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Administrative Procedure 8.926 Administrative Procedure 8.926
Administrative Procedure, AP 8.926
Administrative and Financial Management Requirements for Extramurally Financed Research and Training Programs/Activities of the University of Hawai`i (UH
Administrative Procedure Chapter 8, Extramurally Funded Research and Non-Research
Grants and Contracts
Administrative Procedure Section AP 8.926, Administrative and Financial Management Requirements for Extramurally Financed Research and Training Programs / Activities of the University of Hawai’i (UH)
Effective Date: March 2015
Dates Amended: January 2013; July 1988
Responsible Office: Office of the Vice President for Research and Innovation
Governing Executive Policy: EP 12.102, Authority to Sign and Execute Extramural
Research and Training Contracts/Grants, Agreements and Contract Assignments
Review Date: August 2018
A. To ensure that all administrative and financial management requirements for extramural contracts and grants are understood and complied with by all appropriate UH personnel. Special emphasis is placed on full compliance with applicable federal requirements which is mandatory.
No policy specific or unique definitions apply
III. Administrative Procedure
To establish guidelines and procedures which prescribe the administrative and financial management requirements for extramurally financed programs and activities, to delineate fiscal and administrative responsibilities and functions within the UH, and to provide reasonable assurance that sponsored programs and activities are managed in strict compliance with the terms and conditions specified under award agreements.
These guidelines and procedures shall apply to all sponsored agreements including those projects that have been service ordered to the Research Corporation of the University of Hawai‘i (RCUH) (see AP A8.930, “Service Orders to the RCUH”), and subawards and agreements with nonfederal sponsors that are financed directly from "flowdown" federal sources.
All sponsored agreements shall be administered at all times in strict compliance with federal laws, state statutes, UH policies and procedures, and the specific terms and conditions of a contract or grant award. If any federal statute expressly prescribes requirements that differ from those provided herein, the provisions of the statute shall govern.
C. The Essential Federal Requirements
For new awards issued on or after December 26, 2014 and for increments to existing awards issued on or after December 26, 2014, if the Federal awarding agency modifies the terms and conditions or does not specifically reference the OMB Circulars:
1. 2 CFR 200. This final guidance supersedes and streamlines requirements from the Office of Management and Budget (OMB) Circulars A-21, A-110 and A-133. See http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl for the complete text of this guidance.
For existing awards received prior to December 26, 2014 that do not receive incremental funding with new terms and conditions or sponsor prohibits application of 2 CFR 200:
1. OMB Circular A-21, Cost Principles for Educational Institutions.
This circular establishes principles for determining costs applicable to grants, contracts and other agreements between the federal government and educational institutions. These principles shall be used to determine the allowable costs of work performed by colleges and universities under sponsored agreements.
See www.whitehouse.gov/omb/circulars_a021_2004/ for the complete text of this Circular.
2. OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education.
This circular sets forth the standards for obtaining consistency and uniformity among federal agencies in the administration of grants to and agreements with institutions of higher education. It covers record-keeping, program income, cost sharing and matching, standards for financial reporting, monitoring and reporting program performance, payments, revisions of financial plans, close-out procedures, suspension and termination procedures, and procurement/property management requirements.
See www.whitehouse.gov/omb/circulars_a110/ for the complete text of this Circular.
3. OMB Circular A-133, Audits of State, Local Governments and Non-Profit Organizations.
This circular is issued pursuant to the Single Audit Act of 1984 and Amendments of 1996. It sets forth standards for obtaining consistency and uniformity among federal agencies for the audit of states, local governments, and non-profit organizations expending federal awards.
See https://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a133/a133.pdf for the complete text of this Circular.
4. Federal Acquisition Regulation (FAR).
The FAR provides uniform policies and procedures for acquisitions by executive agencies of the federal government. These federal regulations are applicable to contractual arrangements which the UH enters into with federal agencies that are acquiring goods or services. Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C. 6301, et seq. For discussion of various types of contracts, see Part 16.
See https://www.acquisition.gov/far/ for a complete text of the FAR.
5. Federal Demonstration Partnership (FDP) terms and conditions
The FDP is a cooperative initiative among participating federal agencies and institutional recipients of federal funds. Its purpose is to reduce the administrative burdens associated with research grants and contracts.
The Federal-wide research terms and conditions apply to newer awards.
The award terms and conditions will specify whether the FDP or Federal-wide research terms and conditions apply.
See http://www.nsf.gov/awards/managing/fed_dem_part.jsp for information on the FDP terms and conditions.
See http://www.nsf.gov/awards/managing/rtc.jsp for information on the Federal-wide research terms and conditions.
D. Fiscal Responsibilities and Administrative Functions within the UH
The primary responsibility for conducting sponsored research and training programs and ensuring that proper costs are charged in accordance with federal laws, state statutes, sponsor requirements and UH policies and procedures shall reside at the organizational level where transactions are initiated and controlled. This responsibility is shared by the Principal Investigator/Project Director (PI/PD), assigned Fiscal Administrator (FA), Chancellor/Dean/Director/Department Chairperson, as applicable (“Authorized UH Administrator”). (Note: "PI" is generally used in research projects, and "PD" is generally used in science and engineering education and other projects. However, some sponsors may use these terms interchangeably and appropriate substitutions should be made accordingly.)
1. The PI/PD shall be responsible and accountable for the satisfactory performance of scientific and technical work prescribed under the sponsored program or activity and the review of expenditures to ensure the allowability, allocability and reasonableness of all costs charged to the award in support of the project. The PI/PD shall be accountable for any program deficits and disallowances that may occur in the performance of work under the sponsored program or activity.
2. The assigned FA shall be responsible for controlling program expenditures within the sponsor's funding authorization in accordance with sponsor's requirements and UH policies and procedures. The FA shall also provide guidance and assistance to the PI/PD and staff concerning administrative and financial matters, particularly those relating to the allowability and allocability of program costs, sponsor's prior approval requirements if any, program financial status, delivery and coordination of administrative support requirements, proper recording of expenditures and cost transfers and the liquidation or cancellation of all outstanding encumbrances to ensure the timely closeout of projects.
3. The applicable Authorized UH Administrator shall have overall responsibility for the performance of work conducted by the PI/PD and shall monitor and ensure that all deliverables and performance requirements are satisfactorily completed within the sponsor's authorized funding and project period including the submission of the final technical reports. The applicable Authorized UH Administrator shall ultimately be responsible for all program deficits and cost disallowances under their jurisdiction including the securing of necessary funds to cover such costs.
4. The Property and Fund Management Office (PFMO) shall be responsible for the preparation and submission of the final equipment and inventory reports to sponsors including, the resolution of title transfers, final disposition of equipment and the monitoring of small business utilization reports to sponsors, if required.
5. The Office of Research Services (ORS) shall be responsible for the coordination, follow up and monitoring of all UH grants, contract and other award agreements with external sponsors including any revisions thereto. ORS shall be the focal point of contact for the UH and will serve as the liaison with external sponsors. All change requests to the sponsoring agency must be endorsed by ORS. ORS shall also be responsible for the review and monitoring of reporting requirements imposed by the federal government relating to patents, copyrights and inventions, and the submission of periodic and final technical/performance reports to sponsors. ORS shall be responsible for account establishment and maintenance, invoicing, letter of credit draw downs and financial reporting matters related to extramurally funded project accounts. ORS Compliance shall perform monitoring activities to ensure adherence with Federal laws, State statutes, sponsor requirements and UH policies and procedures.
E. Administrative and Financial Management Requirements
1. Allowability of Program Costs
a) The allowability of costs charged to federally sponsored programs shall be governed by the provisions of 2 CFR 200 Subpart E – Cost Principles and as noted in Section 4. above, OMB Circular A-21 sections C and J.
b) PI/PD shall review the sponsored project account activity in a timely manner (preferably monthly) to ensure that charges are properly recorded;
2. Post-Award Changes and Other Programmatic/Budget Revisions
a) A certain degree of latitude is generally permitted by most federal sponsoring agencies. Changes are generally limited to minor reprogramming of funds between budget categories and within the total authorized direct cost budget to meet unanticipated program needs.
b) Post-award changes requiring prior approval of the sponsoring agency are governed by the provisions of 2 CFR 200 Subpart D §200.308 and as noted in Section 4. above, OMB Circular A-110 Subpart C – Post Award Requirements Item .25
ORS shall be responsible for action on all requests for post-award changes which require sponsoring agency's approval including those institutional prior approval requirements that have been delegated to the UH by certain sponsoring agencies.
(1) The appropriate approval shall be immediately requested when there is reason to believe that revisions will be necessary to meet unanticipated program needs or to accomplish certain programmatic changes. All requests to funding agencies for any budgetary and programmatic changes must be initiated in advance and in writing by the PI/PD, reviewed by the departmental FA, approved by the applicable Authorized UH Administrator, and endorsed by ORS before submission to the sponsoring agency.
(2) For subawards, the prior approval authority is usually the prime recipient of the grant or contract. Any action or cost that is inconsistent with the purpose or terms of a federally sponsored agreement shall not be approved.
c) Although the project budget represents the best estimate of expenditures which will be incurred in the performance of the stated requirements of the award, a sponsoring agency may occasionally change the terms or otherwise modify a contract or grant. This may affect the allowability of purchases or other expenditures requested on the project. If a modification or new contract is forthcoming, ORS should be notified immediately.
When there is a degree of uncertainty for sponsor's approval of a modification requested, the PI/PD will indicate an alternate source of funds to cover unallowable expenditures if the modification is not granted. This enables project activities to proceed without delays introduced by the approval process. (Refer to AP A8.952, Advance Funding Accounts for Externally Financed Programs and Activities.) In the event the changes are not approved by the sponsor, the FA should submit a cost transfer to clear the unallowed cost(s).
d) Contracts and grants awarded under FDP terms and conditions delegate approval authority to the UH to facilitate some post-award administrative changes. These delegated authorizations are administered by ORS. However, the following post-award changes require the sponsoring agency's approval in all cases.
For awards subject to 2 CFR 200 (see section C. above):
(1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
(2) Change in key person specified in the application or the Federal award.
(3) The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.
(4) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with 2 CFR 200 Subpart E - Cost Principles.
(5) The transfer of funds budgeted for participant support costs as defined in 2 CFR 200.75 Participant support costs to other categories of expense.
(6) Unless described in the application and funded in the approved Federal awards, the subawarding, transferring or conracting out of any work under a Federal award. This provision does not apply to the acquisition of supplies, material, equipment or general support services.
(7) Changes in the approved cost-sharing or matching provided by the non-Federal entity.
For awards subject to OMB Circular A-21 and A-110 (see section C. above):
(1) Change of the PI/PD or other key personnel.
(2) A 25 percent reduction in the PI's level of effort.
(3) Absence of the PI for more than three months.
(4) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
(5) Change in the project budget period.
(6) The need for additional federal funding.
(7) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the Federal awarding agency.
(8) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.
In addition, some sponsoring agencies reserve the right to approve certain additional changes. Requests to the sponsoring agency for approval of any such changes must be endorsed by ORS.
e) Since it is not possible to cover all situations requiring prior approval, programs should consult with ORS or the authorized officer or official of the sponsoring agency whenever rebudgeting or other post-award changes are contemplated or if there are uncertainties regarding the allowability of costs or activities.
3. Continuation Accounts (Suspense Accounts)
A continuation account must be designated on all accounts with an expiration date and is used to accept transactions posted to an expired account. FAs shall review transactions posted to continuation accounts in a timely manner and transfer the amounts to the proper account. Campus level FAs are responsible for ensuring that balances in the continuation accounts are cleared by fiscal year end.
4. Expenditure Controls / Cost Overruns
FA s shall monitor allotments, expenditures and project periods to ensure that deficits and past due conditions are prevented or corrected. An expenditure recorded in a sponsored project account in excess of the approved project budget may result in a cost overrun. Cost overruns and inappropriate charges must be reversed or transferred to an appropriate non-sponsored account.
5. Cost Transfers
Cost transfers are an after-the-fact correction or reallocation to move costs from or to an extramural project account. With the FA's assistance, PIs shall review and reconcile all sponsored accounts in a timely manner. Cost transfers should generally be processed no later than 90 days after the date of the original transaction (preferably within 60 days after posting of original transaction) in order for the UH to prepare accurate financial statements and receive proper reimbursement from our sponsors. An explanation of why the cost was incorrectly charged in the first place, and why a transfer is necessary shall be provided. Documentation to support the authorization of the cost transfer shall also be attached, if applicable. If the transfer is to a sponsored account, certification that the charge is allowable, allocable and reasonable is required. Reason for any untimely cost transfers should also be provided.
6. Program Closeout
Refer to AP A8.954 – Extramural Closeout Procedures for The UH’s procedures related to closeout of extramural accounts.
7. Monitoring and Reporting of Program Performance
Sponsored programs shall be monitored to ensure performance requirements under grants and other agreements are satisfactorily met and that the overall program performance goals are achieved within the authorized funding and program period.
a) The PI and respective Chancellor/Dean/Director shall administer the monitoring and reporting requirements in compliance with 2 CFR 200.328 and Subpart C – Post-Award Requirements Reports and Records item 51 “Monitoring and reporting program performance” of OMB Circular A-110 and with any specific terms or conditions of a grant or award.
b) ORS shall coordinate submission and assist with monitoring that all technical and programmatic performance matters including reports are submitted in accordance with the applicable federal regulations or specific terms and conditions of grants and awards.
8. Retention and Custodial Requirements for Records
a) For Federal grants, financial records, supporting documents, statistical records, and all other records pertaining to sponsored agreements shall be retained for a period of at least three years from the date of submission of the final expenditure report or for Federal awards that are renewed quarterly or annually, from the date of submission of the quarter or annual financial report.
The following exceptions may apply:
(1) If any litigation, claim or audit starts before the expiration of the three year period, records shall be retained until all litigations, claims, or audit findings involving program records have been resolved.
(2) When notified by the sponsoring agency to extend the retention period
(3) Records for real property and equipment acquired with Federal funds must be retained for three years after final disposition
(4) When records are transferred to the sponsoring agency, the three year retention requirement is not applicable
(5) Retention for records for program income earned after the period of performance, if reporting required, starts from the end of the fiscal year in which the income is earned
b) For federal contracts, the retention period starts from the end of the fiscal year during which an entry is made charging or allocating a cost to the contract. When records generated during a prior contract are relied on for cost or pricing data for negotiating a succeeding contract, the retention period starts from the date of the succeeding contract. For federal contracts, if the above do not apply, then any other applicable period specified in FAR Subpart 4.7.
c) For all others grants and awards, the specific terms and conditions of the grant or award may apply.
d) Pertinent books, documents, papers, and records of the UH and its subrecipients shall be made available and accessible to the sponsoring agency, Inspector General and the Comptroller General of the United States or any of their duly authorized representatives for audits, examinations, transcripts and excerpts.
9. Methods for Collection, transmission and Storage of Information
a) In accordance with the May 2013 Executive Order of Making Open and Machine Readable the New Default for Governmental Information, whenever practical, collect, transmit and store award related information in open and machine readable formats rather than in closed formats or on paper.
b) When original records are electronic and cannot be altered, there is no need to retain paper copies.
c) Upon request, the sponsoring agency must provide or accept paper versions of the information related to the award. When original records are paper, electronic versions may be submitted provided they are subject to periodic quality review, safeguarded against alteration and remain readable.
IV. Delegation of Authority
There is no administrative procedure specific delegation of authority.
V. Contact Information
Office of the Vice President for Research and Innovation, telephone number: (808) 956-4740; and email firstname.lastname@example.org may be contacted for information
relating to this Administrative Procedure.
A. Link to superseded procedures: https://www.hawaii.edu/policy/archives/ap/
VII. Exhibits and Appendices
Vice President for Research and Innovation
March 20, 2015
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