Office of Sponsored Programs Policies and Procedures. Sponsored Program Award Management Guidance

Office of Sponsored Programs Policies and Procedures Contents Principal Investigator Eligibility... 2 Policy on Submission Deadlines for Applications Submitted by the Office of Sponsored Programs... 3 Pre-Award Spending Policy... 4 Direct Cost Charging Policy... 7 Cost Transfer Policy... 11 No-Cost Extensions Policy... 211 Policy on Grants vs Gifts... 233 Purchase of Personal Computers and Other Electronic Devices on Sponsored Programs... 28 Study Participant Payment Policy and Procedures for Research Studies... 333 Cost Sharing... 38 Policy on Treatment of Award and Account Dates for Clinical Trials and Other Sponsored Research Agreements with No Defined Study End Date... 42 Policy Statement on Research Related Injuries for Industry Sponsored Clinical Studies (jointly issued by OSP and the Office of Research Integrity and Compliance)... 45 Sponsored Program Award Management Guidance Please note that in addition to the policies referenced above, the following Sponsored Program Management Guidance documents are referenced separately on the OSP and Research Business Management (RBM) website. These guidance documents provide additional important processes and procedures for effective grant and contract award management, and are effective June 1, 2017. These include: Sponsored Financial Reporting and Closeout Guidelines Fixed Price Sponsored Awards Guidelines (replaces Unexpended Balances Policy). Both the policy and guidance documents should be referenced in relation to grant applications, contract acquisition, and grant and contract award management. Page 1 of 46

Principal Investigator Eligibility Any individual who holds an appointment in one of the following Practice Plans and has one of the following positions listed below can be identified as a Principal Investigator (PI) and submit proposals to external sponsors: Faculty Plans Pediatric Faculty Foundation (PFF) Lurie Children s Medical Group Children s Surgical Foundation (CSF) Positions Nontenure track research faculty (full, associate, and assistant professors) Nontenure track clinical faculty (full, associate, and assistant professors) Instructors Adjunct faculty Emeritus faculty Librarians Curators Other eligible principal investigators: In addition, an individual who holds one of the following positions can be identified as a PI upon approval from the President and Scientific Director or designee. Registered nurses (RNs) and Advanced Practice Nurses (APNs) employed by Lurie Children s; Members of the allied health team (including but not limited to pharmacists, rehabilitation therapists, and respiratory therapists) employed by Lurie Children s; Visiting faculty; Visiting scholars; Hospital administrators or directors, when sponsored project activities are within the scope of their departmental or practice responsibilities Research associates, postdoctoral fellows and research assistants: In general, research associates may not serve as PIs, but may seek approval from the vice president for research. Postdoctoral fellows and research assistants (graduate students) may not serve as PIs. Exceptions may be granted by the President and Scientific Director or designee in extraordinary circumstances. Page 2 of 46

Policy on Submission Deadlines for Applications Submitted by the Office of Sponsored Programs This policy establishes a two business day submission deadline prior to a sponsor deadline for applications that are submitted for Lurie Children s by the Office of Sponsored Programs (OSP). The timely submission of proposals ensures sufficient time for the thorough consideration and review of sponsor requirements, budgets and proposal elements for compliance with Lurie Children s and sponsor policies. Late submission threatens not only the proposal itself but also other proposals pending submission. The policy ensures that OSP prevents late submissions, and gives OSP staff adequate time to review proposals to avoid errors that can result in administrative triage by the sponsor. The policy also ensures that Principal Investigators have the opportunity to utilize the application viewing window prior to the sponsor deadline, for proposals to federal agencies which include this mechanism. This policy is effective for proposals submitted on or after May 1, 2013. For all applications submitted by OSP, the complete and final proposal must be received by OSP at least two (2) full business days prior to the sponsor's due date. The sponsor's due date is defined as the date and time after which the sponsor will no longer accept proposals. Department chairs, division heads, and program leaders may impose additional requirements regarding review and approval. Receipt by OSP includes: (1) the complete proposal with final attachments uploaded to Cayuse 424; (2) completed routing with all necessary approvals in Cayuse SP; and (3) any other attachments or approvals required by the sponsor or by Lurie Children s Hospital of Chicago Research Center, including compliance with the Policy on Financial Conflicts of Interest in Research and Sponsored Programs. If the internal deadline is not met, the proposal will not be submitted. In extraordinary circumstances, the PI, division head/program leader, and/or department chair may submit a written request for an exception to this policy to the President and Scientific Director or designee. Page 3 of 46

Pre Award Spending Policy This procedure has been established by Lurie Children s Office of Sponsored Programs (OSP) to set up a new fund number for new projects so that expenses may be posted to the fund prior to receipt of formal notification of an award. Sponsoring program agencies often allow a grantee to incur pre award costs at the grantee s own risk and without prior approval up to 90 days prior to the effective start date of a new or competing continuation award for costs that are necessary, allowable, and allocable under a potential award. This internal Lurie Children s mechanism to permit pre award costs to be incurred in anticipation of a new, competing continuation or non competing continuation award poses no obligation on the part of the funding agency or industrial sponsor to make an award to increase funding. Therefore Lurie Children s Principal Investigators and their Division Head/Program Leaders must be able to directly support pre award costs that fall outside the award s allowable pre award period, costs that are found to be unallowable, and/or costs that are incurred for an anticipated award, whether new or continuing, that does not materialize. Pre award fund number assignment will require the requesting Principal Investigator/Department to have completed the normal proposal routing process (Cayuse SP routing, proposal, budget, etc.) prior to consideration of a pre award project number assignment. Additionally, all compliance committee approvals (IACUC, IBC, IRB) must be in place prior to the fund being set up or be noted accordingly if other costs outside of those requiring compliance approval are necessary. Pre Award Spending accounts will be set up for the anticipated award period and be reviewed on a quarterly basis by the Office of Research Business Management and the Office of Sponsored Programs Accounting (OSPA). OSP staff will continue to work with the sponsor to obtain and accept award documents during the pre award spending period. The request requires approval of the Division Administrator prior to submission to the Office of Sponsored Programs. For a pre award fund number to be activated, a Principal Investigator may not have outstanding reports due to either the subject sponsoring agency or other sponsoring agencies. Page 4 of 46

Requesting a Pre Award Spending Account through Cayuse SP The following steps outline the process to request a Pre Award Spending Account, per the Lurie Children s Pre Award Spending Policy. Process overview: The PI division s designated Research Business Manager (RBM) or research staff submits a Pre Award Spending Account Request through Cayuse SP, using the Proposal Dashboard. The request is routed to and authorized by the Division/Program, and Office of Sponsored Programs. OSP staff facilitate the steps to set up the fund with OSP Accounting. OSP Accounting staff inform the investigator and research staff when the fund has been established. The RBM advises the PI and Division on incurring costs prior to full award issuance. Steps to submit a Pre Award Spending Account Request: 1. Log in to Cayuse SP and select My Proposals on the Proposal Dashboard. 2. Select the Submitted Proposals tab, then select the proposal number. 3. Select the Pre Award Spending tab on the center of the page, then select Add Pre Award Spending Request to Proposal. 4. In the Pre Award Spending Request form, complete the following fields: Description of Assurances of Funding: Enter description of documentation/information you have received from the sponsor that describes a guarantee of funding. This may include an email copied and pasted into the text box shown here. Please list the internal guarantee account that will be used if funding is not received. Please provide a 98 or 95 or cost center account. ARRA funding: NA. Type of Account: Select New Account from the drop down menu Page 5 of 46

Project Contact: Enter the name of the responsible research staff to contact for questions regarding this request, along with phone and e mail. 5. Select Submit Pre Award Spending Request for Processing. An email approval request notification will be sent to the Pre Award Spending Approvers for the administering Division/Program. The Pre Award Spending Approver from the division must electronically authorize the Pre Award Spending Request in Cayuse SP, before OSP authorizes the request. Specific steps to approve Pre Award Spending Account Requests are included in the email that the authorized administrator receives through Cayuse SP. Page 6 of 46

Direct Cost Charging Policy Purpose of policy In order to comply with 45 CFR 74 Appendix E requirements for costing on federally funded projects for Hospitals, Lurie Children s Hospital has established the following policy for charging costs to all sponsored projects. It is the responsibility of Principal Investigators, Project Coordinators, Department Heads, Division Heads and other administrators to understand and comply with institutional and federal regulations. I. Direct costs This Policy applies to all sponsored projects regardless of funding source. Direct costs are those costs that can be identified specifically with a sponsored project, or assigned to the project with a high degree of accuracy. Costs incurred for the same purposes in like circumstances must be treated consistently as either direct costs or indirect costs. The federal costing principles state that in order for charges to be allowable on sponsored projects as direct costs, the cost must be reasonable, allocable, consistently treated as direct charges, and not specifically identified as unallowable. Therefore, the cost must meet all the following conditions: The cost must be reasonable and necessary for the performance of the project. A prudent person conducting the work would spend funds in this manner under the same circumstances. At the time of purchase, cost must be allocable to the project, meaning the goods or services involved are chargeable to the project in relation to the benefits received. If the cost benefits more than one project, each project may be charged only for that portion of the costs representing the benefit received by the sponsored project. Direct charges to the sponsored project must be applied consistently in like circumstances as a direct charge for all sponsored projects. A particular cost item may not be charged as a direct cost on some projects and as indirect costs on other projects, unless sponsor has granted specific approval in award documentation. This must be signed off by Office of Sponsored Programs Institutional Official. Page 7 of 46

A project may not be directly charged for any item specifically disallowed by 45 CFR 74 Appendix E, agency specific guidelines or the award document. A. Examples of unallowable charges Assigning charges to sponsored projects in advance of the time the cost is incurred. Assigning charges that are part of the normal administrative support for contracts and grants (proposal preparation, accounting, payroll, etc.). Charging the budgeted amount rather than charging an amount based on actual usage. Charging a cost exclusively to a sponsored project, when it also benefits non sponsored activity. Charging overdraft expenses or deficits from one project to another. Charging travel costs for employees not specifically identified as working on the project. Charging sponsored projects to spend down funds without regard to the benefit derived from the cost. Identifying a cost as something other than what it actually is, such as classifying an item of equipment as a supply. Charging excessive costs in final months of projects. These must meet the criteria of reasonable, allocable and consistently treated in like circumstances. Spending outside of budget categories is subject to review by OSP and OSPA approval. B. Unallowable costs Expenses unallowable for sponsored project reimbursement Advertising for purposes other than patient or employee recruitment. Gifts and cash donations, other than approved patient incentives Alcoholic beverages Entertainment Fundraising or lobbying costs (including travel and meals) Fines and penalties Certain travel costs, please refer to travel policy: http://portal2/sites/lcpp/finance%20administrative%20policies/forms/allitems.aspx Memberships in civic, community or social organizations, or dining or country clubs Page 8 of 46

Goods or services for the personal use of employees, including automobiles Meals for internal meeting costs (i.e. lab meetings, employee held meetings) Bad debt Personal Computers and other electronic devices (see Lurie Children s Hospital Policy on the Purchase of Personal Computers and Other Electronic Devices on Sponsored Programs) II. Allowable costs charged directly or through the F&A rate In order to comply with the federal implementation of 45 CFR 74 Appendix E and the Cost Accounting Standards Board requirements, the policy is to charge the following types of costs as either Direct or Indirect costs. Questions regarding normally indirect cost items should be directed to OSPA. A. Direct costs Non administrative salaries, wages and fringe benefits: Principal Investigators Researchers (Research Assistant, Research Associate), Project Coordinators, Research Nurses,, Data Coordinator Graduate Students, Consultants Travel related to a project for employees paid or cost sharing on the sponsored project Laboratory, technical or project supplies Repair & maintenance on equipment purchased with project funds Research patient care cost (inpatient/out patient) Advertising for project related recruitment, both employee and patient B. Normally indirect costs Administrative salaries, wages and fringe benefits: Accountants Sponsored Programs Staff Secretarial & Clerical Page 9 of 46

Departmental Administrators Telephone line charges, cell phones, and pagers unless specifically approved by sponsor. General office supplies, data processing supplies Repair and maintenance on equipment purchased with institutional funds; unless charged as part of an approved service center rate Subscriptions, unless approved by sponsor Advertising for non recruitment or fundraising purposes Page 10 of 46

Cost Transfer Policy I. Purpose It is the policy of Lurie Children s that costs should be charged to the appropriate grant and contract award when first incurred. Regular review of financial records and timely communication between principal investigators and departmental administrators should prevent the necessity for cost transfers; however, there are circumstances where it may be necessary to transfer expenditures to a grant and contract award subsequent to the initial recording of the charge. A cost transfer is an after the fact reallocation of costs, either payroll or non payroll, to a grant and contract award. Federal requirements concerning the management of awards made to institutions such as Lurie Children s limit the circumstances under which cost transfers are allowed. II. Eligibility This policy applies to all grants and contracts, federal, state and private, and all cost categories, including payroll costs. If an individual agreement or sponsor has different requirements than those outlined in this policy, the most restrictive practice will be followed. III. Policy To comply with allowability and allocability requirements of grant and contract awards, it is necessary to explain and justify the transfer of charges to or from grant and contract awards. The federal government has established cost principles governing the administration of grants and contracts at hospitals. Per these cost principles (OASC 3 Cost Principles, Section III (iii)(d)(2)), Any costs allocable to a particular sponsored agreement 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 research agreement, or for other reasons of convenience. Page 11 of 46

A. The NIH Grants Policy Statement (Rec. 12/03) states: Cost transfers to NIH grants by grantees should be accomplished within 90 days the transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee. Merely stating that the transfer was made to correct error or to transfer to correct project is not sufficient. Transfers of costs from one budget period to the next solely to cover cost overruns are not allowable. Grantees must maintain documentation of cost transfers, pursuant to 45 CFS 74.53 or 92.42, and must make it available for audit or other review. Frequent errors in recording costs may indicate the need for accounting system improvements and/or enhanced internal controls. If such errors occur, grantees are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s). Cost transfers to NIH grants by grantees, consortium participants, or contractors under grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee, consortium participant, or contractor. An explanation merely stating that the transfer was made to correct error or to transfer to correct project is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42, and must make it available for audit or other review (see Administrative Requirements Monitoring Record Retention and Access ). The grantee should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, grantees are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s). Page 12 of 46

B. Cost transfers may only be allowed under the following circumstances: To correct bookkeeping or clerical errors in original charges within 90 days of the error and providing an appropriate explanation of the error. To properly allocate costs to the appropriate project using a verifiable and reasonable method in accordance with cost accounting principles. To transfer charges between projects supporting closely related work for reasons other than covering over expenditures. (Please refer to section H. Closely Related Work in this policy). C. In addition, the U.S. Department of Health and Human Services Grants Policy Statement (Rec. 1/07) states: Cost transfers by recipients between grants, whether as a means to compensate for cost overruns or for other reasons, generally are unallowable; however, cost transfers by recipients (or sub recipients or cost type contractors) may sometimes be necessary to correct bookkeeping or clerical errors. Recipients (and sub recipients and contractors) should have systems in place to detect such errors within a reasonable time frame. Untimely discovery of errors could be an indication of poor internal controls. Permissible cost transfers should be made promptly after the error occurs but no later than 90 days following occurrence unless a longer period is approved in advance by the Grants Management Officer (GMO). The transfer must be supported by documentation, pursuant to 45 CFR 74.53 or 92.42 that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible official of the recipient, sub recipient, or contractor. An explanation merely stating that the transfer was made to correct error or to transfer to correct project is not sufficient. This information need not be submitted to the GMO but is subject to audit. If the transfer affects a previously submitted FSR, a revised FSR must be submitted. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, organizations are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent Page 13 of 46

reoccurrence. An awarding office also may require a recipient to take corrective action by imposing additional terms and conditions on an award. IV. Procedure A. Cost transfers within 90 days Cost transfers involving grants and contracts processed within 90 days of the original transaction require approval signatures from the principal investigator (PI) and/or their designee and the Lurie Children s Office of Sponsored Programs Accounting. Approval via email is considered sufficient. The 90 days are measured from the 15th working day of the month following that in which the original charge was recorded (examples: charge posted 9/15/07, 90 days counted from 10/15/07). B. Cost transfers over 90 days Only in exceptional circumstances will cost transfers (including payroll re allocations) be permitted more than 90 days (as measured above) after the original charge or effort certification. The reasons why the cost transfer was over 90 days after the original charge must be documented in detail, and the transfer will require the approvals of the Principal Investigator (PI), the appropriate fund accountant, and the Director of Office of Sponsored Programs Accounting. C. Transfer policy Exceptional circumstances for cost transfers over 90 days that may be considered include; Late issuance of a Notice of Grant Award (NOGA), full execution of a subcontracts/contract subsequent to the start of the budget period or other period of performance; supporting documentation required. Page 14 of 46

D. Cost transfers at end of fiscal year Cost transfers involving grants and contracts processed for August must be completed within 90 days from receiving the Lawson financial reports from Office of Sponsored Programs Accounting. Please note: The Office of Sponsored Programs (OSP) recommends the use of the Preaward Spending Account Request to establish a pre award fund number, which is done at the request of the Principal Investigator. The requirements are: documentation that an award will be forthcoming, identification of an unrestricted backup account that can be used to cover costs in the event that the anticipated award does not materialize, and the submission of a budget/pre award requested amount. This pre award fund becomes the active fund upon receipt of the award documentation and funding and no cost transfers are subsequently required. Note that in order for a Pre award Account to be set up, a fully completed routing form must be done, detailed budget must be submitted and all compliance committee approvals must be in place. Please see policy on Preaward spending account. Failure of another department to take action, e.g. on a properly submitted payroll or nonpayroll re allocation change request; supporting documentation is required. Examples of circumstances justifying a cost transfer over 90 days that are not adequate include; Absences of principal investigator or cognizant research administrator, shortage of human resources, or lack of experienced staff. Please note: It is recognized that stewardship over grants and contracts in accordance with sponsor policies and procedures is a hospital commitment that must be met by the cooperation of a team of departmental and central administrators, as well as the principal investigator. It is the responsibility of this team to ensure the availability of qualified staff to administer and exercise stewardship over grant and contracts in accordance with sponsor policies and procedures. This includes monthly monitoring of grant expenditures such as identification of potential cost overruns, timely correction of errors, and reallocation of expenses as appropriate. The use of grant and contract fund numbers and other hospital funds as holding accounts for grant and contract expenditures that will subsequently be transferred elsewhere. At no time should expenditures be placed on a grant and contract fund number for reasons of convenience Page 15 of 46

or funding availability with the intention that they will be removed to the proper fund number at a later date. Such parking of costs violates sponsor agency guidelines and is strictly forbidden. Invalid or incomplete explanations or justification for cost transfers including, but not limited to the following; due to administrative oversight, to correct salary distribution, due to time constraints, or a redistribution of general department effort. Requestors are advised to submit explanations for lateness (i.e. over 90 days) in advance to the Director, Office of Sponsored Programs and Director, Office of Sponsored Programs Accounting before completing the required Lurie Children s Cost Transfer Request and assembling backup documentation. If frequent errors in recording costs to grants and contracts persist, a formal corrective action plan must be developed by the Principal Investigator, Director, Office of Sponsored Programs and Director, Office of Sponsored Programs Accounting to ensure conditions will improve. V. Other issues related to cost transfers A. Pre award costs For effective and economical conduct of grant and contracts it is sometimes necessary for costs to be incurred prior to the receipt of the award document and actual funding. OMB Circular A 110 generally allows these costs up to 90 days before the award. In such cases, departments must request that the Office of Sponsored Programs approve the establishment of a new grant and contract fund number via the Pre award Spending Account Request. The early fund number will become the permanent fund number when the award is effective and no cost transfers will be required. Page 16 of 46

B. Continuation costs If a continuation award is anticipated after the end date of the current award, costs may continue to be charged to the active fund number only if approved by the Office of Sponsored Programs. For continuation awards requiring assignment of a new fund number, costs must be allocated upon start date of award. C. Grant and contract closeout Cost transfers processed towards the end of a grant and contract budget period and/or which result in the clearing of an overrun raise serious questions concerning the benefit of the cost being reallocated to the specific sponsored project. In order to allow for adequate preparation of a final invoice due 90 days after the final end date all cost transfers related to the project being closed must be submitted 60 days after the final end date. If the final invoice is due prior to 90 days the transfers must be received at least two weeks prior to the final invoice due date. D. Unexpended balances In most instances unexpended grant and contract funding at the close of a project period must be returned to the sponsor. Exceptions are fixed price contracts or agreements allowing carry forward of funds, and awards under Expanded Authorities that allow institutions to internally approve no cost extensions. For clarification of the terms of a specific agreement, contact the Office of Sponsored Programs. E. Payroll cost transfers (Lurie Children s Employees) Payroll Cost Transfers of an individual s salary and associated fringe benefits are initiated via a properly completed payroll correction form for that individual. Payroll allocation changes, both after the fact and prospective changes to the current allocation of an individual s payroll amongst various grants or contracts must be completed via a template change. After the fact payroll reallocations only should be processed via a payroll correction form. The payroll correction form request will serve as the recertification of time and effort with the following statement: Page 17 of 46

Upon your signature, you are certifying that you have personal knowledge of the actual EFFORT as shown above for this individual. Timely and accurate filing of this report is required under federal regulations. Under extraordinary circumstances, changes may be permitted. The payroll correction form should be sent to the Office of Sponsored Programs for review and approval by OSP Accounting. Upon obtaining all relevant approvals, the Office of Sponsored Programs Accounting will process the form in the Lawson Accounting System. If the employees are changing payroll allocations related to a federally sponsored project, the payroll correction form request will serve as the recertification of time and effort. In all situations of payroll after the fact reallocations, a properly completed and authorized Lurie Children s payroll correction form must be submitted to the Office of Sponsored Programs Accounting Office. F. Payroll cost transfers (Physician Staff) After the fact payroll reallocations for physician staff (i.e. PFF, LCMG) should be requested via a fully completed and authorized Other Payroll Correction Request. The other payroll correction form request will serve as the recertification of time and effort with the following statement: Upon your signature, you are certifying that you have personal knowledge of the actual EFFORT as shown above for this individual. Timely and accurate filing of this report is required under federal regulations. Under extraordinary circumstances, changes may be permitted. G. Non payroll cost transfers A fully completed and authorized Lurie Children s Transaction Correction Form must accompany all nonpayroll cost transfers. Lurie Children s Transaction Correction Form which are not fully completed or lack the required documentation will be returned to the requestor along with a memorandum explaining why the cost transfer request does not meet Lurie Children s policy requirements. Cost transfers that may be excluded from the special documentation and authorization requirements include: Page 18 of 46

Transfers to allocate monthly charges benefiting multiple projects based on a verifiable and reasonable cost accounting method. Transfers between cost centers funded under the same federal award are considered intra award reallocations. Although these transactions are not considered cost transfers, they require the use of the Lurie Children s Transaction Correction Form H. Closely related work When the work supported by one sponsored project is determined to represent work closely related to that of another sponsored project, a cost transfer from one of the fund numbers to the other might be legitimately made. At a minimum, the following conditions must be met to justify a cost transfer on the grounds that the activity qualifies as closely related work : The projects are scientifically and technically related. The projects are under the direction of the same principal investigator. There is no change in the scope of the sponsored projects involved. The relating of costs will not be detrimental to the conduct of work under each award. The relatedness will not be used to circumvent the terms and conditions of the award. I. Roles and responsibilities Principal Investigator/Designee to: Reconcile fund reports monthly Ensure compliance with the Lurie Children s Cost Transfer Policy Ensure that personnel under their direction, engaged in the financial administration of grants and contracts, are familiar with Lurie Children s Cost Transfer Policy. Provide authorizations as per this policy. Department/Division/Program: Ensure that department/division/program personnel engaged in the financial administration of grant and contracts are familiar with Lurie Children s Cost Transfer Policy. Page 19 of 46

Assist the principal investigator in preparation of properly completed, justified, and authorized cost transfer requests in accordance with Lurie Children s Cost Transfer Policy. Office of Sponsored Programs: Prompt review and submission of research proposals, grant and contract negotiations, internal issuance of Notice of Grant Awards (NGA), execution of subcontracts, and approval of Preaward Spending Account Request to facilitate timely set up of grant and contract cost centers on the accounting system. Office of Sponsored Programs Accounting: Review cost transfers for compliance with Lurie Children s Cost Transfer Policy. Process properly completed and authorized transfers to the accounting ledger. Timely establishment of award fund number on accounting ledger, upon receipt of Notice of Grant Award (NGA), fully executed subcontract, or properly completed Pre award Spending Account Request Timely and accurate distribution of monthly financial reporting on grants and contract awards. Retain all hard copy cost transfer documentation, to be available upon audit, in accordance with applicable record retention regulations. Ensure that all personnel engaged in the financial administration of grant and contracts are familiar with the Lurie Children s Cost Transfer Policy. Page 20 of 46

No Cost Extensions Policy If project work is on going and funds remain available to cover project expenses, it may be appropriate to request a no cost extension. Considerations include award terms, funding for committed effort on the project, timing, and approvals required. It is not allowable to simply request a no cost extension based on availability of funds; rather, extension requests must be based on additional time needed to complete the aims of the project. While OSP encourages PIs to communicate progress on sponsored projects to program officials, formal requests for no cost extensions must be submitted to the sponsor by OSP following internal review. Considerations in requesting a no cost extension: I. Direct award terms: The Notice of Award/Contract/Award Document should provide information as to whether or not sponsor prior approval for a no cost extension is required. This information is based on the following review of the award terms and conditions. II. NIH grants under expanded authorities: Most NIH grants allow Lurie Children s to approve, internally, ONE extension of up to 12 months. Subsequent extensions require sponsor approval. PIs should facilitate approval below to request extensions to NIH awards within the 30 day period leading up to the end date, and no later than 15 days prior to the end date. III. Clinical study agreements: Many CSAs do not include an end date. If there is no specified term of agreement or end date, then the project dates can be extended while the study is active, with internal approval. IV. Subrecipient agreements, corporate agreements, federal contracts, and other awards: Sponsor approval is required, in accordance with award or subaward terms. V. Committed effort: Unless otherwise notified, sponsors, particularly Federal agencies, expect PIs (and other key personnel) to provide the level of effort outlined in proposal budgets. For Federal awards, the Principal Investigator and Key Personnel are expected to maintain the same, committed level of effort throughout a project, including a no cost extension period. Page 21 of 46

Procedure for requesting a No Cost Extension: 1. PI review with OSP post award staff: 30 days prior to the end date of the study, PI/delegate must send an email to the OSP post award staff contact and the Director, Office of Sponsored Programs, requesting an extension. PIs are encouraged to work with OSP post award staff on extension period budget projections prior to this request. The following information must be included in the request: Fund Number Current End Date Requested New End Date (limit up to 12 months) Reason for the no cost extension Additional time needed beyond the expiration date is require to assure completion of the original approved scope of work Continuity of grant support is required while a competing application is under review The extension is necessary to permit an orderly phase out of the project that will not receive continued support Other Reason not listed Detailed budget for no cost extension period Level of effort charged for key personnel on this project will remain throughout the no cost period unless approval is requested to change/reduce level of effort charged to project and/or cost shared. NOTE: If your project involves human subjects or animals, you must also ensure that you have current approval that will cover the additional extension period. Effort Reports for no cost extension period will reflect new end date of project and level of effort approved. 2. Request to sponsor: Following OSP review and approval, OSP staff contact the sponsor in accordance with award terms, to request the no cost extension. OSP will facilitate communication between the PI and sponsor if additional documentation is requested, through approval or disapproval by the sponsor. 3. Award update: Following sponsor determination, OSP will facilitate extension of the current award or initiate closeout of the award. Page 22 of 46

Policy on Grants vs Gifts I. Introduction Lurie Children s Medical Center receives extramural support for facility operating expenses, research, programs, endowments, training and public service projects through two principal mechanisms: sponsored projects and gifts. Extramural sponsors and donors provide funds to Lurie Children s Medical Center (Lurie Children s). The following guidelines should be followed in categorizing sponsored grants and contract funds and philanthropic gifts. II. Sponsored Project criteria: A sponsored project is a transaction in which there is a specified statement of work with a related, reciprocal transfer of products or services of value. A sponsored project may support Lurie Children s research related activities including, but not limited to training, instruction, public service and construction, as well as other activities outside of the research mission. The Office of Sponsored Programs (OSP) and the Office of Sponsored Programs Accounting (OSPA) are responsible for the acquisition and stewardship of funding from the following sources: A. Specific examples of sponsored types U.S. government agencies, at the federal, state, or local level Foreign governmental agencies and other foreign not for profit organizations Funding from voluntary health organizations or associations, such as the American Heart Association or the American Cancer Society Universities, hospitals, and other not for profit organizations Privately and publicly held corporations Projects sponsored by private foundation using a grant mechanism Page 23 of 46

B. Sponsored grant and contract proposal process Sponsored grant and contract proposals should be submitted to external sponsors via the Office of Sponsored Programs (OSP), which serves as the authorized signatory authority for Lurie Children s. Projects will be considered sponsored projects if any of the following criteria are met Sponsored projects are subject to facilities and administrative costs (F&A also known as indirect costs) at the Lurie Children s published rate applicable to the type of project being conducted. If the sponsor has a written policy, uniformly applied, prohibiting or restricting the payment of F&A to a lower rate, OSP may permit the funds to be accepted in accordance with the sponsor's policy. This exception does not apply to for profit sponsors, who are expected to provide full F&A when funding sponsored projects. The Chief Administrative Officer, Lurie Children s Hospital of Chicago Research Center, is the final authority responsible for determining the acceptance of the F&A rate in all cases. C. Critical indicators for sponsored grant and contracts: The sponsor places conditions on the publication or dissemination of results of the project. This would include a requirement that the sponsor review manuscripts, presentations and/or other materials as specified in the grant or contract award prior to submission for publication or presentation. The sponsor hopes to gain economic benefit as a result of the activity being conducted. Note: This is a critical indicator for corporate sponsors. Funded activity involves the use of regulated species and/or materials including in research including human subject s research, the use of animals, radiation hazards, biohazards, and/or rdna. The sponsor acquires proprietary rights in data or inventions resulting from activities conducted under the sponsored agreement. This would include any proprietary rights and/or references to licensing arrangements for patents or copyrights developed as a consequence of the activity. Studies are to be conducted on substances/products/processes/etc. that are owned by the sponsor. The sponsor shall retain ownership after the research is completed. Page 24 of 46

General Indicators for Sponsored Grant and Contracts: The funds are often awarded following a proposal or bid process. The sponsor requires a line item budget and often requires prior approval for any rebudgeting. The budget and award document has subcontract and/or consultant cost budgeted. The award requires management of the subcontract and consultant agreements and flow down of award requirements. The award comes from a corporation s Research and Development budget and is perceived as a cost of doing business rather than a charitable gift. The sponsor is entitled to receive some deliverables such as a product, service, detailed technical and status reports, test results. The sponsor generally indicates a specific time period for conducting the activity, commonly known as the period of performance. The sponsor may require that any unexpended funds be returned at the end of the period of performance. There are requirements for audits by or on behalf of the funding source. D. Philanthropic gift criteria A gift is often defined as any item of value given to Lurie Children s by a donor that usually expects nothing significant of value in return, other than recognition and disposition of the gift in accordance with the donor's requirements. Stewardship reports, both narrative and financial, are often required by the donor to document proper disposition of the gift. The Lurie Children s Foundation (Foundation) is responsible for the acquisition and stewardship of funding from the following sources: A. Specific examples of philanthropic gift types: Individuals Private, community and family foundations Private and publicly held corporations Page 25 of 46

Gift solicitations should be coordinated with the appropriate development office in the Lurie Children s Foundation (Foundation), and the Foundation should be contacted for procedures applicable to gift solicitations. Gifts may be subject to a gift "assessment" as set by Lurie Children s policy for the purposes of recovering Lurie Children s F & A cost. Gifts and funding sources/sponsors will be considered the responsibility of the Foundation if any of the following criteria are met: B. Critical indicators for philanthropic gifts The donor intends for the award to be a charitable gift. The donor has no expectations of direct economic or other tangible compensations (such as product or services) associated with the value of the gift. Indirect benefits such as tax advantages, business or personal goodwill derived from the close association with the hospital and miscellaneous benefits derived from being a donor are not sufficient to negate gift intent. C. General indicators for philanthropic gifts The gift is intended for capital improvement or for the general or programmatic use of the Lurie Children s Medical Center. The funds are often awarded following a competitive application. The conditions or stipulations placed on the use of the gift serve to direct the funds to an area of interest of the donor such as scholarships, infrastructure, programmatic or research support. The donor is entitled to receive some deliverables such as detailed programmatic reports, financial reports and/or status reports. The donor has the right to audit either the financial or programmatic aspects of the project. Expectations are dictated by a written contract or gift agreement. D. Implementation of policy on defining sponsored grants and contracts and philanthropic gifts: The Office of Sponsored Programs (OSP), Office of Sponsored Programs Accounting (OSPA) and the Foundation Accounting will make a joint determination if there is a question about whether external funding should be treated as a sponsored grant and/or contract or a gift. Page 26 of 46

If needed, a decision can be made by the Senior Executive Vice President/Chief Operating Officer of the Foundation and the Chief Administrative Officer, Deputy Director for Administration, Lurie Children s Hospital of Chicago Research Center with close consultation of Chief Legal Officer and Chief Financial Officer, Lurie Children s Hospital or his/her designee as appropriate. Page 27 of 46

Purchase of Personal Computers and Other Electronic Devices on Sponsored Programs I. Purpose This policy is intended to help Principal Investigators, Project Coordinators, Department Heads, Division Heads and other administrators to understand the appropriate costing treatment of personal computers and other electronic devices in the context of existing Lurie Children s Hospital (Lurie Children s) policy as well as emerging Federal agency guidance. Examples of these types of items include, but are not limited to, personal computers, laptops, tablets, smart phones, messaging devices, and personal digital assistants. Over time, as the cost of personal computers and electronic devices has decreased, often they do not reach the level of capitalizable equipment (unit acquisition cost of $5,000 or more) that has commonly been associated with eligibility to be charged to sponsored projects. However, regardless of the dollar value of the expenditure for any equipment, the acquisition of computing and electronic devices must still meet the criteria of allowability, allocability, reasonableness, and consistent application such that the equipment can clearly be shown to directly benefit the achievement of the required sponsored project. Please note that Lurie Children s will apply this policy to the purchase of any personal computer or electronic device for a sponsored project, without regard to (i) whether the sponsor is a federal agency, corporation, other institution or non profit organization, or (ii) whether the sponsoring agency is willing to cover the purchase of the item. II. Policy statement Through audits, specific denial of requests in notices of award, information dissemination at professional meetings and through policy clarification, the Federal Government has consistently apprised the research community that it does not consider personal computers and electronic devices to be an appropriate direct cost to sponsored projects. In order to comply with 45 CFR 74 Appendix E requirements for costing on federally funded projects for Hospitals, Lurie Children s has established the following policy clarification for charging personal computers and other electronic devices to sponsored projects. It is the responsibility of Principal Page 28 of 46

Investigators, Project Coordinators, Department Heads, Division Heads and other administrators to understand and comply with both institutional and federal regulations. Because computers and electronic devices are generally used for many different activities (for example, instruction, research, administration, and email) the default presumption is that these devices cannot meet the threshold requirements to allow the direct charging of their acquisition to a sponsored project. In all cases, purchases must conform to the cost principles for hospitals 45 CFR 74 Appendix E. Costing guidelines specify that charges for personal computers and other electronic devices, as with all other charges directly charged to sponsored project, must meet the following condition: The cost must be reasonable and necessary for the performance of the project. A prudent person conducting the work would spend funds in this manner under the same circumstances. At the time of purchase, cost must be allocable to the project, meaning the goods or services involved are chargeable to the project in relation to the benefits received. If the cost benefits more than one project, each project may be charged only for that portion of the costs representing the benefit received by the sponsored project. Direct charges to the sponsored project must be applied consistently in like circumstances as a direct charge for all sponsored projects. A particular cost item may not be charged as a direct cost on some projects and as indirect costs on other projects, unless the sponsor has granted specific approval in award documentation. This must be signed off by the Office of Sponsored Programs Institutional Official. A project may not be directly charged for any item specifically disallowed by 45 CFR 74 Appendix E, agency specific guidelines or the award document. They must be non personal in nature. III. Unlike circumstances In some cases, however, the use of personal computers and electronic devices specifically required for individual research projects can be justified as directly benefitting those awards. In specific situations, the purchase of personal computers and electronic devices can be an allowable direct charge to sponsored projects when the conduct of the research requires a computer, e.g., the computer is Page 29 of 46