AURA Sponsored Projects Policies and Procedures

AURA Sponsored Projects Policies and Procedures Page 1 1/22/2013

Performance of the work described in this manual is subject to and governed by the Cooperative Agreement. In addition, CENTERS must comply with the following: AURA Policies and Procedure Manual; OMB Circular No. A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations; OMB Circular No. A-122, Cost Principles for Nonprofit Organizations; OMB Circular No. A-133 The responsibilities for those awarding contracts and serving as principal investigators continues to grow and change as government requirements change, and our compliance continues to come under more scrutiny. Increased restrictions have been imposed as the concern for the public s well being, concern for national security, privacy concerns, and new accounting procedures have grown. It is the responsibility of the principal investigator to assure compliance with all requirements and regulations governing their sponsored projects as well as providing the intellectual leadership for the project. The purpose of this guide is to assist staff members in performing their duties as Principal Investigators of sponsored projects and provide responsible oversight of sub-awards. The various policies and procedures discussed in this guide allow AURA to provide supportive and appropriate oversight for its sponsored projects and sub-awards. Page 2 1/22/2013

Sponsored Projects Overview Definition of a Sponsored Project Most grants, contracts, and other agreements from outside sources are "sponsored projects" and are administered through the Sponsored Projects Office. A project is considered a "sponsored project" if it meets any one of the following criteria: the proposed project legally binds AURA to a specific scope or area of work progress, technical, or final reports or other deliverables are required billing, separate accounting procedures, or report of expenditures are required unexpended funds may be required to be returned to the sponsor at the end of the project the project involves disposition of property, whether tangible or intangible, that may result from the project (e.g., equipment, inventions, copyrights, or rights in data) the project has a specified performance period or completion date the project has budgeted indirect costs the contract contains intellectual property terms Donations that do not include any of the above conditions, and if the donor does not benefit by the donation are generally considered gifts. The CAS accounting office will accept the gift on behalf of AURA and deposit the donation in a specified account to be administered by that office in cooperation with the department benefiting from the gift. If gift funds are to be used to support a research activity, provision should be made to pay all costs, both direct and indirect. Definition of a Sub-Award An agreement between two or more parties for the doing or not doing of something specified. A subrecipient is a third-party individual or organization performing a service or a portion of an AURA research project or program. The terms of the relationship are documented in a Sub-Award. 0ffice of Management and Budget Circular A-l 33, Subpart A, Section 105 contain definitions of vendor and subrecipient. Vendors, although providing an essential service or product to a program, provide the same service or product as a routine part of their daily business and are not subject to 0MB Circular A-l 33 or the compliance requirements of the award terms and conditions. Vendors generally supply goods and services that are necessary to the completion of a project but are not part of a cooperative programmatic effort. Page 3 1/22/2013

Subrecipients are usually sole source contributors (for example: universities, research institutes, hospitals employing professionals with unique experience and skills) who are part of the programmatic decision-making process and whose performance is measured against the program objectives. Subrecipients are subject to 0MB Circular A-l 33' requirements (except foreign entities or institutions with less than $500,000/year in federal expenditures) and must adhere to compliance requirements. A subcontract creates no direct contractual relationship between the subrecipient and the awarding agency. The relationship established by the subcontract agreement (also called subrecipient agreement, subgrant, subaward) is between the lead institution and the subrecipient and is a collaborative venture to bring to successful completion a project for which funding has been secured. Page 4 1/22/2013

Guidelines for Sponsored Projects Before You Begin Approvals and Notifications AURA has a special relationship with the National Science Foundation. AURA Centers are funded by NSF through a Cooperative Agreement that is either renewed or recompeted every five years. The specifics of the relationship are outlined in the Special Program Order (SPO) 1 for CENTERS, SPO 2 for NSO. The SPOs also describe the missions of Centers. NSF provides a base of funding to Centers to conduct their mission. When a Principal Investigator is interested in writing a proposal, they will need to have their idea/proposal reviewed by their department manager, especially if the PI is going to request salary support for their efforts. NSF also requires all proposals to be reviewed and approved by the Program Officer prior to submission. This review process may take up to a week. After an award is made, the NSF must be notified of proposals in the range $25,000-$100,000 per year, and also for proposals above $100,000 per year OR above $225,000 cumulative. These rules apply to proposals to non-nsf entities. For proposals to NSF itself, the same information (described below) is required for all proposals above $25,000, but prior approval is not, according to Article XII, Section H (3) of the cooperative Agreement. The information to be submitted for proposals (NSF and non-nsf) above $25,000 per year OR above $225,000 cumulative is given in the Cooperative Agreement as the following: Proposal Title, Name of the Principal Investigator(s) on the proposal Name of the agency to which it will be directed, Name of the cognizant official at that agency, and Notification that an interagency fund transfer (IAT) will be used to accomplish the transfer, if the proposal is to another Federal agency, or justification for use of a different mechanism than an IAT for the transfer of funds and a request for prior approval of that mechanism [Article XII, Section H (2)]. For proposals above $100,000 per year OR above $225,000 cumulative (NSF and non-nsf), it is required that you provide in the request for approval additional information: a statement of the reason for seeking outside funding, a statement of the impact that receipt of the funding would have on the CENTERS mission, the number of person-months devoted to the project by senior scientists, the level of CENTERS co-sponsorship, if any, copies of the transmittal letter to the potential sponsor, the budget, and an abstract of the proposed work. Page 5 1/22/2013

If funded, CENTERS will also provide to me the final statement of work, the final budget, and any modifications to the first four items named above in the initial submission for approval. CENTERS and AURA Approvals Proposals involving funding of $1,000,000 or less require only the Director s approval with copies of all such proposals forwarded to AURA. Proposals involving funding of more than $1,000,000 but less than $3,000,000 require the approval of AURA Oresident or designee. Proposals exceeding $3,000,000 require the approval of AURA Board of Directors. The CENTERS internal proposal routing approval requires that signatures of the PI, a representative of SPO and the Director for all proposals. What is a Principle Investigator? What is a Co-I? A Principal Investigator is the individual(s) a research organization designates as having an appropriate level of authority and responsibility for the proper conduct of the research, including the appropriate use of funds and administrative requirements such as the submission of scientific progress reports to the agency. Every proposal shall identify a PI who is responsible for the quality and direction of the proposed research and for the proper use of awarded funds regardless of whether or not he/she receives support through the award. The proposing organization has the authority to designate the PI and to designate his/her replacement, if that becomes necessary. SPO works closely to support and facilitate responsible principal investigator actions. A Co-I is a member of the proposal s investigation team who may hold either a full-time or limited-term appointment and who is a critical partner for the conduct of the investigation through the contribution of unique expertise and/or capabilities. A Co-I must have a welldefined, and generally sustained, continuing role in the proposed investigation, serve under the direction of the PI, and may or may not receive funding through the award. Only an individual who has formally agreed to the role may participate as a Co-I even if his/her participation is at no cost (i.e., contributed) to the proposal. The Proposal Process What is a Proposal? A proposal is a request for financial support for a project. Generally, a proposal consists of a technical section and a budget section. Page 6 1/22/2013

Pre-proposal A pre-proposal is a short (generally 2-5 pages) description of the proposed project. A preproposal may include a total cost estimate but does not include a budget, and it is not expected to result directly in an award. Usually, the purpose of a pre-proposal is to inform and interest the potential sponsor so that the sponsor requests a more detailed formal proposal. Solicited proposal Sponsors may solicit formal proposals by publishing a specific program announcement. Researchers responding to the program announcement write the proposal to meet the sponsor s program guidelines. A response to a Request for Proposal (RFP) is one type of solicited proposal. Most RFP s have a stated deadline and are one-time solicitations for specific needs of the sponsor, not expected to recur. The proposed project must respond to the specific work statement in the Request for Proposal. Solicited proposals should be routed through the Sponsored project Office with the required signatures and NSF approvals before submitting the proposal. Renewal and Continuation Proposals A competing renewal proposal (also called a competing continuation) is a request for continued funding of a project for which funding is about to terminate. Such proposals are similar to "new" proposals and must be routed and approved in the same manner. Noncompeting continuation proposals, which request the next year s funding within a multiyear grant, generally consist of a progress report, budget, and other materials such as research results, reprints, vitae for new personnel, etc. They sometimes include a financial status report indicating the unobligated balance for the current year. Generally, sponsors require the signature of the institutional official on the application page of noncompeting continuation proposals, and investigators are required to route noncompeting continuation proposals through the SPO even if a budget is not required. This is to ensure that appropriate staff are informed of the current status and any changes from the original proposal before the institutional endorsement is provided. The four relevant questions are: Has there been a change in the "other support" of key personnel since the last reporting period? Will there be, in the next budget period, significant rebudgeting of funds and/or change in level of effort from what was originally approved for this project? Has there been a change in status of conflict of interest or commitment since the last reporting period? Has a significant change in direction occurred, or is one planned? Page 7 1/22/2013

Revised Budgets When a sponsor wants to fund a proposed project at an amount different from that originally proposed, the sponsor will ask the investigator to submit a "revised" budget supporting the amount to be funded. A revised budget must be routed through the SPO to review the budget revisions. If the sponsor reduces the budget, the investigator must determine whether the originally proposed scope and objectives of the project can be met under the revised budget. If not, the investigator and sponsor must redefine the scope and objectives in writing before AURA accepts the award. The Contents of a Proposal Many sponsors supply a guide book with specific information on the content and structure of a proposal. Some sponsors also may use standard application forms or have a prescribed format for proposal preparation. Many also have page limitations, particularly on the narrative portion. It is crucial to meet all requirements. Applications not conforming to sponsor formatting requirements may jeopardize the proposal s success. Any deviations from the Guidebook usually will be clearly identified in the announcement of opportunity or RFP, but will be introduced only if needed for the unique requirements of the program being solicited. Proposals generally consist of the following elements: Cover Letter Title Page (or Application Page) Proposal Summary Table of Contents Scientific/Technical/Management Section References and Citations Biographical or vita of senior personnel Current and Pending Support Facilities Budget Budget justification Other appendices Signatures of the principal investigator and/or the authorizing official, including dates, titles, offices, and phone numbers. Abstract The Proposal Summary should provide an overview of the proposed investigation that is suitable for release through a publicly accessible archive should the proposal be selected The proposal summary (or abstract) should be concise, should not exceed 300 words in length and should not contain any special characters or formatting. It should concisely state the Page 8 1/22/2013

significance of the project, what will be accomplished, how it will be accomplished, and the proposed period of performance. Table of Contents Table of Contents that provides a guide to the organization and contents of the proposal. The TOC may also incorporate customized formats of the proposer s own choosing, e.g., identification of the submitting organization through use of letterhead stationary, project logos, etc. If using an electronic submission system it may provide some assistance in preparing the Table of Contents, but proposers are responsible for the accuracy of proposals submitted. Scientific/Technical/Management Section As the main body of the proposal, this section must cover the following topics all within the specified page limit. The objectives and expected significance of the proposed research, especially as related to the objectives given in the announcement; The technical approach and methodology to be employed in conducting the proposed research, including a description of any hardware proposed to be built in order to carry out the research, as well as any special facilities of the proposing organization(s) and/or capabilities of the proposer(s) that would be used for carrying out the work. The perceived impact of the proposed work to the state of knowledge in the field and the broader impact of the proposed work; A general plan of work, including key milestones for accomplishments, the management structure for the proposal personnel, any substantial collaboration(s) and/or use of consultant(s) that is(are) proposed to complete the investigation; and a description of the expected contribution to the proposed effort by the PI and each person identified regardless of whether or not they derive support from the proposed budget. The Scientific/Technical/Management Section may contain illustrations and figures that amplify and demonstrate key points of the proposal (including milestone schedules, as appropriate). However, they must be of an easily viewed size and have selfcontained captions that do not contain redundant information provided elsewhere in the proposal. References and citations All references and citations given in the Scientific/Technical/Management Section must be provided using easily understood, standard abbreviations for journals and complete names for books. It is preferred that these references include the full title of the cited paper or report. Biographical sketches Page 9 1/22/2013

The PI must include a biographical sketch (not to exceed two pages) that includes his/her professional experiences, appointments, a bibliography of recent publications, especially those relevant to the proposed investigation, synergistic activities, examples that demonstrate the broader impact of the individual s professional, and scholarly activities that focuses on the integration and transfer of knowledge as well as its creation. For NSF proposals, a list of collaborators & other affiliations, in alphabetical order (including their current organizational affiliations) who are currently, or who have been collaborators or coauthors with the individual on a project, book, article, report, abstract or paper during the 48 months preceding the submission of this proposal. Current and Pending Support Information must be provided for all ongoing and pending projects and proposals that involve the proposing PI. This information is also required for any Co-Is who are proposed to perform a significant share (>10 percent) of the proposed work. All current project support from whatever source (e.g., Federal, State, local or foreign government agencies, public or private foundations, industrial or other commercial organizations) must be listed. This information must also be provided for all pending proposals already submitted or submitted concurrently to other possible sponsors. Do not include the current proposal on the list of pending proposals unless it has been submitted to another possible sponsor. All projects or activities requiring a portion of the investigators time during the period of the proposed effort must be included, even if they receive no salary support from the project(s). The total award amount for the entire award period covered (including indirect costs) must be shown, as well as the number of person-months per year to be devoted to the project for each year, regardless of source of support. Title of award or project title; Name of PI on award; Program name (if appropriate) and sponsoring agency or organization, including a point of contact with his/her telephone number and email address; Performance period; Total budget; and Commitment by PI or Co-I in terms of person-months per year for each year. Facilities A description of the facilities available for use on the project should be included in the Facilities section. Major items for use on the project should be included in the Facilities section. Major items of equipment should be described and special technical support Page 10 1/22/2013

facilities, such as computing equipment, electronic shops, should be mentioned. This information will assist the evaluators in determining the capabilities of the organization. Statements of Commitment and Letters of Support Co-Investigator and Collaborator identified as a participant on the proposal s cover page and/or in the proposal s Scientific/Technical/Management Section may be required to submit a brief, signed statement of commitment that acknowledges his/her intended participation in the proposed effort. In the case of more than one Co-I or Collaborator, a single statement signed by all participants may be submitted. In any case, each statement must be addressed to the PI, may be a facsimile of an original statement or the copy of an email (the latter must have sufficient information to unambiguously identify the sender), and is required even if the Co-I or Collaborator does not receive financial support. Budget Each proposal must contain a budget for each year of support requested, unless a particular program solicitation stipulates otherwise. The amounts requested for each budget line item should be documented and justified in the budget justification as specified below. The budget justification may have a page limit. Accurate budget projection is important. These become the responsibility of the principal investigator and department manager. A Budget sample and narrative can be found at All budgets must be routed through SPO. The proposal may request funds under a variety of categories listed so long as the item and amount are considered necessary, reasonable, allocable, and allowable under the applicable cost principles found in OMB A-110 and A-122, under NSF policy, and/or the program solicitation. http://www.whitehouse.gov/omb/circulars/index.html. Amounts and expenses budgeted also must be consistent with NSF, AURA s policies and procedures and cost accounting practices used in accumulating and reporting costs. The Budget Narrative The Narrative must describe the basis of estimate and rationale for each proposed component of cost, including direct labor, subcontracts/subawards, consultants, other direct costs, and facilities and equipment. There should be direct and obvious correlation between the items described in the Budget Narrative, those given in the Budget Details, and if applicable, the figures entered in the electronic forms. The proposer may be required to provide supporting documentation to support estimates (i.e., competitive quotes obtained, justification for sole source purchase, proposed cost based on previous purchases for same or similar item(s), cost data obtained from internet research, etc.), Page 11 1/22/2013

Sometimes a requirement of the Budget Narrative is a table of Personnel and Work Effort, summarizing the work effort required to perform the proposed investigation. The table must have the names and/or titles of all personnel necessary to perform the proposed effort, regardless of whether those individuals require funding. For each individual, list the planned work commitment per period in fractions of a work year. Where names are not known, include the position, such as postdoc or technician. For the purpose of identifying work commitment only, a work year will be based on 1840 hours of productive effort this work commitment information should NOT change your use of your institution s standard financial practices for budget submittal purposes. The final element of the Budget Narrative is a description of any required facilities and equipment. This section should describe any existing facilities and equipment that are required for the proposed investigation. It must explain the need for items, describe the basis for estimated cost, and provide supporting documentation to support the estimate (i.e., competitive quotes obtained, justification for sole source purchase, proposed cost based on previous purchases for same or similar item(s), cost data obtained from internet research, etc.). Narrative Format Budget Cost Categories Direct Labor The Salaries and Wages section of the proposal budget includes the cost of persons paid on the CENTERS payroll for the portion of effort directly related to the project. Key personnel are always identified by name, title, and percentage of effort to be expended on the project. Personnel in other positions may be identified by name, to-be-announced (TBA), or title of job classification. The salaries of administrative and clerical staff are normally not allowed as direct charges to federally-sponsored projects, except in unusual circumstances where the project is "major," and the individuals involved can be specifically identified with the project or activity. The circumstances for requiring direct charging of these services should be clearly described in the budget justification. Labor costs are based on the employees actual salary rates, or an amount within the salary range of the job classification for persons to be recruited. An individual may not be charged to a sponsored project at a salary rate higher than the rate charged to other funds. Some sponsors may impose salary caps on the annual salary rate. Employee-Related Expenses (ERE) Also referred to as "fringe benefits," employee-related expenses cover the employer s contribution for FICA, retirement, health insurance, and unemployment insurance. Page 12 1/22/2013

Employee-related expenses used are current NSF approved CENTERS indirect rates. Charges to the project account will be calculated at the ERE rate in effect at the time that the employee is paid. There are different rates depending on work location and about of work effort. Check with the SPO for the current approved rates. Other Direct Costs: Subcontracts/Subawards: Attachments should describe the work to be subcontracted/subawarded, estimated amount, and recipient (if known). Itemized budgets are required for all subcontracts/subawards. The Internal Revenue Service establishes the criteria for distinguishing independent contractors from employees and imposes severe penalties for paying individuals as independent contractors who should have been paid as employees. Consultants: Identify consultants to be used and provide the amount of time they will spend on the project and rates of pay to include annual salary. There is a strong presumption that all individuals providing services should be classified as employees rather than independent contractors. Before engaging the "consultant," be certain that the individual meets the Internal Revenue Service criteria for an independent contractor. See specific sponsor guidelines for restrictions on maximum daily rates. Keep in mind that CENTERS procurement process requires competitive bidding before issuing a purchase order to the independent contractor. The director of procurement is authorized to waive the bidding requirement, based on an adequate justification for sole source procurement. Naming a consultant in the proposal budget is not necessarily sufficient support for sole source justification. It is good planning for the investigator to start the bidding process at the proposal stage, before the project is awarded. When a portion of the scope of work is split off from the principal investigator's project, to be conducted off-site under the direction of a third party, usually a university or company, the transaction is budgeted under the Subcontract budget category. The third party is considered a subcontractor rather than a vendor. It is important not to confuse a subcontractor with a vendor, which would be budgeted under the capital or operations category. Equipment: List all facilities and equipment items separately. General-purpose equipment (i.e., personal computers and/or commercial software) Some sponsors may have restrictions on types of equipment allowable. Supplies: Provide general categories of needed supplies, the method of acquisition, and the estimated cost. Travel foreign and domestic: Domestic travel includes US possessions, Puerto Rico, Canada and Mexico. Provide detailed costs for any proposed travel. Detailed data should include: how many people for how many days leaving from what city and traveling to what destination; Page 13 1/22/2013

estimated airfare, per diem, car rental, and miscellaneous costs (i.e., car rental fuel, airport parking, tolls, etc.). Other: Participant support, publications, computer services, Indirect Costs (also known as Facilities and Administrative Costs (F&A) It is important to distinguish between direct and indirect costs when preparing your proposal budget. Direct costs are those costs that can be identified specifically with a particular sponsored project, relatively easily and with a high degree of accuracy. Indirect costs are those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project. Examples of direct costs are: salaries and wages, fringe benefits, materials and supplies, travel, consulting services, equipment, student support on training grants, and subawards. Administrative Costs The Federal government does not permit direct charging of costs normally treated as administrative costs to federal grants and contracts, other than in exceptional circumstances where the costs are explicitly budgeted for and justified in the budget justification. Examples of costs normally treated as administrative costs include: salaries of administrative and clerical staff, and membership dues. If an investigator wishes to charge administrative costs to the project, the proposal budget must include a detailed line item for each administrative cost. The budget justification must provide a description of the purpose for the administrative cost and an explanation of the benefit to the project. Reference: OMB Circular A-21, Section F.6.b Cost Sharing and Matching Some sponsored programs may require participating in funding the costs of a project. CENTERS's participation in funding the costs of a project is referred to as "cost sharing." Cost sharing expressed as a ratio is sometimes referred to as matching. The terms cost sharing and matching are used interchangeably and are subject to the same federal regulations. Reference: OMB Circular A-110, Subpart C.23. Unless waived by the terms of the program, federal cost principles require that cost sharing contributions meet all the following criteria: are verifiable from the recipient s records are not included as contributions for any other federally-assisted project or program are necessary and reasonable for proper and efficient accomplishment of project of program objectives are allowable under the applicable cost principles are not paid by the Federal government under another award are provided for in the approved budget The cost sharing requirement can be expressed as (1) percentage of the principal investigator's level of effort, (2) number of hours of the principal investigator's time, (3) Page 14 1/22/2013

percentage of total sponsor-funded costs, or (4) as an absolute dollar amount. Conflict of Interest Policy Employees of AURA must be aware that outside obligations, financial interests, or other employment may result in a conflict of interest and affect the objectivity of their decisions and effectiveness of their performance. A conflict of interest exists when an employee is in a position to influence a business transaction, research activity, or other decision in ways that could lead to any manner or form of personal gain for the employee or for his/her family members, other than salary from AURA, regardless of source. A conflict of interest exists when a significant financial interest could directly and significantly affect the design, conduct, or reporting of funded research. The Conflict of Interest Disclosure Form, must be completed and forwarded to the HR Office. Disclosure forms and the complete conflict of interest policy are available in the HR office. Representations and Certifications Representations and certifications that are required to be submitted with the proposal vary, depending on the Federal agency and the contract amount. Generally, the grant application or the RFP will clearly specify which certifications are required. Proposal Submission If the solicitation expressly states that only authenticated electronic proposals (electronically authorized by the Authorized Organizational Representative, (AOR) are to be submitted, and all required attachments are submitted electronically with a complete cover page by the submission due date, then the proposal will be considered complete. Electronic submission of only the Proposal Cover Page does not satisfy the deadline for proposal submission. Because of the individual requirements of each electronic submission system, proposers are encouraged to begin their submission process early. When hard-copy submission is required, the required number of copies of the proposal (as specified in the announcement), including an original signed by the AOR, must be received by the submission due date. The address for the delivery of hard-copy proposals, if required, including a telephone number and point-of-contact for commercial delivery, is given in the Summary of Solicitation of each announcement. If both electronic and hard copy submission are required, the offeror must submit the required number of copies of the proposal (as specified in the announcement), along with the original signature of the AOR on the printed Proposal Cover Page, to the address specified in the announcement by the submission due date. Page 15 1/22/2013

Some funding agencies will only receive a proposal submitted by the AOR. In instances where an individual acts as both the PI and the AOR, the individual must take separate action for both roles to ensure that proposals are properly submitted. Transferring a Grant from Another Institution When a staff member transfers to CENTERS from another institution, the former institution will closeout its grant with the sponsoring agency. The sponsoring agency will then award a new grant to CENTERS. The first step in transferring a grant is for the relinquishing institution to notify the sponsor of the remaining balance and the new end date. The investigator should work with their former institution to determine the remaining balance of the grant. The investigator may need to submit a proposal from CENTERS to the sponsoring agency in the amount of the remaining balance. Many Federal agencies have special forms for both the relinquishing institution and the institution to which the grant is being transferred. Types of Agreements After a sponsor has agreed to fund a project, an award letter with an accompanying agreement is usually sent to the Sponsored Projects Office or the Accounting Department. CENTERS requires the original agreement, including purchase orders, and original signatures from the sponsor. The National Science Foundation, and some other sponsors electronically transmit award letters to the CENTERS. Awards from these agencies are the only exceptions to the policy requiring original award documents. Photocopies are acceptable. Be sure that all referenced attachments are present with the agreement. The administrative process for awards begins in Sponsored Projects. The award document, or agreement, is matched to the appropriate proposal file. The Accounting Department is authorized to set up a spending account in the CENTERS financial system (CAS) after receiving a fully-signed original award document and budget (e.g., purchase order, grant, contract). An account number will be generated and sent to the PI as well as to the procurement department to assign signature authorization. It is up to the PI to set up in the timecard the account number to charge labor time for themselves and/or assist others who may be working on the project. A record is created in the Sponsored Projects database to track the status of the award document. PIs have access to the information in the Grants Management Database through the web portal. If you have established grants or subawards, you can access the databases by using the same user name and password you use for your timecard. Restricted Gift Restricted gifts are donations of money or property that must be used for a specific purpose, such as faculty recruitment, equipment purchases, student financial assistance, or research Page 16 1/22/2013

(other than project research). The award document for a gift usually takes the form of a letter to AURA, written by the donor. Grant A grant is one of several mechanisms for supporting a specific activity, or project, under the direction of a principal investigator. Typically, sponsors award grants on a competitive basis to recipients responding to a sponsor's program announcement. A grant award instrument is used when the principal objective is to accomplish a public purpose. The scope of work and expected outcomes are less defined than a contract. Grants are associated with "assistance" type of funding and the contract is associated with "procurement." The administrative process for a grant is simple. The sponsor will send the grant award document to Sponsored Projects, at which time Sponsored Projects will notify the principal investigator of the grant award and set up an account. Cost-reimbursement Contract In a cost-reimbursement contract, the sponsor agrees to pay for all allowable costs incurred by CENTERS in the process of doing the work or research up to an agreed upon maximum. If the project costs less to complete than the original amount budgeted, the sponsor is obligated to reimburse CENTERS only up to the allowable costs of the project. Fixed-price Contract A fixed-price contract commits the principal investigator(s) to a defined scope of work for a set sum; that is, the sponsor pays CENTERS a fixed sum to complete a specific job, regardless of actual cost. The principal investigator is obligated to perform the work specified in the contract and to complete that work in accordance with the negotiated time schedule. The sponsor is obligated to pay the specified price, regardless of the actual costs of completing the project. Accurate cost pricing is critical in preparing the proposal budget for a fixed-price contract. If a fixed-price contract is audited, it is audited at the proposal stage, not after completion of the project. If the project costs more to complete than the contract price, the principal investigator must make special arrangements with their Department Manager, to cover the cost overrun. If the project costs less to complete than the contract price, the funds remaining at project completion are discretionary. The Accounting Department will charge the account for the unexpended indirect cost budget, leaving the remainder for the principal investigator. Purchase Order Companies and sometimes government departments use the purchase order as a mechanism for buying goods and services. The purchase order is usually a fixed price. Confidentiality Agreement A confidentiality agreement may be required by CENTERS when an investigator will be Page 17 1/22/2013

disclosing non-published or non-patented information to a commercial company. It may be warranted in some circumstances, when disclosing to colleagues at a research institution. A confidentiality agreement may be required by a company when the company wishes to disclose its proprietary information to a CENTERS investigator. The company may wish the institution to sign as well as the investigator. Collaboration Agreements Collaboration agreements involving investigators employed by more than one organization may develop informally at the beginning stage in preparing a proposal, or they may be formally required by a funding agency as part of a proposal. If the collaboration is with an employee of a company, a collaboration agreement may be reviewed by CENTERS and intellectual property rights must be addressed. If the collaboration is between a CENTERS investigator and a non-centers, non-company investigator, a letter of intent is still good practice. The letter of intent should include a statement agreeing to collaborate, the identification of the scientists responsible for the respective activities, and a sentence or two describing what each collaborator will contribute. Setting Up an Account The Accounting Department is authorized to set up a spending account in the CENTERS financial system (CAS) after receiving a fully-signed original award document and budget (e.g., purchase order, grant, contract). The breakout of budget categories in the CAS account must be identical to the award budget. The CAS budget will be changed only on the basis of written approval from the sponsor, such as a contract modification or letter. If the award document does not include a budget page, the proposal budget will serve as the basis for loading the CAS budget. An account number will be generated and sent to the PI as well as to the procurement department to assign signature authorization. It is up to the PI to set up in the timecard the account number to charge labor time for themselves or for others who may be working on the project. Account Structure XXX-XXX-XXX First Position (X- For INTERAGENCY TRANSERS and NSF Grants: For HST Grants and Purchase Orders: Z (Same for Centers Second Position ( -X Signifies the location of HST Grants and P.O.s C = Chile K = Kitt Peak S = Sunspot X = Tucson and off-site locations (i.e., NASA/GSAF) Page 18 1/22/2013

Or type of Grant: P = NSF Grants Z = "soft money" for INTERAGENCY TRANSFERS If interagency transfer (ref. Position #1) then 3 rd position will always be C, K, P, S, or X; Otherwise 3 rd position will be H (Hubble Grant) or P (Purchase Order) Note: Universities, commercial companies, etc. will always be purchase orders. Third Position (_-_X_- ) Location for IAs and NSF Grants C = Chile K = Kitt Peak P = GONG S = Sunspot X = Tucson Or type of Grant: H = HST Grant P = Purchase Order Pre-award expenditures CENTERS does not have authority to incur costs against a grant or contract until a fullyexecuted award document is in place. Most sponsors require their approval before charging preaward costs to the project. A provision for preaward costs in the terms of the contract is the most acceptable documentation of sponsor approval. A letter from the contracting officer or grant officer approving preaward costs is also acceptable. Delay in the award letters and transmission of funding does happen. Do not be tempted to charge another sponsored project account for costs associated with your pending award. Instead, if award documents are late and the investigator knows that CENTERS will accept the terms of the award, e.g., continuation awards or Federal grants, contact your department manager to see if it s possible to cover expenses. The budget will be loaded to the account after the award document is fully-executed. If the award does not come through, the principal investigator and department manager must contact the accounting office to discuss the transfer of any costs that may have been incurred. Reports, Audits and Site Visits Occasionally, a Federal agency will audit a proposal before negotiating the contract. The auditor will verify the ERE and indirect cost rates, labor rates, and will review quotes and other documentation supporting the proposed costs. The audit report will be sent to the appropriate Federal contracting officer for purposes of negotiating the contract with CENTERS. The investigator may request a copy of the audit report from the awarding office. If a representative from the sponsoring agency contacts you to schedule a site visit, notify your department manager and ask about the proper procedure for setting up the visit. Page 19 1/22/2013

Sometimes the sponsor will want to talk to an administrator about the financial capabilities of the institution. A representative from Sponsored Projects or the Director s office may best be able to address these issues. Spending the Award AURA must follow the laws and regulations imposed on us by the Federal government concerning allowable costs. The most important test in determining whether a cost is allowable or not is the Relative Benefits Test. What proportion of the cost is directly related to the project? The project should bear no greater proportion of the cost than the proportion of the direct benefit to the project. Can the cost be specifically identified with the project relatively easily with a high degree of accuracy? Is the cost reasonable? Is the cost given consistent treatment on all sponsored as well as non-sponsored funds? Does the cost conform to the terms of the award, NSF/AURA policy, State Law, and Federal Law? Is the cost generally recognized as necessary for the performance of the sponsored agreement? Typically, the majority of the direct cost budget for research grants and contracts consists of personal services. Federal cost principles allow the direct charging of personal services to project accounts, provided that the following requirements are met. The employee's effort directly benefits the project. The personal services costs are reasonable and necessary in order to reach project objectives. The personal services costs are treated consistently, in accordance with established policies of the institution. The terms of the agreement or Federal cost principles do not otherwise prohibit charging the personal services costs. The important point is that the salaries and wages charged to a project must represent the proportionate share of effort that directly benefits the project. The principal investigators are responsible for all financial activity charged to their sponsored projects accounts. Rebudgeting The budget is an estimate of the spending plan for the project. The actual spending pattern will vary from the categorical budget breakout. The terms of your award will dictate how much the actual project expenditures may vary from the cost categories of the award budget. Sponsor Prior Approval Requests for sponsor approval of budget deviations and requests for sponsor approval of specific items of cost should be addressed to the grants officer or contracts officer, with a copy to the program officer and to the SPO. Subcontracts (Subawards, Subgrants, Subrecipients) When a portion of the scope of work is split off from the principal investigator's project, to be conducted off-site under the direction of a third party, usually another institution or Page 20 1/22/2013

company, the transaction is budgeted under the Subcontract budget category. The third party is considered a subcontractor rather than a vendor. Most sponsors require their prior approval before CENTERS can transfer substantive programmatic work to a third party, by contracting or any other means. When a sponsor awards a project to CENTERS, the sponsor expects CENTERS to perform the programmatic work, not some other entity. Generally, an award based on a proposal budget with a line item for the named subcontractor constitutes documentation of sponsor approval. Some sponsors do not require their approval before subcontracting to a third party. For those sponsors, CENTERS requires sponsor notification rather than sponsor approval. An award based on a proposed budget with a line item for the named subcontractor constitutes acceptable documentation of sponsor notification. Keep in mind sponsor prior approval requirements for reduction of investigator level-of-effort when subcontracting. The process for initiating a subcontract begins when the principal investigator prepares and submits a Purchase Requisition through Reqless for the subcontract. The Procurement Department reviews the grant file for documentation of sponsor approval or notification, signature authority and approves the Purchase Requisition. The Contracts Officer administers the subcontract, including determining the acceptability of the subcontractor's pricing and costs, sole source justification, drafting of the subcontract document, negotiating the terms with the subcontractor, and mailing the final subcontract agreement to the subcontractor. During the life of the subcontract, the principal investigator will review and approve the subcontractor's invoices before Accounts Payable pays the invoices. The principal investigator is responsible for monitoring the technical progress of the subcontractor and for ensuring that all technical requirements have been met. Sponsored projects will coordinate reporting requirements, if applicable, and coordinate closeout or a no cost extension. Account Management Each account in CAS is assigned to a responsible person. For sponsored projects accounts, this person is the principal investigator. The principal investigator may delegate some of the duties associated with financial management of the account to a subordinate. However, the principal investigator assumes full responsibility for all activity on the account. The principal investigator is responsible for ensuring that all disbursements from the account are: for the bona fide purpose of the account; allowable per the terms of the award authorized in accordance with CENTERS policies, State and Federal laws and regulations; charged to the appropriate object code; and Page 21 1/22/2013

fall within the available funding for the account The principal investigator is responsible for ensuring that: the account is reconciled on a timely basis, i.e., within 30 days of receiving the monthend report; immediate action is taken to resolve the errors or discrepancies noted during the report reconciliation and to follow up to ensure that errors are corrected; the account is updated for changes in authorized signers and other account information; file copies of supporting documentation for all activity processed on the account is maintained for at least five years after the final closeout of the project. Calculating the Available Balance There are several reasons for the differences between the true available budget balance and the figures reported by CAS: Invalid payroll encumbrances (payroll not encumbered through the budget end date or payroll encumbered beyond the budget end date) Pending transactions (goods and services ordered but not encumbered, e.g., consultants, stores orders, check requests for reimbursements, etc. Posting errors Variation in spending pattern among cost categories (effect on indirect costs) Timing differences in posting indirect costs It is important to understand how the accounting system deals with the indirect cost category of the budget. The entire indirect cost budget is encumbered when the budget is loaded to the CAS account. When rebudgeting between categories, consider that the indirect costs associated with the rebudgeting may not have been encumbered but will be charged to the account nevertheless, and will reduce the available balance. The same is true, in reverse thus increasing the available balance in the account. Overexpenditures Responsibility for clearing overexpenditures on sponsored projects accounts belongs to the principal investigator and department manager. Financial Status Reporting The Accounting Department prepares a financial status report for the sponsor, according to the terms of the award. Invoicing The Accounting Department is responsible for preparing and sending invoices to the sponsoring agency. Page 22 1/22/2013