Sponsored Programs Services

Post-Award Administration

Revised: January 31, 2002

INTRODUCTION

The Sponsored Programs Services (SPFO) has the institutional responsibility for assuring the regents, the public, and the federal government, that the university has systems for fiscal accountability and internal controls for funds awarded to the university. Specifically, the unit's responsibility is to provide post-award fiscal and administrative support to the university community while ensuring regulatory compliance with university, state, private, and federal polices. The Unit is responsible for sponsored programs conducted on the main campus, branch campuses, the WSU Energy Office, agricultural research centers, and international locations. The Sponsored Programs Services "Strategic Plan" can be viewed at the following location: http://www.sps.wsu.edu/StrategicPlan.

POST AWARD FUNCTIONS

  • Fiscal administration for grants/contracts, cooperative agreements, sub-contracts, and financial assistance agreements negotiated with federal, private, and state sponsors.
  • Establish accounts in central data base and code accounts for budget allocations, funding mechanisms, F. & A. Costs, (Facilities and Administrative) and other related codes.
  • Maintain internal systems for monitoring status of all sponsored projects, for receivables, overdrafts, revenue, effort certification, cost sharing, letters of credit, electronic funding and financial reporting.
  • Provide assistance to Departmental Administrators and Project Investigators for interpreting regulations, special terms and conditions, and responding to issues pertaining to university, state, and federal policies.
  • Prepare and submit financial reports, invoices, property reports, patent reports, in accordance with award terms and conditions.
  • Obtain and/or provide audit reports for sub-recipient compliance with OMB Circular A-133.
  • Calculate federal interest for WSU accounts and refund annually to DHHS.
  • Maintain record retention schedules and project files in accordance with state and federal guidelines and/or regulations.
  • Request the establishment of foreign (alien) bank accounts and manage the transfer of funds and financial reporting.
  • Inter-act with the WSU Office of Grant and Research Development and central administration offices in the management of sponsored project activity.

This document addresses the major functions of the unit in providing services for post-award administration.

ACCOUNT SET-UP / BUDGET ALLOCATION

Authorization to incur costs are based on: (1) the receipt of a properly executed agreement, or (2) the submission of an "Advance Expenditure Authorization" form for awards not yet received but anticipated by the department/college. (alias - Guarantee)

  1. Award document - Review the award for appropriate attachments; special terms and conditions; expenditure restrictions; method of funding; invoicing and/or financial reporting; cost sharing/matching; F&A (Facilities & Administrative Costs) (formerly Indirect Costs) rate and base; and subcontracts.
  2. Account configuration - Assign customer number; allowable expenditure objects; billing instructions; letter of credit; revenue pool account; title to equipment; financial reporting; period of award; cost sharing budget; F&A expenditure base, F&A rate: revenue code; related accounts; and other codes unique to the account.
  3. Budget allocation - Allocate funds in accordance with the award or in accordance with internal departmental provisions where budgetary compliance resides with the department administrator/project investigator. If appropriate, set-up sub-accounts and allocate funds from parent account.
  4. Sponsored Projects Award Notification Sheet - Upon account set-up, complete this sheet to summarize some of the more important items for award monitoring. This includes award number; award amount; billing and financial reporting; special instructions; and restrictions. This sheet is sent to the project investigator and/or departmental administrator for summary overview and not a substitute for full regulatory compliance.
  5. Guarantee Account - (Advance Expenditure Authorization) This process enables an account to be set up (opened) to incur costs pending the receipt of the award document. Generally a "Guarantee" account is requested when there is an assurance that an award is forthcoming. Project Investigators should use this process to eliminate/reduce the need for subsequent cost transfers - especially payroll. This is critical, since an "Effort Certification Report" that is certified will need to be re-issued and re-certified for any payroll transfers. The College/department is responsible to "guarantee" costs from non-sponsored funding if the award does not materialize.
  6. Renewals/No Cost Extensions/Pre-Award Costs - Update accounts in accordance with the guidelines or policies provided by the sponsor. Refer to the Business Policies and Procedures Manual for submission of the "Sponsored Projects Activity Request Form. (SPAR). Notify sponsor and provide updated information to Project Investigator, the Office of Grant and Research Development, and other personnel as appropriate. SPFO will take action to update the account data base.
  7. Journal Voucher - Upon allocation of the budget and release for posting to accounting, a "Sponsored Project Allocation Notice" is issued the following day and sent to the departmental administrator. This notice reflects the account; principal investigator; project period; cost sharing obligation; previous budget; the current amount allocated by object and the new budget amount; granting agency number and name; grant/contract number; and overhead (F&A rate) and title.
  8. Sub-Code - For each account that requires invoicing, a separate sub-code with specific account attributes is entered in the Billing Receivable System (BRS). When invoices are batched for entry into the BRS system, this unique code is entered to track the receivable by account.

COST SHARING - OR MATCHING

Section 23 of OMB Circular A-110 provides governing regulations for the recording and reporting or cost sharing or matching. Federal as well as nonfederal sponsors may require the university to cost share a percentage and/or fixed amount of the total project costs. The budget submitted to the sponsor identifies the categories and amounts for cost sharing. Cost sharing can be mandatory as per federal statutes or program specific. However, a Project Investigator may elect to include a budget for voluntary cost sharing even though it is not mandated by agency regulations. A DRAFT "Cost Sharing" policy is located on SPFO's web site. Upon approval, the university community will be notified through the appropriate channels. The DRAFT policy can be viewed at: http://www.wsu.edu/~sponsor/index.html

  1. The university is required to document mandatory and voluntary cost sharing/matching in the official records of the institution to support audit. This includes voluntary cost sharing or "in-kind" matching that may be referenced in the cover letter, correspondence, or technical report(s).
  2. The fiscal monitoring and reporting of cost sharing/matching is in accordance with the sponsor's regulations, guidelines, or special terms and conditions. Cost sharing commitments are generally funded from unrestricted university sources (state appropriations) for faculty effort and fringe benefits. Facilities and Administrative costs (F&A costs) are calculated on these charges.
  3. A "Cost Sharing Effort Inquiry" form is sent to the Project Investigator for completion at the time the account is established. This form requests the names of individuals whose effort (time) will be spent on the project in order to meet the mandatory or voluntary cost sharing/matching obligation. Upon return to the Sponsored Programs Services, the names are entered into the cost sharing subsidiary system database and the sponsored account is pre-printed on the "Effort Report" that is subsequently issued. (see Effort Reporting)
  4. Cost Share Effort Inquiry form - For accounts that have a cost sharing obligation, this form is sent to the Project Investigator requesting the name(s) of the employee(s) who are budgeted or committed for cost sharing to the project (either voluntary or mandatory). The employee names are entered by SPFO into the Cost Sharing system for later recall when issuing an employee Effort Report. The account will appear on the employee's subsequent Effort Report(s) for reporting the percentage of effort contributed to the project from nonfederal funding sources. Generally this effort is contributed from state funded appropriations. (see Effort Reporting)
  5. On-line Cost Share Inquiry - The percentage of effort, account number, name of employee, and effort period, is available on-line via the Account Balances file. Go to the Account Balance Detail Menu and select PF7=Cost Share Menu. The amount of cost sharing is obtained from the subsidiary Cost Sharing system which is driven by the automated Effort reporting system. (see Effort Reporting)
  6. Account Structure - The cost sharing obligation is primarily met from state funds for effort contributed by faculty. The effort is recorded in a subsidiary file to the same account number assigned to the sponsored project. Since a unique account is not set up, this system provides extensive flexibility which reduces the administrative burden on the department. A personnel appointment to a separate cost sharing account is thus not required.
  7. Manual Cost Sharing Entries - The majority of cost sharing dollars are automatically calculated from faculty effort and applying a table driven fixed fringe benefit and F&A rate (formerly Indirect Costs) to the base. Manual entries are required for contributions made from third parties when sub-contracts include such provisions, and from non-personnel costs borne by the university from goods and services and/or other support costs.
  8. Cost Sharing Data - The data in the cost sharing system is utilized by various college finance officers in support of specialized reports that are submitted to federal agencies in support of programs and projects. This data is used by the Sponsored Programs Services in the preparation of invoices to sponsors. In addition, the data is used in the preparation of the F&A rate proposal submitted to the Department of Health and Human Services, Division of Cost Allocation.

INVOICING AND/OR PREPARING FINANCIAL STATEMENTS

Funding - The financial reporting, invoicing, and request for funds are unique for each federal agency. Funds can be drawn via Letter of Credit at (1) the agency or award level; (2) advance request as per award schedule; (3) reimbursed as per actual costs incurred; (4) progress billings for milestones reached; (5) percent of project completed and, (6) withholding a percentage of each invoice pending project completion.

The period billed, invoice format and expenditure categories reported, vary amongst federal agencies and non-federal sponsors. Cost sharing, when applicable, must also be reported. Effective January 1, 1999, all federal reimbursements are to be transferred electronically.

  1. Electronic Letter of Credit fund requests are based on the Daily Cash Balance report. This report provides the cash on hand for a specific group of accounts funded by a unique Letter of Credit. Individual accounts are codified to a specific Letter of Credit which enables cash balances to be summarized daily, and funds drawn for all accounts at the agency level. Funds are not drawn for expenditures that exceed the amount awarded.
  2. On-line electronic fund requests - Certain federal agencies require funds to be drawn at the award level. Funds requested cannot exceed the amount awarded. Some federal agencies allow funds to be requested based on the cash balance for all awards funded from a specific Letter of Credit. The cash balances for all Letter of Credit electronic funding requests are reviewed daily.
  3. Office of Naval Research - (ONR) The invoices submitted to ONR differ from other electronic fund requests. The invoices submitted are for expenditures incurred by budget category. The invoices are reviewed by ONR prior to release for payment. ONR maintains an independent electronic system for invoicing.
  4. Reconciliations - Certain federal agencies require a monthly and/or quarterly reconciliation and reporting for all revenues and expenditures at the award level for grants funded via Letter of Credit. The amounts reported must reconcile with the expenditures, receipts, and cash on hand in the WSU accounting system. This reconciliation must consider overdrafts, allotments in process, changes not reflected in the agency report for supplemental funding received, and other issues.
  5. Cost reimbursable invoices - The format and invoicing period differs for many sponsors who reimburse the university after costs are incurred. Billing periods vary amongst federal and nonfederal sponsors. The billing cycle may be monthly, quarterly, semi-annual, annual, or based on percentage of project completion or progress reports. Federal flow through awards and non-federal agreements comprise a significant number of accounts that are billed as cost reimbursable.
  6. Washington State agreements - State agencies require estimated invoices to be submitted prior to July 15th each year. This deadline is in accordance with state regulations. However, some state agencies set a deadline prior to this date. Several hundred estimated invoices are submitted after the preliminary closing at June 30, and a final invoice is submitted at a later date.
  7. Financial Reports - The Student Financial Aid office prepares the financial aid reports required for the federal and state programs. Funding for some of these programs are processed by the Sponsored Programs Services and expenditures reported are verified prior to release to the sponsoring agencies.

COMPENSATION FOR PERSONAL SERVICES

Federal regulations require the university to monitor the effort (time) spent by faculty and other employees charged to federally sponsored agreements. While the Office of Management and Budget Circular (OMB Circular A-21, section J8) prescribes various options for compliance, the university has implemented the "After-The-Fact" activity reporting method for certifying employee effort. This method requires those employees who are issued an Effort Certification Report to distribute effort to various classifications or functions that are consistent with the nature of the work performed.

Examples of effort classification functions are: instruction; organized research; public service; sponsored projects; cost sharing; departmental administration; general administration; and other activities.

Effort Reports are distributed to many university departments and organizational units for certification. Upon completion and return to the Sponsored Programs Services, the employee record is updated on-line.

  1. For faculty and professional employees, effort reports are issued four times each year. The effort period coincides with the academic calendar.
  2. For other selected employees the effort reports are issued monthly.
  3. Employees on time card are considered positive pay and certify their effort (time) as worked.
  4. Tables are maintained for use in calculating an average fringe benefit and F&A rate for employees who report effort to cost sharing.
  5. Effort reports returned are batched by the Sponsored Programs Services, assigned a batch number, and individually entered on-line. Effort reports reflect the percentage paid for each account for the effort period. Percents are pre-printed for all effort reporting classifications and sponsored agreements. If no change is made to the effort percentages as indicated, the report only needs to be signed.
  6. The subsidiary cost sharing system records employee name, period of effort, percent of effort, and the dollars associated with salary, fringe benefits, and F&A costs (objects 00/07/13). This data is available by account in the Account Balances file for on-line monitoring of the cost sharing/matching obligation by departmental administrators and Project Investigators.
  7. Cost sharing expenditures other than via the Effort Reporting system are entered manually. Documentation for costs incurred on non-sponsored projects must be submitted to maintain an audit trail. Third party cost sharing contributions require a letter detailing the costs for manual entry.
  8. The effort system maintains the dollars associated with the effort reported by effort classification, sponsored agreement, or cost sharing account for each employee. For non-sponsored accounts, no change is made to the accounting records when the percent of effort reported differs from the percent paid (see Business Policies and Procedures Manual). For sponsored agreements, a payroll change is required when there is a five percent or greater deviation in effort provided to a specific account (project).

COST TRANSFERS

Cost transfers are subject to the provisions in the Business Policies and Procedures manual and regulations or restrictions from federal and nonfederal sponsors. Cost transfers must be allocable to the project based on the criteria of the work performed. Transfers should not be made for the purpose of convenience or to expend the remaining balance for an account that has terminated.

  1. Cost transfers are reviewed to determine compliance with the above policies and procedures and must meet the sponsor's criteria for appropriateness, allocability and allowability.
  2. Cost transfers are reviewed to determine whether the sponsored account is coded to accept the expenditure object(s) for the cost transfer. Action may be required to request sponsor approval or additional objects may be added to the existing account to accept the transfer.
  3. Upon review, the initiator may be contacted to provide additional information or to provide additional written justification for transactions that exceed 90 days from the date of posting. Cost transfers in excess of 90 days are cause for concern. These transfers may indicate a weakness in WSU's policy that fails to provide assurance to the federal government that funds are not being manipulated. Departments are responsible for re-payment for any costs, including cost transfers that are disallowed at audit.
  4. Transfers processed for previously certified effort require the issuance of a new Effort Report, and a re-certification of effort for the period affected. Re-certified effort reports may indicate a weakness in the original review process and certification. Thus, careful attention should be taken to ensure that the percent of effort originally certified accurately represents the effort contributed to the various effort classifications.
  5. Incomplete cost transfer documentation could result in the transfer request being returned to the initiator, or processed with a notice returned to the initiator that provides guidance for reducing cost transfers.

SUB-CONTRACTS

Awards issued to the university may provide and/or allow for the sub-contracting of research to other organizations, universities or designated entities. This category excludes vendors who supply goods and services for which a departmental requisition and/or purchase order is submitted.

  1. Sub-contracts are independent agreements with a party external to the university. Subcontracts include a budget, period of performance, federal flow-down provisions, invoicing, special terms and conditions, sub-recipient compliance requirements, and reports to be submitted to WSU.
  2. Effective July 1, 2001, a separate account will be set-up for each sub-contract. Funds will be re-allocated from the parent account in accordance with the sub-contract budget. The parent account attributes are assigned when a separate account is established to allow for consolidation and oversight at the award level. A new download conversation has been added to the Account Balances that enables all accounts with the same award number to be summarized for financial overview at the award level. Refer to ACCOUNT BALANCES -- DOWNLOAD MENU - (SPECIAL) and select 26 Award/Account Summary. Various options are available to aggregate costs for selective accounts as well as options to exclude dates and objects.
  3. Separate sub-contract worksheets may be established when circumstances preclude the need for extensive monitoring. These worksheets are maintained on a PC and ultimately become part of the project file. Re-budgeting within the account (to a sub-contract object) is required to ensure that the funds are available to meet the invoices submitted by the sub-contractor.
  4. Financial reports submitted to a sponsor require that all the accounts established for a given award are consolidated and reconciled by SPFO.
  5. Task Orders - Although not considered a sub-contract, Task Orders can be issued or received for services provided in support of an agreement. Oftentimes, a sub-contractor may require Task Order groupings to be reported independently. Generally, a separate account is established for each Task Order and the attributes assigned that enable group reporting for accounts within the same Task Order group.
  6. Payment - Invoices received from subcontractors require approval by an authorized individual at the local level (department). Upon approval, invoices are sent to the Sponsored Programs Services for review with subcontract agreement provisions and entered into the Accounts Payable system for payment.

SUB-RECIPIENT MONITORING

The university is required to comply with OMB Circular, A-133, Revised June 24, 1997, entitled "Audits of States, Local Governments, and Non-Profit Organizations ". This applies to subcontracts made to other organizations by WSU or for subcontracts received from other organizations for federal pass-thru funds.

  1. Organizations that receive or enter into subcontract agreements for federal pass-thru funds are referred to as subrecipients. WSU is required to track and request audit information for federal funds provided to each subrecipient. Additional follow-up action may be required should audit findings occur. In addition, WSU, as a sub recipient, is required to provide audit information to organizations that have subcontracts with WSU.
  2. Washington State auditors, as part of the OMB Circular A-133 audit, are provided with a list of subrecipients and notice of action taken for compliance. Agreements with Washington State agencies that include federal pass-thru funds are identified for informational purposes only. Annually, WSU prepares a Schedule of Federal Financial Assistance for federal awards and identified by CFDA number (catalog of federal domestic assistance). For federal pass-thru funds, the name of each entity, entity agreement number, and CFDA number is identified separately in the schedule.

FEDERAL INTEREST CALCULATION AND REPORTING

The Office of Management and Budget, OMB Circular A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations", addresses interest earned on federal funds.

  1. The university deposits federal funds received to a separate bank account.
  2. At the close of each month, the daily cash balance for each federal account is determined. Simple interest is calculated for those days that the account has a positive cash balance. There is no off-set for the days that the account has a negative cash balance.
  3. The daily interest rate applied to accounts with a positive cash balance is provided by the university's General Accounting Department. Upon calculating interest earned, a journal voucher is prepared transferring the interest from the university's interest account to a sponsored project federal interest account.
  4. The monthly as well as fiscal year to date calculations for interest earned are maintained on Camelot (server) for use by the accounting technicians in the submission of Letter of Credit reports or when required by a specific sponsor.
  5. Interest is also calculated for nonfederal agreements based on the provisions imposed by the sponsor. Monthly, a journal voucher is prepared transferring the interest directly to the sponsored project account and allocated.
  6. At the close of the fiscal year, with the exception of a $250.00 administrative fee that is authorized by OMB Circular A-110, the interest earned for the fiscal year is remitted to the Department of Health and Human Services.

BILLINGS RECEIVABLE SYSTEM (BRS)

Awards and/or agreements for sponsored project activity are funded in many different ways as noted earlier. Upon receipt of an agreement and the assignment of an account number, billings submitted to sponsors are entered into the university's Billings Receivable System (BRS).

  1. Information pertaining to a customer and/or invoice is available on-line. Open invoices are summarized at the end of the account. Detail invoices can be viewed from the ACCOUNT BALANCES menu and selecting the Account Detail Menu - Report #19.
  2. Monthly, various aging reports are produced and used in the monitoring and follow-up of invoices. Invoices that are 90 days or older take priority in seeking payment.
  3. Information regarding action taken is updated either on the customer record or to the unique invoice. Problem customers and/or invoices are referred to the supervisor. WSU personnel who have authorization for BRS can view follow-up notices/contacts made by SPFO.
  4. The supervisor, upon determining that an invoice appears uncollectible as a result of cash flow problems, audit, bankruptcy, or a history of failed and/or ambiguous responses, the account is referred to the Finance Officer Sponsored Projects.
  5. Due diligence is exercised in collecting amounts due to the university. Departmental personnel are kept apprised of action taken on accounts where payment appears highly unlikely. Department personnel are encouraged to review the CASH BALANCE in the account as well as open invoices.
  6. While legal action may be considered in certain cases, rarely does this result in full payment of the sponsor's obligation.
  7. Upon exhausting prudent methods for collection, the responsibility for covering the amount outstanding becomes an internal issue to WSU. Clearing the records for the amount owed is extremely slow, time consuming, and oftentimes very contentious.

OVERDRAFT ACCOUNTS

The Account Balance system provides access for managing account activity. Although information is available on-line, SPECIAL OVERDRAFT NOTICES are periodically issued by SPFO to ensure that overdrafts are cleared on a timely basis. The NOTICE includes a due date for clearing the overdraft. Accounts are monitored to ensure that costs are transferred to other unrestricted university accounts. Failure to respond to the due date could result in the expenses being transferred to a departmental account by the Sponsored Programs Services.

INTERNATIONAL PROJECTS

The International Program Development Office manages projects and or enters into subcontracts in countries throughout the world. For projects managed by WSU, this requires the establishment of an in-country bank account. A foreign (alien) bank account requires the approval of the Washington State Public Deposit Protection Commission. Upon approval, the Commission issues a resolution signed by authorized personnel. Project funding to international locations is via wire transfer. Requests for funds are reviewed and approved by the Sponsored Programs Servicesr. In-country expenditures are reported monthly for posting to WSU's accounting records. Upon project completion, the Commission is notified and a resolution issued for bank account closure.

SUMMARY

  1. The post award administration of sponsored projects requires award monitoring from the initial account number assignment until closure. This includes request for funds; the submission of property reports; patent reports; expenditure reports; and archiving. Throughout the life of an award or account, interaction amongst various organizations or individuals occurs.
  2. The Sponsored Programs Services provides oversight and submits funding requests for federal and State Student Financial assistance programs. The Sponsored Project Finance Office also has responsibility for the submission of funding requests for federal construction agreements.

The management of sponsored projects is diverse and challenging. As mentioned earlier, the primary goal is to provide post-award assistance to faculty and administrators while cognizant of the university's mission of instruction, outreach, research, and public service.

Comments regarding this document can be submitted to the attention of Nancy McMahon, Finance Officer Sponsored Programs via e-mail:

mcmahon@wsu.edu

Sponsored Programs Services, PO Box 641025Pullman WA 99164-1025, 509-335-2058, Contact Us