The Office of Research Services The Office of Research Support Services 1 REVISED April, 2012 Post Award Primer and Terminology, Management and Reporting

The Office of Research Services The Office of Research Support Services

1REVISED April, 2012

Post Award Primer and Terminology,

Management and Reporting Tools, Closeouts and Audits

Sponsored Programs at Penn



The FDPFederal Demonstration Partnership

is a cooperative initiative among federal agencies and institutional recipients of federal funds. It was established to increase research productivity by streamlining the administrative process and minimizing the administrative burden on principal investigators while maintaining effective stewardship of federal funds.

Penn is a participating institution

Many of the recommendations of the FDP have been includedin expanded authorities.



Carryover Authority & SNAP

• Carryover Authority– Generally R’s, K’s and P01’s, but always

check the Notice of Grant Award.• SNAPStreamlined Non-competing Award Process

– Generally R’s, K’s– A grant must have carryover authority if it is

under SNAP



Importance of Expanded Authorities/FDP

Allows some administrative privileges authorized by A-110:

• Automatic carryover of unobligated balances across budget periods and competitive segments (except when noted in the Award)

• Up to one year no cost extension if requested 10 days prior to end of budget period (to complete project & not spend the $)



Importance of Expanded Authorities/FDP

• Waive most cost related and administrative “prior approvals” except:– Change in scope or objective of the project– Change in key personnel– Requests for additional funding– Other exceptions as noted

• Allows for 90 day Pre-award startup costs



Remember!• At Penn, grants with automatic carryover retain

same fund # for the entire segment.– An exception to this rule is subcontracts.

• All grants without automatic carryover receive a new fund # every new budget period.

Understanding this most basic concept helps you understand when a fund # should expire, require a

closeout, or when an advance account may be needed as the project continues.

IT IS VITAL TO UNDERSTAND THIS!!!!



Basic Terms to Know• Revenue

Recognition• PBIL and PBUD• FSRD and FSRI• Operating

Budget• Object Code

1220 Receivable

• Adjustment Period• MTDC• Encumbrance/

Unliquidated Obligation

• Unobligated Balance

• Letter of Credit



Revenue RecognitionRevenue• Our entitlement to be reimbursed by the

sponsor for the allowable expenditures of the grant

• An equal $ of Revenue is recognized for every $ of allowable expense in object code 4600 Grant Revenue

• Unallowable expenses and expenses above the award amount do not recognize revenue

• Revenue does not necessarily reflect the cash received from the sponsor

WHAT’S WRONG WITH CHARGING AN INDIRECT COST

DIRECTLY TO THE GRANT ?



Other Potential Sources of Revenue on a Grant Fund

• University Funded Cost Sharing - Object Code 4822• TIF (Interest) Income - Object Code 4780• Program Income - Object Code 4620

In the end(at closeout and disablement of the fund),

all sources of Revenue must equal Total Expense.



Grant Receivables(Object Code 1220)

• As payments are received from the sponsor, the Receivable decreases (a credit)

• As Revenue is recognized (a credit), the Receivable increases (a debit)

• Positive Receivable: Expenditures > Cash Received

• Negative Receivable: Cash Received > Expenditures



Grant Receivables(Object Code 1220)

LOCLetter of Credit funds have a zero receivable. The actual receivable resides in a special holding fund for all funds under the specific LOC.



Special Object Codes(entered by Research Services)

PBIL - The Maximum Billable Award

PBUD - Authorized Project Budget

FSRD - The Total Direct Costs reported to the sponsor

FSRI - The Total Indirect Costs reported to the sponsor



More on PBIL

PBIL• Serves as the control and limits revenue

recognition up to award amount• Gets reduced to reported amount and

guarantees that revenue recognition above reported amount does not occur

• Will always be rounded to nearest dollar. Cents will only show if there has been a carryover of funding from a previous fund (increase) or has been adjusted to the reported amount (decrease)



More on PBUD

PBUD

Most often equal to PBIL except on advance accounts



Operating Budget(Entered by Administrator)



Unliquidated Obligations/Unobligated Balance

• Unliquidated Obligations– Commitments of the budget period not yet

paid– When reported funding gets reserved in the

next budget period so they can be paid– Must liquidate within 90 days (A-110)– Can not be reported in the final period

• Unobligated Balance– unspent and uncommitted– may be able to carryover automatically or

with approval



Project Management and Reporting Tools




Project ManagementAgenda

• Communication

• Establishing the Project Environment

• Managing Monthly

• Monitor Expenditures

• Cash Management



Communication• Report monthly to PI

– Establish payroll distribution• Establish level of effort anticipated for each individual on

project – Be mindful of Salary cap limitations – Restrictions on spending

• Special Terms and Conditions within Award Notice – Monitor Subcontracts = Confirm amounts & work done

• Review each invoice (SPP #2131, #2135 Sub-recipient Monitoring policies)

• Communicate regularly with ORS– Extensions / Continuations and other project changes– Financial reports, delinquent sponsor payment– Inform Sponsor via ORS of any Programmatic changes– Assesses allowability of costs

http://www.finance.upenn.edu/vpfinance/fpm/2100/2131.asp




Support the Project

• Work with PI on on-going basis• Ensure that interim reports &

proposals are submitted on time• Disclose Inventions and Patents• Prepare for Progress Reports and

Non-Competing Continuations



Establishing the Project EnvironmentPayroll Set-up

• Identify who belongs on distribution

• Identify amount of funding and % effort

• Distribution Stop Date s/b set to the Account End Date

• Salary Encumbrances are calculated through the Current Budget End Date or Distribution Stop Date (whichever is earlier)



Procurement• Ben Buys Commodity Matrix

– Methods of Purchasing– When should C-1, C-1A, C368,

Purchase Order, or P-Card be used

• http://www.purchasing.upenn.edu/buyinfo/matrix.php

• Competitive BidsRequired on aggregate purchases > $5,000 unless purchase is with a University Contract Supplier or with a supplier participating in the Penn Marketplace.

http://www.purchasing.upenn.edu/buyinfo/matrix.php



Cost Share • Types of Cost Share

– Mandatory – costs required by terms of award that the University must contribute toward project in order for award to be made.

– Voluntary Committed – costs associated with project (identified in proposal or budget justification) for which funding has not been requested from sponsor.

– Voluntary Uncommitted – costs associated with project NOT identified within proposal or budget justification and NOT funded by sponsor.

– In-Kind / Matching - Refers to funds being matched in some proportion with non-sponsored project funds, or that the grantee participate to some extent in the cost of the project. Matching requirements may be in the form of an actual cash expenditure of funds, or may be an “in-kind” match, which is the value of non-cash contributions to the project.

• Tracking Cost Share Commitments– Costs must be expended as proposed and recorded throughout life of

project (separate fund ?)– Same allowability rules apply & same performance period as primary award



Program Income • Definition

– Gross income earned that is directly generated by a sponsored activity or earned as a result of the sponsored activity

• Some examples: Income from fees or services performed from external entities or within University, Revenue from sale of tissue harvested from project.

• Methods of Program Income– Additive = income is added to sponsor commitment.– Deductive = income used to reduce sponsor commitment.– Matching = income used to finance portion of departmental commitment.

• Tracking Program Income– Program income rec’d from external entities must be deposited into o/c

4620– Revenue earned by University dept for fees or selling goods or services to

another Univ. dept is consider internal revenue and must be recorded using o/c 5500.

– Program Income fund is to be set-up to account separately for the costs of collecting and spending the Program Income Awards in which Gross Program income may be off-set by the costs of collecting the income to enable reporting Net Program Income. ($5,000 threshold)



Issues Surrounding Specific Expense Categories



Equipment

• Definition – tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit

• Must be necessary for project purposes – During the award period

• Is not reasonably available for use elsewhere in the University• Award notice does not constrain equipment purchases• Must obtain necessary bids, unless sole source justification• Document whether Equipment is

– Government owned– Government furnished

• Disposition after the project has ended– Know sponsor regulations



Foreign Travel

• Foreign Travel must be included in proposal or otherwise be allowed by sponsor. Be sure to justify and document changes (approval, if applicable) if not in proposal– Department must maintain documentation in the file that supports the

trip’s purpose

• Foreign air travel paid with federal funds must be on US-flag air carriers– Limited exceptions and they can be found out:

www.access.gpo.gov/nara/cfr/cfr-retrieve.html#page1

• Exceptions, which must be documented, generally include:– US-flag air carrier does not go to destination– Total trip time extended more than 24 hours– Lay-over extended more than 6 hours– Foreign carrier eliminates 2 or more changes

http://www.access.gpo.gov/nara/cfr/cfr-retrieve.html



Consultants• Evaluate: Consultant, Employee or Subcontractor?

– Use C-12 Independent Contractor Determination & Certification

http://www.finance.upenn.edu/comptroller/tax/contractor_certif.shtml

• Consulting agreement needs to be completed and forwarded to ORS for approval & signature

• Document role of consultant– Needs to be working towards goals of project to which he/she is

charged• Review sponsor guidelines for consultants

– Ensure approvals are obtained, if applicable– Consultant rates may be limited for some sponsors





Purchases• PI approval process for purchases

• Assess allowability, allocability and reasonableness

• Verify budget and availability of funds

• Procure bids

• “Buy American” on federal awards when possible • Don’t buy capital equipment at end of project



Service Centers• Definition:

– A department or functional unit within a department, which performs specific service for a fee

– Examples: Cell Sorting facilities, Resonance Imaging facilities, and Animal Care facilities

• ORS responsible for review & approval of rates– Services provided charged based actual use of services– Charges for services allocated monthly

-Financial Policy #2115 University Service Centers

• Make sure Service Centers use correct fund account• PI & BA should review Service Center charges regularly

– The BA may not know what services were provided, or if the amount charged is appropriate



Manage Monthly

• Plan expenditures in advance– This will make the project easier to manage throughout life

of project• Run and analyze appropriate reports

– Financial Policy #1402.5 Monthly Closings/Reporting• Send detailed reports to PI• Remove unallowable and wayward charges• Compare expenditures to projections• Manage changes through full system

– Changes in award value affect payroll– Changes in subcontracts or equipment affect F&A charges



Manage Project Changes Proactively

• Use proposal as “home base”

• Anticipate necessary changes– Contact ORS for approval– Get sponsor approval through ORS– Change of scope or effort

• Plan ahead for extensions



Monitor Expenditure Rates

• Sponsors question unusual expenditure rates

• Have we changed scope of work?• Are we still breathing?

• Communicate with Sponsor (cc ORS)



Cost Transfers• The transfer of costs to sponsored projects

where the costs initially had been incorrectly charged to another account. Any cost transfers that occur need to be properly justified and documented.

• University Financial Policy Number 2113 Cost Transfers and Payroll Reallocations states "Cost transfers must be prepared and submitted within 90 days from month end in which the transaction appears on the fund." Failure to adhere to this policy may result in the University disallowing the transfer which would result in a write-off to the administering department.

http://www.finance.upenn.edu/vpfinance/fpm/2100/2113.shtml



Cost Transfers

• Must be an allocable, allowable and justified charge to the particular award

• Department must maintain documented justification for transfer

• Must be made within time constraints



New Cost Transfer J/E Categories

• On 7/1/2010, an additional BEN Financials Journal Entry Responsibility titles Journal Entry – G&C Costs Transfers was introduced to improve monitoring, tracking and compliance with the University’s cost transfer Financial Policy # 2113.– Initially added 15 G&C UN90 and 16 G&C OV90

• On 10/4/2010, updates were made BEN Financials Journal Entry Responsibility to add 2 additional Categories.– 17 UPHS Gds/Svs– 18 UPHS Payroll





Cost Transfer Principles• Cost transfers are for correcting legitimate

ERRORS

• Cost transfers should NOT be used as a means of managing cash flow

• Project funds are NOT interchangeable– Integrity of each grant account must be maintained

• Allowability of costs must be maintained



Cost Transfers• Documentation

– Supported by full explanation and justification, as well as a certification of the propriety of the transfer

– Explanations such as “to correct error” or “to transfer to correct project” are not sufficient

– Approval can be documented by• PI signature• Printed e-mail messages from PI



Cost Transfer “Red Flags”• Transfers made in excess of 90 days after the original

charge

• Improper J/E Categories (15 G&C UN90, 16 G&C OV90)

• Transfers without a full explanation

• High volume of transfers

• Timing and “route” of transfers

• Late transfers to funds with unexpended funds

• Transfers from funds with overdrafts to other 5 fund(s)

• Transfers between funds with scientific overlap



Advance Accounts for Continuation Awards

• Recommended for non-competing renewals requiring new fund #’s for each period

– Department requesting the advance account bears the risk of having to fund any costs incurred if the funding never materializes

– Med School sets up NIH advances for full budget period– All other Schools set up Advances for 3 month period



Monitoring Accounts Receivable

• For Letter of Credit awards, check revenue & cash received. There should be no cash on hand.

• On Letter of Credit, confirm that PBIL is correct

• Contact ORS to address payment problems with sponsors– Departments should review AR and contact ORS regarding

aged receivables of concern• For awards on payment schedule, contact Bob Speakman• For all other awards, contact Gokila Venkateswaran• For Med School awards, ORSS representative is Danielle DiIanni



Checks, Payments and Project Budget Increases

• Hand carry check to ORS immediately, with project identification – Do not deposit check

• Should AIS be increased because of check?



Run and Review Reports• BEN Reports

– 102.ORG – Summary CNAC-ORG-FUND level– 115.ORG – Fund Summary– 133.ORG – Due to Close– 134.ORG – Summary of Final Expenditure Report

• Data Warehouse– Fund Summary– Org Summary– Corporate Documents

• Payroll• Correct Errors



Reporting Tools“There are so many reports I’m not sure where to look first.”



GRAM / BEN Reports

• Reports used primarily by Principal Investigators

• Reports represent a Current Budget Period perspective

• Not easy to determine PJTD Numbers or amount to close out at (other than Budget Available)

• Critical for Operating Budget to be posted to the Budget Period Start

GRAM – The online PI view



• Actual Spent represents Current Budget Period Only• Further Detail can be clicked on, but none is available for Prior

Budget Periods



Management of All Grants in ORG

BUSINESS OBJECTSORG Summary by Fund, PI, Acct End, receivables, overdrafts, funds freezing, late/due FSR’s, Analysis of expired funds, Illegal object code charges, possible F&A direct charged to Fed grants, payroll compared to budget.Grantmonitor PBIL/PBUD/Budget, NCC Due, Awards Due, Revenue Check, Overdrafts (active and expired), Federal Cash, CT Cash, Residual Balances, ReceivablesSubbudgets our charges to othersOtherorgschgsORG Wayward Summary.repORGpersonnel. all current distributions of home dept orgAward Analysis- Award DatePT-Requests (all proposals submitted for any time period)JE inquiry (by batch between dates)FY Grant ORG Expense AnalysisEffort Report – Home Dept ORGObject code by fund – posted orgObject code by fund – detailAIS (full search)

Protocols – Org/ Protocols – PI

BEN FINANCIALS

132.ORG List of Terminated G&C Funds133.ORG List of G&C Funds Due to Close138.ORG Frozen Fund List201.SCH PJTD Rev/Exp for G&C/URF202.SCH YTD Rev/Exp Totals for Funds211.SCH PJTD Rev/Exp Outline for G&C/URF212.SCH YTD Rev/Exp Outline for G&C/URF301.BUD Budgetable Amount - Grants/Contracts306.BUD Negative BBA ORG/FUND/CREF PJTD



Fund Level Management

BUSINESS OBJECTSfundsummaryfundsummary with BRIMfundsummary (w date range) summary by ORG/CNAC SNAP/NCC estimated unobligated balance

Fund Detail monthly matrix all expense monthly matrix personnel paid

FUNDpersonnel – all current distributions on fund

Effort Report – Fund

GRANT REPORTS (-Resp Org, -PI, -CREF, -PI Awarded) PI friendly & monthly payroll and expense detail

BEN FINANCIALS

102.ORG Summary G&C by CNAC/ORG/FUND103.ORG Summary G&C by CNAC/ORG/FUND/CREF115.ORG Grant Fund Summary Report130.ORG PI Report by CNAC/ORG/FUND134.ORG Summary of Final Expenditure Report (available for grants in adjustment period)137.ORG Grant/Contract Budget Period Summary



Expense DetailBUSINESS OBJECTS

Fund Detail. Payroll by Obj, by Person,Exp Detail by Object, Org, Acct Period, P.O./UserFund Detail – PI monthly matrix of personnel paid on PI grantsPayroll.(any fund any period of time) variations include: All grants of PI All grants of Resp OrgPersonnel.(any person, any period)Personnel-one (any person’s current distrib)Detail. variations include: All grants of PI All grants of Resp ORG subcontracts object special budget operating budget cash depositsEncumbrances(Fund)ORG Wayward Detail

BEN FINANCIALS

150.ORG Detail by CNAC/ORG/FUND151.ORG Detail by CNAC/ORG/FUND/CREF152.ORG Detail by CNAC/ORG/CREF153.ORG Detail by CNAC/ORG/FUND/PROG155.ORG Detail Extract156.ORG Detail by CNAC/ORG/FUND/PROG/CREF160.ORG Account Analysis with payables detail163.ORG Open Encumbrances Report301.BUD Budgetable Amount - Grants/Contracts304.BUD Negative BBA ORG/FUND YTD305.BUD Negative BBA ORG/FUND/CREF YTD306.BUD Negative BBA ORG/FUND/CREF PJTD315.BUD Posted Budget Journal with Exceptions507.GA Posted Journal Activity Report508.GA Unposted Journal Activity Report510.GA Detail Transaction by OBJECT by ORG



Your assignment• Full documentation of the Business Objects Queries

is available at:http://www.upenn.edu/computing/da/dw/financial_queries.html

Select “Grants Management”

• While we will discuss and give samples of some of the more popular reports today, it is essential that you GO BACK TO YOUR OFFICE AND PLAY WITH THE REPORTS!!! Decide what tools/reports work best for you and your investigators.

http://www.upenn.edu/computing/da/dw/financial_queries.html



Award Analysis – Award Date



FY Grant ORG Expense Analysis



ORG Summary



ORG Summary - Analysis of Expired Funds

Why isn’t my fund disabled?



ORG Summary – possible F&A



Grant Reports

PI Summary Tab



Grant Reports

PI Detail Tab



Grant Reports

Payroll Encumbrances Tab



Grant Reports – PI

Taken from the “PI Matrix –all” Tab



Grant Reports – PI.rep

Taken from the “Personnel Matrix” Tab. Note: this covers one period only. Fund Detail –PI.rep could do this for a range of dates





fundsummary – Award History tab



fundsummary - SNAP/NCC Estimated Unobligated Balance

Make sure the formula toolbar is checked under View Toolbar.



fundsummary.rep – Cref Matrix



Fund Detail.rep

This is the “Acct Per. Summary Tab”. There is also a Pay Summary Tab as well as numerous tabs to sort payroll information and expense detail information. Variations of this include: Fund Detail-PI.rep and Fund Detail - cref detail.rep, and fundsummary (w date range)



GrantMonitor

This tab of the GrantMonitor can help identify NIH noncompeting Progress Reports that might be due. There are also separate tabs which can identify when Subcontracts Progress Reports are due and also T32’s based on which Institute the award is with.



JE Inquiry (by batch between dates)

Note the 3 tabs which are specifically designed for grant entries done by Res Svcs (8760) or the Comptroller’s Office (8720)



AIS (full search)

Ability to search on multiple criteria



AIS (full search)

The “New AIS Summary” Tab can give a summary of AIS’s issued in the last 35 days



AIS (full search).rep



Effort Report – Fund.rep



Effort Report – Fund.rep



Protocols – Org.rep

This tab gives a summary of protocols by fund #. There are also separate tabs for Human Protocols by PI, Animal Protocols by PI, Protocols by #, and Expired Protocols.



Identifying Waywards – 115.ORG

The 115 shows a possible wayward charge from ORG 4227 Cardiology. To obtain the detail of the charge a 15X.ORG report can be run entering the ORG making the charge in the Accounting Period the charge was made.



Otherorgschgs.rep & Waywards.rep



In Summary

• Award must be reviewed on a regular basis

• Communication is vital to the proper administration of the award

• When you are not sure, investigate and ask

• If an award is properly managed, the closeout process is very simple



Closeouts and Audits of Sponsored Project Funds




Closeout of Sponsored Project FundsAgenda

• PI & Department responsibilities– Communication– Pre-closeout review– Adjustment period– Freeze/unfreeze grants– Technical & invention reports

• ORS responsibilities– Unfreeze requests– Financial & non-financial reports– Disabling accounts

SPP # 2126 Interim & Final Financial ReportsSPP # 2128 Account Close-out





What is the Adjustment Period?

• Period of up to 60 days after Account end date– Allows for final review of project activity so adjustments can be made prior to final

reporting• 30/31 days: Account End Date + 15 days• 45 days: Account End + 30 days• 60/61 days: Account End + 30 days• 90/91 days: Account End Date + 60 days



Adjustment Period (cont.)• Run 134.ORG Report in BEN Financials or

Fund Summary in Business Objects

– Review the following areas• PBUD/PBIL should be equal• Revenue vs. Expense

– Should be equal– If not, requires further review– F&A and Employee Benefits (EB) – Were

the correct rates appropriately applied?



Adjustment Period (cont.)– Review the following areas (cont.)

• Payroll – Any adjustments that may be needed must be made by the end of the adjustment period

• Service Centers – Were these handled appropriately

• Cost transfers over 90 days that were done without prior approval

• Other direct costs for allowability



Final Review Prior to End of Adjustment Period

• Review PBIL/PBUD, NOGA and approved carryforward, if applicable

• Review subcontracts and respective closeouts• Communicate with ORS Accountant

– Outstanding reporting/receivable issues • Determine and address

– Unliquidated and unobligated carryovers• All adjustments must be processed by end of

the fund adjustment period – Complete all approved, allowable, allocable and

appropriate adjustments identified during pre-closeout review



Best Practices for Communications

• Emails - the subject line of your email should be informative– “Action Fund#, P.I., Description– Examples:

• “Closeout 538500, Mendel, 5K23MH024680-03” • “Unfreeze 538000, Frankenstein, 5R01HG012345-05

• One email per fund action• Email ORS Accountant and notify them of the

Direct, Indirect, and Total Expenses to report hopefully by the end of the adjustment period but no later than 1 week before report due date.



Freeze/Unfreeze Grant Functionality



Freeze Grants Functionality• Tool that allows authorized research

administrators and ORS to limit activity against an award– Can be used during life of project and

during the adjustment period– Can reduce cost transfers and overruns

after the end of the fund project period– Improve timeliness and accuracy of final

financial reports



Freeze Grants Features• Awards are frozen/unfrozen at fund level

– Payroll can be frozen manually prior to the Account End Date

– Functionality frozen automatically after Account End Date• New Purchase Orders/Requisitions

– Functionalities frozen automatically after Adjustment Period End Date (APED)• Manual Journal Entries• C-forms• Feeder Journal Entries• Payroll



Unfreeze Request (cont.)

• Are not necessary to:

– Prepare budget journals– Pay already encumbered amounts on

an existing P.O.– Unfreeze advance accounts (request

an extension of advance account)



Unfreeze Grants (cont.)• Submit your request to:

– School of Medicine departments• Send worksheet and details (including documentation)

to Office of Research Services Support (ORSS) Grant Manager with a cc to ORS Accountant

• ORSS will review and, if approved, will forward to Research Services Accountant and cc Assistant Director

– All other Schools• Send worksheet and details to ORS Accountant and cc

Assistant Director

– Unfreeze requests are normally addressed within two business days



ORS Responsibilities



ORS Reporting Period Tasks• Reviews Due Reports to determine report due date• Email will be sent requesting closeout information• ORS Accountant reviews the following;

-Terms and conditions of award and sponsor reporting requirements

– Review the 734 report in Business Objects (similar to 134.ORG report in Ben Financials)

– Check PBUD/PBIL for accuracy– Reconcile EB’s, F&A and Cash– Review 252 report for stale dated checks



ORS Reporting Period Tasks (cont.)• Review expenses posted to the fund for

allowability– Revenue

• 4600, 4620, 4630, 478X, 4822, TIF, Program Income & Other Revenue

• Review remaining balances or deficits

• ORS will communicate any issues identified and request a response from the BA

• If the ORS Accountant does not receive a

response regarding closeout the report will be issued and an email will be sent stating what was reported to the sponsor.



ORS Reporting Period Tasks (cont.)

• Overdrafts– ORS will contact department regarding

resolution– If no response is received by report due date,

fund will be reported up to award amount and ORS will process journal to transfer resources from departmental fund to grant fund to offset overdraft via object code 4822

SPP # 2129 Chargeback of Overdrafts and Disallowances






• Unexpended Balance

– Will be reported to sponsor– Carryover will be processed and/or requested as

appropriate– Residual cash will be remitted to sponsor according

to agreement– Carryovers and/or unliquidated obligations will be

determined and handled as appropriate




• Final Financial Status Report (FSR)/(FFR) Submission– Financial report will be issued by ORS no later

than due date – A copy will be sent to department and a copy will

be scanned into our imaging system (Acorde)– ORS will process any closing entries based upon

final reports



Revised FSR/FFR’s• Only done in rare circumstances• When revising to increase total expenses, most

sponsors will only accept revised reports for limited period of time following the end of the award. Some agencies will not accept upward revised FSRs.

• When revising to decrease total expenses, there is no time limit. These should be completed immediately upon identification of the need for a revised FSR.

SPP # 2137 Revised Final Financial Reports




Disabling Funds• How does a fund get Disabled?

– ORS runs 717.RA report in BEN Financial weekly • To identify funds that meet disable

requirements

– If the fund is eligible for disabling ORS checks “Enable” flag • Enters date in BEN Financials



Requirements to Disable Funds

1. Financial Report must be submitted if required-Last FIN Report Filed=Next FIN Report Due

2. FSRD and FSRI s/b posted reflecting Direct and Indirect Costs reported

3. PBIL=PBUD=FSRD+FSRI=Total Expenses reported and on the G/L

4. No Encumbrances can remain5. Object Code 1220 Receivable must =06. Equipment in Object Code 183X/187X must be

transferred to School Surrogate Accounts via an Object Code 4826 Equipment Transfer

7. BRIM (ORS billing system) is reconciled (requires ORS action)

8. All stale dated checks have been satisfactorily addressed



Miscellaneous - Cost Sharing (con’t.)• Cost Sharing

– How is it recorded in our system?• Must be separately accounted - a 5 fund must be

established if Cost Share > $10K– What needs to be done at closeout?

• Mandated cost sharing must be reported to the sponsor

• How is it managed?• Expenses should be recorded and monitored on a

timely basis• Revenue entries must be routinely performed

SPP #2119 Cost Sharing/Matching Requirements




Miscellaneous – Interest Bearing Funds

• Interest Bearing Funds– When does an award fund receive interest?

• Monthly basis– How do I know if my fund is interest

bearing?• T&C of award determine

– Can I spend these funds?• T&C of award determine

– At Closeout, what happens to these funds?• T&C of award determine



Miscellaneous – Program Income

• Program Income– What is Program Income?

• Gross income earned & directly attributable to the sponsored activity

– How is Program Income handled? • Additive vs. Deductive

– How is Program Income handled at closeout?SPP #2121 Accounting for Program Income




Miscellaneous –Record Retention

• What do I need to retain?

• How long do I need to keep it?

• SPP #2132 Record Retention





Miscellaneous –Award Transfers

• If a PI is planning to leave the University, ORS staff should be contacted as soon as possible to expedite the process

• “Statement of Relinquishment” or similar document– Required information must be verified– ORS signature must be obtained– Estimated unobligated balance-funds awarded on NOGA

for current year only exclusive of any amounts carried over– Not finalizing costs may delay transfer of funds to the next

University– Any property being transferred must be addressed



Non-Financial Close Out Issues

• Final technical and/or progress report

• Final invention statement

• Final property report



Getting Assistance on Closeouts

• For financial matters: – Contact ORS accountant or Post-

Award Assistant Director

• Regarding extensions, requests for budget or other modifications to agreement, or non-financial matters:– Contact your Contract Administrator



Questions???



Audits




Pre-Award Audits• Performed by agency to verify

– Accuracy of costs on application– Adequacy of University systems and

controls• Usually performed by or at the

request of the sponsor• Federal Awards

– DHHS is Cognizant Agency– Sponsoring Agency



Agency or Programmatic Audits

• Performed on Active or Terminated awards

• Federal Awards normally a result of a request by the Sponsor– Review by Dept of Health & Human

Services (DHHS) – Foundations and Associations– Other



Investigative/Criminal Audits

• Usually based on allegations of fraud– Misuse of funds on awards including:

• Purchasing Card charges• Petty Cash abuses

– Audit of how we comply with regulations– If Federal OIG audit

• Subpoena powers



Internal Audits

• University audits projects to

– Evaluate system controls– Assess compliance with University and

sponsor policies and applicable OMB circulars

– Investigate reports of fraud



Compliance Audits

• Assess compliance with – Sponsor regulations– University policies

• Human Subject/Animal issues



F&A Cost Proposal Audits• Audit occurs cyclically

– During the F&A negotiation process• F&A recovery rates are affected by

expenditures• Interviews of PI and BA to determine

basis for assigning space to research– Space drives the rate – 32.5 points of 57% rate



OMB Circular A-133 Audit

• Required annual audit of federal grants & contracts

• Performed by independent auditors– Penn: PricewaterhouseCoopers (PwC)

• Audit of systems and transactions• Cost Transfers, Effort Reports, Subcontracts, Service

Centers, Technical & Financial Reports



General Principles for Audits

• Good award management is the key to good (uneventful) audits

• Good documentation is essential in– Department and ORS

• Audits are everyone’s responsibility– PI, BA, School, Pre and Post-award in

ORS– Don’t go in alone



• Audited on compliance with all applicable regulations & policies– Federal– State– Sponsor– Specific award terms– University

General Principles for Audits (cont.)



General Principles for Audits (cont.)

• Audited on consistency of policy application

• Audits may provide feedback for process improvement

• Audit results can be expensive• ORS & PI have a responsibility to

educate the auditor about the purposes of the project



Preparing for Audits• Notify ORS as soon as you learn of audit

– SPP #2130 External Audits

• ORS & PI/BA meet to prepare for audit– Anticipate questions – Develop procedures for working with auditors

• File management• Prepare and support the PI

– Work to prevent adversarial relationship

• Don’t panic




Audit Lessons Learned



Critical Audit Concerns

• Salary Charges on Awards– Effort on award must equal or exceed

salary charged– Effort must be documented in

Personnel Activity Report form– Payroll Reallocations

• Same as Cost Transfers– Communicate with PI



Critical Audit Concerns (cont.)

• Cost Transfers– Auditors view them as corrections of errors– Explain why the error occurred– Establish correlation of charge to next grant– Provide documentation– Maintain documentation in file– Cost Transfers must be prompt and justified– “Parking” a charge is illegal




• Documentation– Costs that deviate from the proposal must

be justified in terms of the project– Maintain all approvals from sponsor– Explain why decisions were made– PI must approve costs incurred on award




• Consultants– Document relationship with consultants

• Do not circumvent IRS employee regulations• Do not engage an employee of sponsor or Penn

employee as a consultant– Consulting agreement (work for hire) must

document scope of work, rate and payment terms

• Proper inventory of equipment– Tag & document transfer, move or disposal




• Service Centers are reviewed (A-133 & F&A proposal)– Surpluses are problematic

• Are federal awards being overcharged?– Rates must be adjusted to off-set the surplus– At least annually adjust to compensate for

surplus or deficit– Maintain documentation of charges– Maintain records of rate determination

SPP #2115 University Service Centers





• Subcontracts– PI must monitor subrecipient performance

and expenses– Subrecipient must verify that it is not

debarred or suspended– ORS monitors subrecipient audit reports

• If findings result from expenditures of subcontract, Penn department is responsible for the cost of findings.




• Close-Out– Penn must submit all required reports

• Programmatic, Financial, Patent, Property– Timeliness of reports



If you are contacted by a sponsor regarding an audit…

…Contact ORS Executive Director



Questions???



Resources




ORS Website and Resource Tour• http://www.upenn.edu/researchservices/

– Homepage– Left Quick Links– Sponsored Projects Manual– Sponsor Links– Spotlights– ORS Newsletters and listserv– Brown Bags and other Training

Opportunities

http://www.upenn.edu/researchservices/