The Office of Research Services The Office of Research Support Services 1 REVISED October, 2008...

The Office of Research Services The Office of Research Support Services

1REVISED October, 2008

Award Acceptance and Account Set-Up

Sponsored Programs at Penn



Advance Accounts• What is an Advance Account?

– Use when high probability of award– Allows you to put charges on proper account

• Avoid journal entries and payroll reallocations– Use with pre-award costs under expanded authorities– Easy to request

• Link to Advance Account Request form located on ORS’ home page

– http://www.upenn.edu/researchservices/pdfs/advance.pdf– SOM - Advance Accounts are approved and set up by ORSS– All other schools - forward request to ORS



Advance Accounts (cont.)• Risks

– Award may not materialize – Start date may be delayed – Not all sponsors allow “Pre-award”

expenditures

• Establish follow up routine– Has award materialized?– Is something holding it up?– 3 month limit on advance accounts



What is a Notice of Award (NOA)?

• An official written communication from a sponsor providing financial support for a proposed sponsored project



What is Contained in a Notice of Award

• PI Name• Dates of Performance

– Current budget period– Total project period

• Dollars– Direct, F&A– Current, project total

• Cost Sharing• Contact information

• General & Special T&C

– Use of Animals/Human Subjects

– Use of Interest Income– Use of Program Income

• Reporting requirements– Programmatic– Financial– Property– Invention



Account Set-Up



Account Set-Up Notice of Award

(NOA)Received

Fund AttributesFund Parents

Special BudgetsAccount Segments

Assigned in PennERA & Sent to GL

Fund & Legacy Number Created

in BEN Financials & Sentto PennERA

AISis

Generated

Status Changed From Proposal To Award



Funds and Accounts• New Funds are created for each year of the

award when carryover of money from one year to the next must be approved by the Sponsor

• New funds are also required when the F&A changes from one segment to another

• Subaccounts are to be requested on the subaccount worksheet



Receiving the Award and the Account Information

Sheet (AIS)



Reviewing the AIS and the NOGA

• Ensure Account End Dates Accurate (budget end or project end?)

• Ensure Award on AIS matches Award on NOGA

• Ensure FDP and/or SNAP• Ensure accuracy of F&A rate• Ensure proper PI name and Org#• If the AIS is for a continuation year, always

check for budget periods funded with prior unobligated funds.



Review the Award

• AIS is not substitute for award• Review terms and conditions of

award• Sponsor guidelines• Restrictions



Subcontract Process• Two Scenarios

– Notice of Award arrives with subcontract included• ORS contacts BA to verify subcontract information

– BA notifies ORS subcontract needed/requested• Sponsor approval may be required

• BA/PI prepares subcontract request form http://www.upenn.edu/researchservices/docs/SUBCONTRACTREV.doc

• ORS completes subrecipient monitoring, prepares subcontract & sends to subrecipient– Subrecipient signs & returns

• ORS sends to BA– Cover letter– Signed agreement– Guidelines for BEN Financials Purchase Orders & Sponsored Program

Subcontracts (BEN MEMO)• BA sets up Purchase Order



Subrecipient Monitoring

• A-133 report or audited financial statements required annually

• Current F&A rate agreement

• Risk Assessment – results indicate appropriate subcontract terms and conditions



Subcontract Process (cont.)

• PI & BA manage subrecipient invoices• PI & BA manage subrecipient activities

– PI must determine if work is satisfactory and approve payment

• Establish strong lines of communication with contact at other institution



Establishing Subcontract in BEN Financials

• Department verifies Supplier (Subcontractee) information is in BEN Buys– Supplier Name & Site

• Confirm available funds & that subcontract OBJC’s have been budgeted correctly– OBJC 5332 (up to $25,000 charged F&A)– OBJC 5333 (over $25,000 no F&A charged)



Establishing Subcontract in BEN Financials (cont.)

• Generate a Purchase Order (PO)– Executing a requisition in BEN Buys

• Provide Sole Source Justification– An approved requisition will generate a PO– PO approval follows normal PO hierarchy

• Manage PO– All subcontract payments to supplier must be

approved by responsible PO Manager– “On-line receipts” required for all subcontract

PO’s• Use “Receipt Required” field for PO’s less than $5,000



Reference Documents• Guidelines for BEN Financials Purchase Orders &

Sponsored Program Subcontracts– http://www.upenn.edu/researchservices

• Requisitioner User Guide & PO Manager User Guide– http://www.finance.upenn.edu/ftd/documentation– Requisitioner User Guide

• Creating a Requisition • Entering Receipts

– PO Manager User Guide• Managing the PO• Viewing Invoices• Entering Receipts



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!!!!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



Questions???

The Office of Research Services The Office of Research Support Services 1 REVISED October, 2008...

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