible to assist principal investigators with their administrative responsibilities in the management of sponsored projects. The work conducted under sponsored projects is tightly linked to the allocation and management of costs and funds. The principal investigator, therefore, has oversight responsibilities and is the best, and often the only, source of instructions on how to distribute costs among the various sources of funds
Administrative or Clerical Staff
Administrative or clerical staff must be integral to a project in order to be direct charged to a federal award and must be budgeted and justified in the proposal or have prior written sponsor approval. Under the Uniform Guidance (), a project no longer needs to be identified as “major” to include administrative salary, but in general such expenses should be treated as indirect (F&A) costs.
To be integral to the project, the administrative activity should be:
- essential or vital to the project, and described accordingly in the justification;
- budgeted at a percentage of a person-month that reflects that essential nature (a minimum of 10% FTE);
- performed by individuals specifically identified with the project or activity; and
- costs that are not also recovered as indirect costs.
For non-federally sponsored projects, administrative or clerical staff may be direct charged provided they benefit the project and follow those sponsors’ requirements for the award.
Since these items are explicitly identified in the proposal, the assumption is the sponsoring agency approves this treatment of administrative and clerical salaries or other costs if they accept the proposal and subsequently fund the project. If the proposal and award document has not specifically identified these costs, the University is not allowed to rebudget approved funding to these categories unless specific written approval has been received from the sponsoring agency or delegated under expanded authorities for rebudgeting.
Treatment of administrative costs as direct costs must be uniform across projects. Administrative costs may be budgeted as direct costs only if this type of cost is consistently treated as a direct cost in like circumstances for all other projects and cost objectives.
Examples of circumstances where administrative or clerical costs may be considered essential include:
1. Large, complex programs such as Program Projects, environmental research centers, engineering research centers, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions.
2. Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting.
3. Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
4. Projects whose principal focus is the preparation and production of manuals and large reports, books and monographs (excluding routine progress and technical reports).
5. Projects geographically inaccessible to normal BSC administrative services.
6. Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocols; and multiple project-related investigator coordination and communications.
These examples are not exhaustive, nor are they intended to imply that direct charging of administrative or clerical costs would be appropriate under similar circumstances.
SPA staff are available to assist in the interpretation and application of University policy and Uniform Guidance.
Whenever possible, specific expenses should be individually charged to a specific sponsored award. When it is not possible or efficient to determine how much of the cost is used for each award, allocation of the expenses is allowable. Allocation is the process of assigning a cost to one or more awards in reasonable and realistic proportion to the benefit provided to the individual projects.
Cost sharing is that portion of "allowable" externally sponsored program costs not borne by the sponsor. "Matching" is a form of cost sharing often characterized by a required ratio (e.g., 1:1) of cost sharing to sponsor supported costs. The distinction between cost sharing and matching is not as important as the management and accounting for these project costs. When cost sharing or matching is provided through expenditure of other funding sources by the University the supporting documentation is based on cash outlays and recorded in project funds (15C funds). When the cost sharing or matching is provided through third party expenditures on behalf of the project, the substantiation of the value of the cost sharing or matching must be accepted by the University. In-kind cost sharing or matching contributions are donated services, use of non-University equipment, or space, that do not require any cash outlay therefore require special care in substantiating the values. These in-kind contributions are recorded in 16C accounts. Cash contributions from external sources are recorded in 17C accounts. The most important source of information on nonfederal cost shares can be found in Uniform Guidance.
Cost transfers between grants and funds are a common and acceptable accounting practice in research universities and also subject to federal audit scrutiny. Timely cost transfers to correct accounting errors and distribute costs are generally appropriate. Cost transfers not completed within 90 days of the original transaction date recording the expense require central office (SPA, Cooperative Extension, or Ag Experimentation Station) approvals as federal sponsors have determined that cost transfers completed more than 90 days after the original expense transaction are a risk of an unallowable cost. Transfers from one project to another or from one competitive segment to another solely to cover cost overruns are not allowable.
A Course Buyout, sometimes referred to an instructional release is when grant funds “buy” a faculty member’s released time by paying for that portion of their salary so that the equivalent amount of effort can be spent working on the grant.
In order to receive a course buy-out, the researcher must obtain documentation of approval from the Department Chair before proposal submission. Once approval is received, SPA will budget 12.5% effort plus fringe benefits, during the 9-month academic calendar.
Management of course buyout funds
In the event of a successful proposal, in which a course buyout has been budgeted and approved, the faculty member’s labor for the semester of the buyout should be modified to charge the budgeted salary to the fund number established for the new award.
This will result in a surplus in the unit’s salary account and can be used to pay the replacement instructor and any other expenses at the discretion of the College, such as costs of visiting or adjunct faculty or enhancing operational support of faculty development and student learning.
In the case of buyouts being paid from PI Help accounts, an amount equal to 12.5% of the faculty member’s salary, will be transferred from the PI overhead account into a unit designated account. These funds will then be used to pay the replacement instructor and any other expenses at the unit’s discretion as described above.
Example of course buyout calculation:
Professor John Doe has a nine-month academic salary of $90,000. Professor Doe received a grant in which a course buyout was budgeted and awarded for the Spring semester for $11,250 (1/8 of $90,000).
For the spring semester, Professor Doe’s labor distribution should be changed:
100% charged to college/department salary account, i.e., $90,000
1.3/4 charged to university salary account $78,750
2. 1/4 charged to new grant award $11,250 for the spring semester
This will correctly charge the grant $11,250 for the spring semester and leave a balance of $11,250 in the university salary account which will be made available to the College/Department to be used to pay the replacement instructor and other expenses at the discretion of the College.
Please work with your STAR GCA to ensure that your labor is properly distributed during the semester of the course buyout.
Upon acceptance of a federal award, the university becomes responsible and accountable for the Government property acquired with the underlying grant funds. The federal Government's guidance, rules and regulations codified in Uniform Guidance require the University to procure, use, and control property in accordance with Federal laws, executive orders, and directives from granting Sponsoring Agencies. The Government relies upon the University's internal control structure, environment and procedures to ensure compliance and adherence with these requirements.
Definitions of terms associated with government property:
Contractor - includes any person or organization that enters into a contract with the United States or any department or agency thereof. For purposes of this guidance, UNH is the contractor.
Contracting Officer - Government representative who enters into, administers, or terminates contracts on behalf of the Sponsoring agency.
- Government-furnished property - property in the possession of, or directly acquired by the Government and subsequently furnished to the Contractor for performance of a grant or contract.
- Contractor-acquired property - property acquired, fabricated or otherwise procured by the Contractor performing a contract, to which the Government has title.
Property Administrator - an authorized representative of the Contracting Officer assigned to administer the contract requirements and obligations relating to government property in the custody or control of the Contractor.
A required process when equipment is being purchased with federal funds to determine the existence of similar assets on campus prior to acquisition of assets required by or specified in a grant to avoid duplicating asset purchases. Screening must occur even when the equipment require is specifically approved and funded in the award. Certain federal agencies may require additional screening which would be specified in individual award documents, if required.
The university's Fixed Asset Management Office (FAMO) is responsible for maintaining the Fixed Asset System in Banner Finance. This system contains the official property records of the university in the form and structure required or mandated by Sponsoring Agencies. The property records include information such as location, description, unit acquisition cost, asset type and tag date for each individual piece of equipment acquired which meets the University capitalization threshold.
As required by Uniform Guidance, the university conducts a physical inventory on a biennial basis and the results are reconciled with current property records. All equipment encompassed by this section is subject to the biennial inventory.
Subcontractor Control of Government Equipment
For subcontracts involving equipment, UNH delegates to the subcontractor, via the subcontract document, responsibility for all government equipment acquired or borrowed by a subcontractor. Each subcontract entered into must contain specific provisions concerning the subcontractor's responsibility for government property. Such provisions require that the subcontractor assume the same responsibility and obligations of UNH (those outlined within this policy) with respect to the property while it is under the subcontractor's control. The subcontractor's property control system should include procedures necessary for satisfying these requirements and responsibilities.
Reporting of Government Property in the Possession of the University
The FMAO is responsible for preparing annual, special or periodic property reports required by federal agreements. The applicable university Department, its Dean or their designee, and the PI are responsible for investigating any loss, damage, destruction or theft of equipment and must promptly furnish a written narrative to the FMAO as soon as the facts become known.
Utilization of Equipment
The PI, their designee, or the responsible university employee should restrict the utilization of equipment acquired for use under a specific grant or contract to the purposes of that grant or contract unless otherwise noted in the award document or written approvals from the Contracting Officer.
Periodically, all property including government property in the custody of a department should be reviewed for utilization. Any property that is either temporarily or permanently not in use should be reported as excess equipment to the FMAO. .
Equipment Care and Maintenance
Principal Investigators, their designees and departments are responsible for safeguarding government property against loss or damage. PIs and other responsible individuals must ensure that the property is maintained and repaired by qualified personnel or return it to the manufacturer when repairs are required.
Sponsored Program Related Property Closeout
Immediately upon termination or completion of a government grant or contract, the department, PI or individual(s) having custody of equipment must perform a physical inventory adequate for appropriate disposition of all government property. The PI or their designee should work with Sponsored Programs Administration and the FAMO to request disposition instructions from the agency.
The university is relieved of responsibility for government owned property only when the:
- Sponsoring Agency Property Administrators determine when property has been consumed or expended properly and in reasonable amounts in the performance of the federal contract.
- Government property is shipped from UNH pursuant to the Property Administrator instructions.
- Title transfers to UNH and thereby ceases to be government property pursuant to the grant or contract provisions.
Questions regarding this guidance should be directed to the Fixed Asset Management Office.
Click to view the policy on Equipment.
Expense Approval Documentation
UNH Sponsored Programs Administration provides support to Business Service Center staff who work directly with principal investigators to provide appropriate and compliant stewardship of sponsored funds and compliance with federal cost principles.
UNH follows four cost principles. The cost must be (1) allowable, (2) allocable, (3) reasonable, and (4) consistent. Though these principles may change depending on the project, they must be used to determine whether the costs are appropriate for a sponsored project.
1. A cost is allowable when:
- When it serves a business purpose, including instruction, research, and public service.
- It is permissible according to UNH policy and federal regulations, regardless of whether it is a sponsored project.
- It is permissible for a sponsored project according to the terms and conditions of the sponsored agreement.
2. A cost is allocable:
- When the cost provides “benefit” to the project
3. A cost is reasonable when:
- A prudent person would purchase the item at that price.
- The cost is necessary for the performance of the activity
- Incurrence of the cost is consistent with established University policies and practices
4. A cost is consistent when:
- Like expenses are treated in the same manner under like circumstances.
- Consistency means that sponsors pay for costs either as a direct charge or as a Facilities and Administrative (F&A) cost, not both directly and indirectly. The University establishes policies that, if followed, ensure consistency.
Both activities and transactions could be considered unallowable due to regulations put in place by the federal government or other sponsor. 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 OMB Uniform Guidance.
For example, if a sponsor specifies that international travel costs cannot be charged to a particular project, then those costs may not be charged to that project, even though general UNH and federal regulations may allow them.
Unallowable activities include:
- Alumni activities
- Organized fundraising
- Commencement and Convocation
- General public relations activities
- Student activities such as intramural activities and student clubs
- 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
Unallowable transactions may include:
- Advertising (only certain types are allowable)
- Alcoholic beverages
- Fundraising or lobbying costs
- Fines and penalties
- Memorabilia or promotional materials
- Relocation costs if employee resigns within 12 months
- Certain recruitment costs, such as color advertising
- Certain travel costs, such as first-class travel
- Cash donations to other parties, such as donations to other universities
- Interest payments
- Membership in civic, community, and social organizations or in dining and country clubs
- Goods or services for the personal use of employees, including automobiles
- Insurance against defects in UNH’s materials or workmanship
The guidance below is provided for expenses charged to sponsored programs and for determining the reasonableness, allocability, and allowability of costs.
Foreign Travel on Federal Awards
Sponsor regulations regarding foreign travel vary. For this reason, all federally sponsored international travel must be pre-approved by the campus Sponsored Programs office. Requests for pre-approval should include the traveler's name, destination, cost, airline carrier (federal awards require U. S. flag carriers or carriers with an exception to the Fly America Act described below), source of funds, purpose of the travel, and ticket classification (e.g., the coach, business, first class, etc.). This information should be included when the traveler is requesting pre-approval.
The Fly America Act
The Fly America Act mandates the use of U.S. flag carriers when traveling on funds provided by the federal government unless permitted exceptions exist. U.S. flag carriers are airlines owned by an American company. The choice to “Fly America” is made regardless of cost or convenience. Travel with a foreign air carrier must be necessary and meet the exception criteria defined by the Fly America Act.
Fly America Act Exceptions
The biggest exception to the Fly America Act is the Open Skies Agreement. On October 6, 2010 the Unites States and European Union (EU) “Open Skies” Air Transport Agreement was published by the U.S. General Services Administration (GSA) providing full explanation of the multilateral agreement in place so that qualifying travelers, whose travel is supported by federal funds, may travel on European Union (EU) airlines as well as U.S. flag air carriers. There are also Open Skies agreements with Australia, Switzerland, and Japan. When traveling to a destination serviced by a European Union airline, USNH travelers flying on a federal grant can fly on either a US carrier or an EU carrier as long as they touch down in an EU Country.
i. USNH travelers on federal Funds cannot use city-pair1 contracts
ii. USNH travelers flying on a federal grant can use an Australian airline if the origin/destination is either the US or Australia and no city-pair contract flight between the two points (origin and destination) exists.
iii. USNH travelers flying on a federal grant can us a Swiss airline if a point of origin/destination is either the US or Switzerland and no city-pair contract flight between the two points (origin and destination) exists.
iv. USNH travelers flying on a federal grant can us a Japanese airline if a point of origin/destination is either the US or Japan and no city-pair contract flight between the two points (origin and destination) exists.
v. Travelers using funding from U.S. Department of Defense (DOD) or Secretary of a military department such as the Air Force, Army or Navy, are not permitted to take advantage of the open sky agreements. Travelers using these funds must use a U.S. flag carrier, unless they qualify for a permitted exception of the Fly America Act. If you are unsure if an exception exists, contact the responsible accounting and financial compliance representative for the award.
Caution: The costs of travel subject to the Fly America Act that do not adhere to this federal regulation will be borne by the Principal Investigator’s department or will need to be transferred to a suitable non-federal funding source.
Human Subject Incentive Payments
This guidance is provided for the payment of incentives to human subjects participating in research projects, and to determine when the gathering of research participant tax information is required.
Labor Distribution and Salary Cost Management
The largest category of direct sponsored program expenses is salary and benefits. The principal investigator (PI) is responsible for reviewing salaries charged to projects, and for validating and certifying percentages of salary charged to a project.
When a principal investigator manages a laboratory with multiple ongoing projects, the distribution of salaries of the PI, research assistants, researchers, and other staff to the various projects must be carefully considered. UNH’s process for salary distribution and certification verifies that direct labor charges to federally sponsored agreements are reasonable, and reflect actual work performed. This is commonly referred to as time & effort certification. This process shows the distribution of the effort of individuals among the various activities in which they work, as a percentage of total salary (not as a specified number of hours) devoted to benefit the project, either as a direct charge or committed cost sharing.
Charges for work performed on sponsored agreements during the academic year will be based on the individual’s regular compensation for the continuous period that constitutes the basis of his or her salary. Charges for work performed on sponsored projects during all or any portion of such period are allowable at the base salary rate. In no event should charges to sponsored agreements, irrespective of the basis of computation, exceed the proportionate share of the base salary for that period. See the definition of Institutional Base Salary (IBS) for more information. Some sponsors may choose to cap the salary or salary rate at a maximum level. In these cases, any salary over the cap is an unallowable expense on that project.
Further, charges for work performed by faculty members on sponsored agreements during the summer months will be determined for each faculty member at a rate not in excess of the base salary divided by the period to which the base salary relates. The base salary period used in computing charges for work performed during the summer months will be the number of months covered by the faculty member’s official academic year appointment. For example, if a PI works on a sponsored project for one month during the summer, the maximum amount of salary chargeable to the project is one-ninth of the academic year salary, assuming the academic year appointment is nine months. See summer and supplemental pay guidance.
If a principal investigator or key personnel named on the award, spends less effort on the project than proposed, the PI and the responsible department should:
- Determine if the sponsor should be notified
- Review and adjust salary charges
- Review any cost-sharing commitments based on salary
In addition, for federal awards, the PI must notify the sponsor in writing if he or she plans to reduce effort by (25%) or more from the awarded level. For example, if the award included one month of salary and the PI expects to spend only half a month on the project, the PI will need to request permission prior to reducing effort, explaining why the reduction is appropriate and how the project will remain on schedule with effort reduced. This notification must be routed through your Pre-award Compliance (PAC) Grant and Contract Administrator (GCA) for submission to the grant officer
Meals on Federally (or Federal Flow-Down) Sponsored Projects
This guidance is provided for meals charged to sponsored projects and for determining reasonableness, allocability and allowability of costs.
Participant Support Costs on Federaly Funded Projects
Procedures for Program Income on Externally Sponsored Programs at UNH
At Time of Proposal
- The Principal Investigator (PI)/Project Director (PD) who anticipates that program income will occur during an externally sponsored project includes in the initial and/or continuation proposal an estimate of the amounts (non-binding) and sources of the anticipated income. The amounts are entered on the appropriate lines of the sponsor-specific form, if a form is required, and/or explained in detail in the proposal budget narrative.
- Unless there is required cost sharing for the project and that cost sharing will need to be met with program income, the PI/PD requests in the proposal that the “additive method” be approved by the sponsor. The justification for this method is detailed in the proposal budget narrative. (One needs to consider the possibility that the “deductive method” may be applied at the sponsor’s discretion.)
- When budgeting for the proposed program or project, the PI/PD includes in the anticipated program income expenses the applicable fringe benefits and Facilities and Administrative (F&A) costs. The office of Sponsored Program Administration confirms that fringe benefits and F&A line items are included in the proposal budget prior to submission to the sponsor.
At Time of Award and Post-Award
- During the negotiation process for a new award and for unanticipated program income realized during the project period, the office of Sponsored Program Administration works with the sponsor and the PI/PD to clarify the applicable program income application method.
- The office of Sponsored Program Administration establishes a unique program income account within the appropriate series (15P…) in the USNH financial accounting system and links the program income account to the specific externally sponsored program account that it supports. (In Banner Finance, the program income fund has the same grant number as the related award.) No budget is established until actual program income is received by the PI/PD’s Responsibility Center (RC) unit.
- When actual program income is received, the RC unit deposits the revenue in the appropriate program income account established by the office of Sponsored Program Administration, and provides the office of Sponsored Program Administration Grant and Contract Administrator (GCA) with a copy of the check or evidence of cash receipt or bank transfer, the program income account number, and the requested budget line items. The office of Sponsored Program Administration will establish and/or modify the budget, with sufficient funds to cover anticipated direct and associated fringe benefits and F&A costs. It is the responsibility of the office of Sponsored Program Administration to ensure the appropriateness of re-budgeting program income accounts.
- It is the responsibility of the RC unit to monitor program income account revenues and expenses, just as for the parent account in order to ensure that expenditures are allowable under sponsor and UNH policies and to avoid deficit spending. If there is a program income account deficit or balance at the end of the project period, office of Sponsored Program Administration works with the PI/PD, and RC unit financial manager, to determine how to best remove the account deficit or deal with the balance under the terms of the sponsored programs award. The office of Sponsored Program Administration Financial Research Administrator (FRA) will close program income accounts in the USNH financial accounting system after the end of the project period and all reconciliations have been done.
- As specified in 2 CFR 200 §200.307(f) “there is no Federal requirements governing the disposition of income earned after the end of the period of performance for the Federal award, unless the Federal awarding agency regulations or terms and conditions of the Federal award provide otherwise.” This clause will also be applied to program income generated after a non-Federal award expires, unless the terms and conditions of the award specify otherwise.
SPA will advise the RC Unit/PI on the appropriate method of accounting for the program income earned after the award has expired.
Uniform Guidance defines program income as "gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award."
Program income includes:
- Fees earned from services performed under the project, such as laboratory tests;
- Funds generated from sales of commodities and research materials, such as tissue cultures, cell lines and research animals;
- Conference fees charged when a grant funds a conference;
- Income from registration fees, consulting, and sales of educational materials; and
- Sale, rental, or usage fees, such as fees charged for the use of computing or laboratory equipment purchased with grant funds
University policy on is available in the On-line Policy Manual.
The Knowledge Base contains forms, instruction and training material, minutes, policies, tools and other resources to support your research efforts by topic area.
Sponsored Programs Administration
Service Bldg., 2nd Floor
51 College Road
Durham, NH 03824
Phone: (603) 862-4865
Fax: (603) 862-3564
The University of New Hampshire is committed to ensuring employees are not subject to reprisals for “whistleblowing” alleged mismanagement or abuse related to a Federal contract or grant.
Claims of alleged misconduct can be submitted anonymously at the USNH Internal Audit Anonymous Hotline at http://www.usnh.edu/internal-audit/anonymous-hotline (link is external).
On the Durham campus, claims also can be submitted to Human Resources (862-0501) and Sponsored Programs Administration (862-2001).
Details: Notice to Employees Regarding Federal Pilot Program for Enhancement of Employee Whistleblower Protection