Accounting 101 Module III: MCG Budgeting Basics Class II : Grant Accounting

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Accounting 101 Module III MCG Budgeting Basics
Class II Grant Accounting
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Purpose

• This session is designed to explain what
• Grant Accounting is and some of its
• fundamentals.

Note At MCG, we refer to this as Sponsored
Accounting
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Objectives

• 1. Define basic terminology
• 2. Identify roles and responsibilities
• 3. Explain how a sponsored project is
  established
• 4. Determine how sponsored project funds may be
  spent
• 5. List sponsored project management tools
• 6. Describe difference between Fin Accounting
  and Sponsored Accounting

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Agenda

• 1. Grant vs. Contract
• 2. MCGRI
• 3. FA
• 4. Financial Accounting vs. Sponsored Accounting
  
• 5. Establishing a Sponsored Project
• 6. Lapsing of Sponsored Funds
• 7. Sponsored Project Responsibilities
• 8. Determining how to spend project funds
• 9. Sponsored Project Management Tools
• 10. Effort Reporting

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Grants

• Received from federal non-federal sponsors
• Funding mechanism
• Awarded to MCG or MCGRI
• Exchange for work
• Regulations

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Sponsor Examples

• Federal Sponsors
• National Institutes of Health
• Department of Health Human Services
• National Science Foundation
• Examples of Non-federal Sponsors
• American Heart Association
• Juvenile Diabetes Foundation
• Muscular Dystrophy Association

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Contracts

• Legal agreement
• Cost-Reimbursable
• Cost-Plus fee
• Fee-for-Service
• May be between MCG/MCGRI and federal or state
  entities, or industry sponsors

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MCGRI

• Medical College of Georgia Research Institute,
  Inc.

• Established to support the missions of MCG
• Almost always the applicant organization for
  awards
• Payments are sent to MCGRI and then forwarded
• to MCG
• MCGRI retains a portion of the FA costs to
  support its operations and to fund reinvestment
  programs at MCG

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FA costs

• Facilities and Administrative costs

• Also sometimes referred to as indirect costs,
  IDC, and/or Overhead

• Costs that are not directly charged to awards
• Common or joint objectives on sponsored projects
• Not easily identifiable with a specific project
• Will vary according to each agreement

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MCGRIs FA

• 10/46 indirect
• 4,300 X 10/46 934.78
• Fund 20000 MCG
• Fund 21021 MCGRI
• Fund 15000 Indirect

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MCGRIs FA

• Allocation Example
• MCG
• Direct 10,000.00
• Indirect 4,300.00
• MCGRI
• Direct 10,000.00
• Indirect 4,300.00
• Contra -934.78

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MCGRIs FA

• Deposit Example
• MCG receives 3,000, indirect rate 20
• Direct 3,000.00 / 1.20 2,500.00
• Indirect 2,500.00 X .20 500.00

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MCGRIs FA

• Deposit Example
• MCGRI receives 3,000, indirect rate 20
• Direct 3,000.00 / 1.20 2,500.00
• Indirect 500.00
• 2,500.00 X .20 500.00 X 10/46 108.70
• 500.00 -108.70 391.30
• MCGRI keeps 108.70
• MCG receives 2,891.30 from MCGRI
• Direct 2,500.00
• Indirect 391.30

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Financial Accounting vs.Sponsored Accounting

• Financial Accounting Non-sponsored agreements
• Questions? Barandy Brock [phone]
• Sponsored Accounting Grants Contracts
• Questions? Visit website for assigned Accountant
  http//www.mcg.edu/spa/post.htm

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Establishing a Sponsored Project

• Application routed to Pre-Award
• Pre-Award ensures all necessary approvals are in
  place
• Once award is made, Sponsored Accounting sets up
  a Chart Field Combination (CFC)
• Pre-Award follows up by sending the Notice of
  Extramural Funding (Pinksheet)

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Lapsing of Sponsored Funds

• Q Do sponsored funds lapse
• on June 30, like Departmental
• funds?
• A No

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Project Roles Responsibilities

• Principal Investigator (PI), Department Manager
  Project Coordinator
• Submit proposals (first through SPA)
• Responsible for technical, administrative, and
  fiscal management of project
• PI is ultimately responsible for all expenses on
  the project.
• Department Chair
• Reviews proposals for various issues
• Maintains responsibility for conduct of project

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Project Roles Responsibilities

• Dean
• Accountable for all funds administered for
  his/her school
• Coordinates all programmatic elements within
  his/her school
• Vice President for Research
• Has general oversight for policy issues as they
  pertain to extramurally funded research
  programs.

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Project Roles Responsibilities

• SPA, Pre-Award
• Assists in development of proposals
• Submits all electronic proposals
• Receives award on behalf of MCG/MCGRI
• Requests account numbers
• Serves as institutional prior approval office
  once award has been activated
• Transmits project information to SPAs Sponsored
  Accounting

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Project Roles Responsibilities

• SPA, Sponsored Accounting
• Monitor expenses
• Process cost transfers
• Manage AR Invoice as necessary
• Monitor projects budget throughout its life
• Manages Time Effort system
• Prepare Submit financial reports to sponsors
• Coordinate close-out process when project ends

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Allowable Expenses

• For an expense to be allowable it must benefit
  the project and meet this criteria
• Reasonable
• Allocable
• Consistently treated
• Conform to any limitations or exclusions

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Expense Criteria

• Review the contract or award document, Sponsors
  guidelines, MCG policies, A-21 Cost Principles
• Direct Charging Policy
• http//www.mcg.edu/policies/7008.html
• Direct Charging Decision Tree http//www.mcg.edu/s
  pa/forms/direct20charging20decision20tree.pdf
• Justification to Charge Normally FA as Direct
  Costs http//www.mcg.edu/spa/forms/Justification.r
  tf.

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Sponsored Project Management Tools

• Available PeopleSoft Reports
• Comprehensive Financial Report
• P/G Status Project Life Basis
• Open Encumbrance Report
• Queries
• Sponsored accounting panels

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Effort Reporting

• Employee must have effort toward project
• Allows SPA to verify and make corrections if
  necessary
• Effort must be certified.

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Cost Sharing

• It is the portion of total projects costs NOT
  born from the sponsoring agency.
• It is real money charged to and paid from other
  funding sources

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Questions/Answers
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Conclusion

• This concludes Module III Class II
• Grant Accounting
• If you have any questions, comments or problems
  with PeopleSoft Financials, please use the
  Functional Service Request (CRT). The link is
  found on the MCG PeopleSoft web page
  http//www.mcg.edu/peoplesoft. Click the
  Functional Service Request (CRT) link on the left
  of the page. Or the direct link is
  http//www.mcg.edu/peoplesoft/crt.
• Thank you