Post Award
Accounting at Caltech
New Grant Manager Training
October 28, 2004
Overview
Organization and
responsibilities
Account structure/types
Monitoring accounts
Useful expenditure types
2
Post Award Accounting
Responsibilities
PROJECT ACCOUNTING
Budget Realignments
Billing
Cost Transfers
Cost sharing
Financial reporting
Closeouts (financial)
Fabrication accounts
JPL/Caltech accounting interface
NIH Salary cap
Monitoring awards
(in conjunction with campus)
Responding to internal and external
audits
COST STUDIES
Payroll Distribution (aka effort
reporting)
F&A rate development and
negotiation
Service centers
Space surveys
3
Organization Chart
Tracey Fraser
Director
Project Accounting & Cost Studies
ext. 2540
Evy Graves
Assistant
ext. 6737
Deston Halverson
Associate Director
Project Accounting &
Cost Studies
ext. 3877
Robert Kuppens
Associate Director
Project Accounting
ext. 2558
PMA & GPS
BIOLOGY
Moses Nurtjahja
ext. 6756
Karl Oracion
ext. 2695
Erlinda Bandoy
ext. 2382
Renee Bright
ext. 8104
Grant Hovakimyan
ext. 8159
Karel Zumbrunnen
ext. 8545
Sandie Glaze
ext. 2697
CHEMISTRY
ENGINEERING,
HUMANITIES &
CACR
Mabel Chik
ext. 6755
Virgil Swanier
ext. 6865
Kathy Kelly
ext. 6763
Stephanie Solario
ext. 2135
Pablo D'Angelo
ext. 6679
Carolyn Griffiths
ext. 3122
Regina Jackson
ext. 2581
JPL
COST STUDIES
Lydia Boston
ext. 8115
Estella Venegas
ext. 2580
Lisa Frenchie
ext. 3595
Ted Lieu
Manager
ext. 2579
Andres Chan
ext. 2575
Kevin Nguyen
ext. 8015
Martin Madrigal-Diaz
ext. 2589
Stan Baires
ext. 8013
4
Organization
Who is the Accounting Specialist on a particular award?

http://www.atc.caltech.edu/support/queries.html


POETA-Alias Queries
Award Information
 Type in award number
 Award Detail summary screen will appear
 Scroll down to Award Personnel
Note: This screen is also useful because it
includes all linked awards
5
Account Structure/Type
Structure
Cost Sharing
JPL Research accounts
JPL Service accounts
Fabrication accounts
6
Account Structure - What is
POETA?
Project - Projects are funded by Awards
(Two kinds of Projects, Capital and Non-Capital)
Organization in POETA, will default to Caltech
Expenditure Type
Task - A Project is made up of one or more
tasks. All expenditure occurs at the task or subtask (i.e., breakdown of a task into a smaller unit
of work) level
Award - Awards fund Projects
7
Account Structure – What Is
Work Breakdown Structure?
Organization of an activity into a hierarchy
of one project and one or more tasks
Award 1
Award 2
Project 2
Project 1
Task 1
Award 3
Task 1
Task 2
Project 3
Project 4
Task 1
Task 1
Sub
Task
2.2
Sub
Task
2.1
Sub-sub
Task
2.2.1
Sub-sub
Task
2.2.2
8
Cost Sharing
Committed cost sharing on a sponsored
project is a binding obligation that must be
satisfied in accordance with the sponsor’s
requirements
Offer cost sharing only when required by
the sponsor
http://atc.caltech.edu/Finance/pa_policies.htm
9
Types of Cost Sharing
Committed

Must be tracked, documented, and in some
cases, reported
Uncommitted

Does not have to be tracked or recorded
10
Cost Sharing
Federal Requirements
Do not use federal funds
Use only once
Costs must be verifiable, necessary,
allowable and reasonable for the award on
which they are being claimed
11
Cost Sharing
Procedure
Establishing a linked account or specific
task within a PTA to track cost sharing is
not mandatory under the terms of Caltech’s
policy

Depends on the Division
In all cases a manual worksheet, the
Committed Cost Sharing Worksheet, will be
prepared and distributed by OSR (based on
information included in the proposal and the
award document)
12
Cost Sharing
Procedure
PA will contact the grant manager on an
annual basis to obtain an update of the
status of cost sharing and to review any
supporting documentation

Will require account detail of where the cost
sharing was charged and require specific costs
to be identified within that account
PA will submit any financial reports due to
agency or prime contractor
13
JPL Interdivisional
Authorizations
What is an Interdivisional Authorization?

Authorization for Caltech to incur expenses
for providing a service to JPL and a means for
billing JPL for those services (i.e.,
transferring funding from JPL to Caltech)
14
JPL Interdivisional
Authorizations
There are 2 types of IAs
1.
2.
Research IA
Service IA
Set-up process depends on the type of IA
15
JPL Research IA’s
Generally involve a member of the
Caltech faculty
Set-Up


Must prepare a budget and statement of work
that is reviewed by Caltech’s Office of
Sponsored Research
Should conform to all the usual requirements
for proposal submission, e.g., Divisional
Approval Form
16
JPL Research IA’s
JPL Contract Management Office (CMO) will
only issue an IA to authorize payment for the
work after the proposal has been submitted and
reviewed
For more information refer to OSR website

http://atc.caltech.edu/OSR
Billings and Close-Outs

Processed by Project Accounting

Divisional teams
17
JPL Service IA’s
Generally do not involve, or are not supervised by, a
member of the Caltech faculty e.g., services provided
directly to JPL by MPS, technicians, shops, service
centers, etc.
Set-Up




Complete template detailing budget and statement of work
Submit to Lisa Frenchie in Project Accounting (M/C 21115)
Template and instructions are available on the Project
Accounting website under forms
http://atc.caltech.edu/Finance/pa_forms.htm
18
JPL Service IA’s
Reviewed by Project Accounting to verify


Salary rates (JPL will not accept a different
salary rate than Caltech rate)
Correct overhead rate



Work performed at campus (59.3%)
Work performed at JPL (26%)
Staff benefit rate
19
JPL Service IA’s
JPL CMO will only issue an IA to
authorize payment for the work after this
paperwork has been submitted and
reviewed
Billings and Close-Outs

Processed by Project Accounting

JPL team
20
JPL IA’s
Be aware of restrictions on charging to JPL
IA’s (both service and research)

Equipment
Must be preauthorized and specifically identified in
the IA
 Equipment threshold is lower than Caltech’s ($1,000
compared to $5,000)


Foreign travel

Must obtain prior approval
21
JPL IA’s
Deobligations
Not uncommon
 JPL CMO will only de-obligate after obtaining
written concurrence from Caltech PI
 A revised IA will be issued deobligating the
funds

22
Fabrication Accounts
Fabrication policy
http://www.atc.caltech.edu/finance/
Fabrication set up form
http://www.atc.caltech.edu/finance/
23
Fabrication Accounts
Definition
“An equipment fabrication is the transformation
of materials, supplies, hardware costs and direct
labor (including associated fringe benefits) into an
item of equipment that:





Does not currently exist
Meets unique research specifications
Has a total estimated cost in excess of $5,000
Has an estimated useful life of at least 2 years
When completed, will not be affixed permanently to a
building or structure”
24
Fabrication Accounts
Fiscal Implications
Costs charged to a fabrication account are
not burdened (i.e., overhead rate is not
applied), regardless of expenditure type
Fabricated equipment that is eventually
capitalized in Oracle Fixed Assets will
include all costs charged to the fabrication
PTA (including labor, travel, etc.)
25
Fabrication Accounts
Chargeable Costs
Costs charged to a fabrication PTA must be
integral to the construction of that
fabrication (may include labor costs)
Must be in compliance with OMB Circular
A-21
Must not be prohibited in the awarding
document
26
Establishing A Fabrication PTA
Fabrication PTA’s should be
established as far in advance as
possible to prevent initial costs being
charged to a non-fabrication account
Division representative completes an
equipment fabrication request form
27
Establishing A Fabrication PTA
Information required on the fabrication set up form
includes:
 Description
 Ownership (Caltech/Gov’t/Other)*
 Ultimate destination*
 Estimated placed in service date (the best judgment of
the PI of the point in time at which an equipment
fabrication will become operational)
 Estimated cost
 Must be signed by the PI or the division representative
*It is extremely important that the issue of ownership and final destination be known and appropriately
identified at the time of account set up as this directly impacts the type of fabrication account that will
be established. If the incorrect type of account is established at set up then all costs charged to that
account will ultimately have to be transferred to the corrected account type.
28
Establishing A Fabrication PTA
Completed forms should be sent to Property
Services (Ernest Ngalula at M/C 116-6, ext.
4181)
Property Services reviews the form to verify
that the proposed fabrication is capable of
meeting Caltech’s definition of fabricated
equipment then passes the form to Project
Accounting
29
Establishing A Fabrication PTA
Project Accounting verifies that the fabrication is
allowable under the terms of the grant, contract or
co-operative agreement being charged and if prior
approval is required
Who actually sets up the account?


If set up at the same time as the main award – OSR
If main award already set up – Project Accounting
30
Establishing A Fabrication PTA
If a significant budget realignment is
subsequently requested (more than 20% of
the original fabrication budget) PA will
work with Property Services and OSR to
ensure that the project continues to meet the
definition of a fabrication and that it
continues to be allowable under the terms of
the awarding document
31
Fabrications
Equipment expenditure types should not be
used on fabrication accounts


Technically, a component purchased for a fabrication is
not a stand alone asset therefore it doesn’t meet the
definition of equipment
In practical terms using equipment expenditure types on
fabrications impacts Caltech’s reporting to agencies
Remember: Charges hitting a fabrication PTA are
overhead free therefore no fiscal implications to
using ‘supplies – allocable’
32
Monitoring Awards
Cost transfers
NIH NRSA Fellowships
Budget realignments
NIH salary cap
Foreign travel
Closeouts
Payroll distribution
33
Cost Transfers
Policy on cost transfers to federally funded
awards

http://atc.caltech.edu/Finance/policies_costtransfers.htm
34
Cost Transfers
Definition
An after-the-fact reallocation of costs, either
labor or non-labor, to a federally funded
award
 Federal requirements limit the circumstances
under which cost transfers are allowed

35
Cost Transfers
Procedures for non-labor cost transfers
within 90 days
Fill out cost transfer and justification form
 Answer questions 1 through 3 in Section C
 Signed by PI or cognizant administrator

Send form and supporting documentation to Project
Accounting
 Project Accounting will notify if transfer is not
approved

36
Cost Transfers
Procedures for labor cost transfers within 90 days


Campus personnel inputs into Labor Distribution Module
Must address the following






Indicate name of designated/knowledgeable individual who has
reviewed and approved the transfer
Explain why the labor expense was posted to the incorrect PTA
Explain why the labor expense should be transferred to the proposed
receiving account. How does the receiving account benefit?
Explain why, based on the terms of the receiving award, the charges
are allowable and allocable
Will be reviewed and approved by LDU at Caltech
Depending on the Division, a signed cost transfer and justification
form may be required
37
Cost Transfers
Procedures for transfers after 90 days



Fill out cost transfer and justification form
Answer questions 1 through 5 in Section C
Must be signed by PI, Division Chair and Project
Accounting official



Send form and supporting documentation to Project
Accounting
Project Accounting will notify submitter if transfer is not
approved
If a labor transfer, PA will forward copy of form to LDU for
system approval
38
Cost Transfers
What qualifies as an extenuating
circumstance?



Late issuance of appropriate documentation for reasons
beyond the control of the requestor, such as late
issuance of an award by a funding agency
Failure of another department to take action when
supporting documentation had been properly submitted
Transfer of expenditures from an unrestricted account
to a federal award that was not in place when the
expense was incurred
39
Cost Transfers
What will not qualify as an extenuating
circumstance?
Absences of the PI or cognizant administrator
 Shortage or lack of experience of the staff
administering the awards
 Federally funded sponsored accounts used as a
holding account for expenditures

If in doubt send PA a draft for review and
feedback before obtaining signatures
40
NIH NRSA Fellowships
Use the correct expenditure type to prevent
overhead being applied

“Res/Postdoctoral fellows”
Be aware that if a fellow engages in training
for less than 6 months of the award year,
one half of that years supply allowance
must be returned to the NIH
41
Budget Re-alignments
Why does budget sometimes have to be
realigned?

Linked awards


There must be budget at the PTA level for an invoice
to be generated (may need to transfer funding
between the main award and the linked award)
May wish to re-align budget between categories
(subject to the terms and conditions of the
award)
42
NIH Salary Cap
NIH imposes a limitation on the rate of pay
individuals may receive as compensation from
NIH funds
For calendar year 2004, the cap is $175,700 per
year
NIH also mandates that the portion of the
individual’s salary that represents the difference
between the capped rate and the actual rate may
not be received from federal sources
The rate can and usually does change on an annual
basis
43
NIH Salary Cap
For example:
PI with a salary of $200,000 per year
25% paid by an NSF grant; 25% by an NIH
grant; 50% by CIT funds
The PI may only be paid $43,920 from NIH
funds (he will be paid $50,000 from NSF
funds)
 The difference of $6,080, which exceeds the
NIH cap, can be paid from non-federal sources

44
NIH Salary Cap
At Caltech an excel spreadsheet is available
to assist division/center personnel in
calculating the appropriate percent of time
needed to input into the payroll system in
order to maintain consistency with the NIH
salary cap
This document also serves the purpose of
providing an audit trail
http://atc.caltech.edu/Finance/policies.htm
45
NIH Salary Cap
Procedure:
Prior to initiation of any payroll transaction from NIH
funds, the division determines which employees are above
the salary cap
Divisions utilize the NIH salary cap template to determine
the percentage of salary that can be charged to relevant
NIH grants, and what portion should be charged to nonfederal funds
Divisions should retain completed NIH salary cap template
as part of the record of that payroll transaction
46
NIH Salary Cap
Procedure:
On annual basis, and at the end of each NIH
award’s competitive cycle, Project
Accounting will run a report on that award
to verify that all salary payments were
consistent with the NIH salary cap in effect
at the time of the payment, and work with
the Division/Center to make necessary
adjustments
47
Foreign Travel
Prior approval for foreign travel may be
required on some awards
In those circumstances, even if the travel
benefited the award, the costs will be
unallowable on the award unless prior
agency approval was obtained
48
Foreign Travel - FDP
Prior approval for foreign travel is
sometimes waived on FDP awards depends on the agency
Prior approval waived for:
AFOSR
NIH
AMRMC
NSF
DOE
ONR
NASA
USDA
Prior approval required for:
ARO
 EPA

49
Foreign Travel – Non-FDP
Look out for :
JPL (prior approval is always required)
 Non-FDP grants & co-operative agreements
 Contracts
 There is a high likelihood that prior approval
will be required on these type of awards

50
Award Close-Out
30 day notice prior to end date
NCE required? (best to make
request prior to the end date
otherwise sponsor approval
required)
90 days from end date to close out
the award
51
Award Close-Out, cont’d
Out of period costs
Equipment purchased close to the end date
Overspends (Don’t wait until the end of the
award)
Underspends (underspends on fixed price
contracts may be transferred to gift awards)
Clear commitments
52
Payroll Distribution
(aka Effort Reporting)
http://atc.caltech.edu/Finance/coststudies.htm
Policies & Procedures
Payroll Distribution FAQ’s
53
Payroll Distribution
OMB Circular A-21
Section J.10.b(2)a
The payroll distribution system will … reasonably reflect
the activity for which the employee is compensated by the
institution…
Section J.10.c.(1)(e)
At least annually a statement will be signed by the
employee, principal investigator, or responsible official(s)
using suitable means of verification that the work was
performed, stating that salaries and wages charged to
sponsored agreements as direct charges…are reasonable
in relation to work performed.
54
Payroll Distribution
Procedures
Report Distribution

Every 6 months
July and January, for 6 months ending March 31 and
September 30, respectively
 Timing allows for cost transfers to be processed
within 90 days


Reports distributed to contact person
55
Payroll Distribution
Definition
Payroll confirmation reporting is the formal
verification of the reasonableness of payroll
charges to sponsored awards
In general each faculty/PI will receive 2
reports to sign
Faculty Report (detailing his/her own charges)
 Award Manager Report (detailing the
individuals charging to his/her awards)

56
Payroll Distribution
Contact Person
Each Faculty and Award Manager Report is
associated with a contact person
The contact person is responsible for distributing
reports to, and receiving from, faculty and/or
award managers
Contact persons were provided by Division
Administrators for the first reporting cycle
The Award Set Up Form currently requests that a
Payroll Confirmation Contact Person be
designated
57
Payroll Distribution
Cognizant Signatory
Responsibility for confirmation may be
delegated to a cognizant signatory
A cognizant signatory is any individual
who:
1.
2.
Has suitable means of verification that work was
performed, and
Has the knowledge to confirm that the payroll
charges were reasonable in relation to the work
performed
58
Payroll Distribution
Procedures
Review the information on the report and confirm that it
represents a reasonable distribution of payroll charges for
the work performed
If there is a disagreement that the work was performed
and/or that the distribution is reasonable, Cost Studies
should be notified immediately
Cost Studies will work with the award manager/contact
person to determine the appropriate course of action. A
cost transfer request may need to be processed by the
Division/center through Project Accounting. The Cost
Transfer policy will apply to such requests
59
Useful Expenditures Types
Caltech currently has 309 active expenditure
types
Fortunately,119 are for use by Finance only, 16 are
for recharge centers, and 4 are for burden
expenditures,
 But, that still leaves 170 to choose from….

For a complete listing go to:
https://fiji.caltech.edu:9013/pls/CNTR/CITWA_EXP.MAIN.PKG.startup
60
Expenditure Types
Top 10 Expenditure Types
Expenditure Type
Supplies - Allocable
Travel - Domestic Allocable
Travel - Foreign
Supplies - Unallocable
Entertainment*
Telephone Expense
Equipment - Caltech
Mtgs and Conf Exp - Allocable
Equipment Maintenance
Subcontracts- Over 25k
# of hits in FY2004
363,699
41,149
9,109
8,981
5,207
4,734
4,386
3,498
3,344
1,864
* Entertainment should never be charged to a sponsored award
61
Expenditure Types Supplies
Expenditure type
Expenditure definition
Usage
Supplies - Allocable
"Supplies that are allocable under
applicable cost principles"
Supplies that are necessary for the
overall operation of the Institute
Supplies - Unallocable
"Supplies that are not allocable under
applicable cost principles"
Examples: Flowers, gifts, donuts,
departmental lunches (non-business
related)
Chargeable to a
sponsored
agreement?
Yes, if the costs
directly benefit the
research
Never
• Allocable or unallocable? Is this the type of cost that the Federal Government should be
paying for either directly (direct charge to an award) or indirectly (recovered through the
F&A rate)?
• Caltech includes costs categorized as ‘supplies allocable’ in the pool of overhead costs
that we, partially, recover from Federal agencies: we exclude costs categorized as
‘supplies unallocable’ from that pool of overhead costs
• If in doubt use the front page of the newspaper test...
62
Expenditure Types Equipment
Expenditure type
Equipment- Caltech
Expenditure definition
Usage
Chargeable to a
sponsored
agreement?
Equipment where title is retained by the Use the “Equipment - Caltech”
Yes, if the project
Institute and is to be carried as an
expenditure type if:Caltech will have title directly benefits
asset under the Institute's capitalization to the asset, AND Unit cost is $5,000 or from the equipment
policy
more (including freight and tax), AND
and an allocable
Item has a useful life of 2 years or more, cost for that award
AND Item is a stand alone asset
Equipment - Gov't
Equipment where title is retained by the •Use the “Equipment - Govt”
government and tracked by the Institute expenditure type if:–The Government
retains title to assets over $5,000, AND
the additional equipment criteria are met
OR–The Government retains title to
items under $5,000, AND the additional
equipment criteria are met (typica
Equipment - Other
Equipment where title is retained by
others (excluding the government) and
tracked by the Institute
Yes, if the project
directly benefits
from the equipment
and an allowable
cost for that award
and the government
will retain title
–Use the “Equipment – Other Owned”
Yes, if the project
expenditure type if:The non-federal
directly benefits
sponsoring agency retains title to assets from the equipment
over $5,000, AND the additional equipment
and an allowable
criteria are met OR –The non-federal sponsoring cost for that award
agency retains title to items under $5,000, AND
and the sponsor will
the
retain title
63
Expenditure Types Determining Title
Sources of Information:
Oracle:
https://fiji.caltech.edu:9013/pls/CNTRL/CITWA_
POTA_PKG.startup



Type in award number
Double click on ‘award detail’
Scroll down to equipment
Award summary
Office of Sponsored Research
64
Expenditure Types
Expenditure type
Expenditure definition
Equipment Maintenance Service and material costs incurred to
maintain equipment (other than
computers) - Subject to IDC
Computer Software
Computer costs associated with
various packages, programs, routines
and symbolic languages that control
the functioning of the system
(excluding hardware and maintenance
costs)
Usage
Chargeable to a
sponsored
agreement?
Yes, if direct benefit
and allowable under
terms of the award
Any equipment maintenance, whether
one time or for a maintenance
agreement. Note that Overhead is
applied
Equipment expenditure types should not Yes, if direct benefit
be used for software. Software is not
and allowable under
considered capital and overhead will be terms of the award
applicable
65
Expenditure Types
Travel
Expenditure type
Expenditure definition
Travel - Domestic Allocable
"Travel costs incurred for an individual
on official Institute business within the
United States that are allocable under
applicable cost principles"
Travel - Domestic
Unallowable
"Costs incurred to tak e a trip or
journey within the United States that
are not allocable under applicable cost
principles"
"Travel costs incurred for an individual Must be allowable in accordance
on official Institute business outside
with Caltech's travel policy.
the United States"
Normaly, only the cost of
economy travel should be
charged as allocable.
"Travel costs incurred for an individual Example difference in cost
on official Institute business outside
between a first class upgrade
the United States that are not
and economy fare
allocable under applicable cost
principles"
Travel - Foreign
Travel - Foreign Unallowable
Usage
Chargeable to a
sponsored
agreement?
Must be allowable in accordance Yes, if allowable
with Caltech's travel policy.
Normally, only the cost of
economy travel should be
charged as allocable.
Example: difference in cost
No
between a first class upgrade
and economy fare
Yes, if allowable
and prior approval
obtained if
necessary
No
66
Expenditure Types
Meetings & Conferences
Expenditure type
Expenditure definition
Usage
Chargeable to a
sponsored
agreement?
Mtgs and Conf Exp-Allocable "Costs incurred to attend meetings
Costs of meetings and
Yes, if the award
and conferences that are allocable
conferences, when the primary
directly benefits
under the applicable cost principles"
purpose is the dissemination of and the cost is
technical information, are
allocable under
allowable. This includes costs of the terms of that
meals, transportation, rental of
award
facilities, and other items
incidental to such meetings or
conferences.
Mtgs and Conf Exp"Costs incurred to attend meetings
Examples might include
No
Unallowable
and conferences that are not allocable attendance at a civic or
under the applicable cost principles"
community organization
67
Expenditure Types
Participant Support Costs
Expenditure type
Expenditure definition
Mtgs - Participant Support
(Materials & Supplies) Direct costs for registration or conference fees
associated with meetings, conferences, symposia or training projects that
are paid to, or on behalf of, participants or trainees who are not
employees of the Institute
Direct costs for stipends, subsistence allowances and travel allowances
associated with meetings, conferences, symposia or training projects that
are paid to, or on behalf of, participants or trainees who are not
employees of the Institute
Stipends paid under NSF grants that provide for participant support costs
Travel - Participant Support
Stipend Participant Support
Stipend Participant Support UG Use only for stipends paid to undergraduate students on NSF- REU
awards
• Why is it important to use the correct expenditure type? Because participant support costs are overhead
free
• Administrative costs such as room rental, copying, postage, and clerical services do not qualify as
Participant Support costs.
• To rebudget funds from participant support cost category to another category requires Program Officer
approval
68
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