FSU’s Policy on Advances

CReATE

CReATE ver. 5/13© 2013 Florida State University. All rights reserved

Policy

Policy on Advances for

Externally-Funded Projects

and Initiating Work

without an Award

Purpose of Policy

To ensure the timely start-up (or uninterrupted continuation) of sponsored projects before a fully-executed award or amendment is received.

Policy

Without an advance authorized by SRS/FSURF:

Absolutely no work is to be started; and

Subcontractors cannot be authorized to start work. (Even with an approved advance, subcontractors are rarely authorized to work prior to FSU’s receipt of the award.)

Costs incurred prior to advance approval will not be allowed to be charged or transferred to the new project, or any other sponsored project.

Applicability

This policy is applicable to:

Externally-funded projects that have been approved for funding, and/or

Extensions for which fully-executed award documents have not been received.

Criteria for Authorization

All of the following criterion should be met for an advance to be considered:

1. Sponsor assurance of funding has been received.

2. There is a valid reason for the advance.

3. The department or college has agreed to provide backing.

Criterion #1 – Sponsor Assurance

The University should receive written or verbal assurance from the sponsor that a project has been recommended for funding.

The assurance should include: Recommended start and end dates, Amount of initial obligation of funds, Project budget (if different from the proposal), and The anticipated receipt date of an award document.

Criterion #2 – Valid Reason

The valid reason must be that any delay in starting or continuing critical program requirements may adversely impact the program or significantly increase the cost.

Critical program requirements include but are not limited to: The continuation of essential project employees; or Urgent project expenses (such as purchasing

equipment or traveling) require immediate action.

Criterion #3 – Backing

The department shall assume the risk by providing financial backing of all direct costs advanced.

NOTE: The department is advised to limit its exposure to risk by limiting the amount of advance and/or the period of the advance.

Responsibilities

Principal Investigator

Ensure that FSU employees do not start work nor incur project expenses without an approved advance.

Ensure that subcontractors do not start work without a fully-executed subcontract.

Stop work or request an additional advance if the advance period expires or the advance funding has been exhausted.

Responsibilities

Chair/Director/Dean

Authorize advance accounts. Ensure sure that charges on the advance project

are absolutely essential and cannot be deferred. Ensure that the PI stops work when the advance

period expires or funding is exhausted. Assume the risk for costs incurred on advances.

Responsibilities (cont’d)

SRS/FSURF

Review appropriateness of advance request, and approve as needed.

Follow up with the sponsor, in conjunction with the PI, about the anticipated award.

Risks Associated with Advances

For cost reimbursable awards, costs may be disallowed if they are incurred outside the approved period of performance or budget.

The University may not be able to accept the award if the terms are unacceptable and the sponsor refuses to change them.

Risks Associated with Advances

The sponsor may decide not to issue an award.

Starting work (performing services and/or delivering work product) may be construed as automatic University acceptance of the award terms and conditions, resulting in the University having a poor negotiating position.

Reminder

Costs incurred prior to approval of an advance will not be allowed to be charged or transferred to the new project, or any other sponsored project.

Questions

Program Income

CReATE

CReATE ver. 5/13© 2013 Florida State University. All rights reserved

PolicyApplies to externally-sponsored

projects

Does not apply to revenue generated by sources other than sponsored projects

Definition

Gross income that is directly generated by a supported activity, or earned as a result of a sponsored project.

Examples

Program Income includes, but is not limited to:

Conference/workshop registration fees; Fees for services performed, such as

laboratory tests; The sale of software, publications, research

animals; and License fees and royalties on patents and

copyrights.

Background Sponsors provide funding to cover costs of

conducting research, training, and public service-related activities.

Program income may be generated as a result of these activities and in some cases must be reported to the sponsor.

Federal regulations document the rules regarding program income.

F&A Costs

F&A should be included when determining the registration fee, price of materials, etc.

F&A will be charged to program income accounts at the same rate applied to the sponsored agreement which generates the income.

Treatment

Four methods of treating program income:

1. Additive Method – Income is added to the funds obligated by the sponsor (and the University if cost sharing is involved), and used to further eligible project activities or objectives.

2. Deductive Method – Income is deducted from the amount of project costs to be reimbursed by the sponsor.

Treatment (cont’d)

3. Matching Method – Income is used to finance the costs of a project not borne by the sponsor (i.e., used to fulfill matching or cost sharing requirements).

4. Additive/Deductive Alternative – Income received up to a maximum amount is added to the funds obligated by the sponsor. After the maximum amount is reached, the income is deducted from sponsor obligation.

Use of Income Program income revenue should be used before

expenses are reimbursed by the sponsor.

Program income must be spent in accordance with the award and OMB Circular A-21.

Expenses that are unallowable on the sponsored project may also be unallowable on the program income account.

Reporting

Program income will be included in official financial reports and/or invoices submitted to the sponsor by SRAS, if required by the terms of the award.

The following is not reportable as program income:

Royalty income. Income received on non-Federal awards that

contain no accounting or reporting requirements for program income.

ResponsibilitiesPrincipal Investigator

Ensure that any activity that could generate program income is disclosed to SRS/FSURF.

Maintain documentation related to the use of facilities or attendance of workshops, conferences, etc.

Invoice for fee, product or service and deposit income through SRAS or FSURF as appropriate.

Monitor account expenditure levels to ensure that program income is spent first as appropriate.

Ensure that costs charged to the program income account are allowable per OMB Circular A-21.

Responsibilities (cont’d)Chair/Director/Dean Ensure that any activity that could generate

program income is disclosed to SRS/FSURF.

Responsibilities (cont’d)

SRS/FSURF Advise investigators and University staff on the proper

handling of program income. Review the proposal for anticipated program income and

ensure sponsor applications forms are completed accurately.

Determine appropriate method of treating program income, if proposal is awarded.

Facilitate setup of, and increases to, program income budget when revenue is received.

Responsibilities (cont’d)SRAS

Determine the program income reporting requirements.

Process deposits and increase budget appropriately.

Monitor account expenditure levels to ensure that program income is spent first as appropriate.

Ensure that costs charged to the program income account are allowable per A-21.

Report program income as required by sponsor.

At project closeout, address program income account balance per the terms of the award.

Income Generated after Award OMB Circular A-110 specifies: “Unless Federal awarding

agency regulations or the terms and conditions of the award provide otherwise, recipients shall have no obligation to the Federal Government regarding program income earned after the end of the project period.”

SRS/ FSURF will advise the PI on the appropriate method of accounting for income earned after the award has expired.

Record Retention Retention of program income records is identical to the retention

requirements of award records which are specified in the of the award.

Documentation related to program income must be retained in the Department for a period of three (3) years following final payment by the sponsor, unless the award indicates a longer retention period or there is audit/litigation still in progress.

Examples of program income documentation include, but are not limited to:

Documentation related to how the registration fee, equipment usage fee, price of materials or publications etc., was determined.

Sign in sheets for attendees of workshops, conferences, etc.

Questions

Participant Support Costs

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CReATE ver. 5/13© 2013 Florida State University. All rights reserved

Purpose of PolicyTo ensure that funds provided for participant

costs are separately accounted for, and expended for appropriate and intended objectives.

Background

Participant support is provided by a number of federal agencies and other sponsors.

NSF has the most restrictive policies governing participant support costs. Therefore, FSU’s policy is based on NSF requirements.

Definitions Participants or trainees (but not employees) -- the

recipients of a service or training provided at a workshop, conference, seminar, symposium, or other short-term instructional or information sharing activity.

Participants may include students, national scholars and scientists, private sector representatives, agency personnel, teachers, and others.

Definitions (cont'd)

Participant supports costs -- direct costs for items such as stipends* or subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with meetings, conferences, symposia, or training projects.

* A payment made to an individual to provide for the participant’s expenses during the period of the training or other activities. A stipend is not considered compensation for services normally expected of an employee.

Policy Funds provided for participant support may not be

used by the University for other categories of expense without the specific prior written approval of the sponsor.

The University will set up a project budget for participant support costs separately from other funds awarded under the grant.

Participant support allowances may not be paid to trainees who are receiving compensation, either directly or indirectly, from other Federal government sources while participating in the project.

Policy A non-NSF Federal employee may receive

participant support allowances from grant funds in accordance with regulations.

Local attendees may participate in conference meals and coffee breaks; however, grant funds may not be used to pay per diem or similar expenses for these participants.

Participant support costs provided by sponsors other than NSF will follow the same requirements as specified in this policy unless an award specifies otherwise.

Budgeting for and Paying Participants

Guidance: “Non-Duty vs. Research Participant Payments” http://www.research.fsu.edu/contractsgrants/documents/exhibit_non-duty_vs_rschpart.pdf.

Proposal budget and F&A calculations.

Proper payment methods

Questions