Proposal Cost Estimates and Cost Sharing RSC Refresher

1
Proposal Cost Estimates andCost SharingRSC
Refresher

• Research Administration/
• Contracts and Grants
• Sharon Boyd, Assistant Director - CG
• Matt Ronning, Associate Vice Chancellor -
• Research Administration

2
Overview of the WebSite

• http//www.ncsu.edu/sparcs/budgeting

3
Objectives Summarized

• Identify roles and responsibilities
• Preparation
• Review
• Approval
• How to evaluate risk
• Preparation of budget narratives

- Cost Sharing - Meaningful Narratives -
Compliant Format - Sufficient Resources
4
Budget Narrative/Justification

• What does the sponsor require/desire?
• What are NCSUs basic principles?
• Unlike circumstances
• Making cost sharing commitments
• Wheres the value in the narrative?
• Combat post-award allowable cost issues
• Have you done your homework (CAS, Sponsor
  Guidelines, etc)
• Provides a plan from which to work
• Keep somewhat vague in normal circumstances to
  avoid restrictive interpretation...
• Tie to project objectives

5
Unallowable Costs?
You

• A-21
• Sponsor Guidelines / Contractual Provisions
  (terms and conditions)
• Institutional rules
• Common Sense

6
Unlike Circumstances

• Justify and Substantiate the need for
• Clerical and Administrative Salaries
• General Office Supplies
• Computers/Peripherals
• Telephone line charges
• Regular Postage
• Memberships and subscriptions

These are all nearly impossible to ALLOCATE to a
specific sponsored project
7
(No Transcript)
8
Evaluating Risk

• Addition errors
• Apply judgement
• Can the change be made locally?
• Whats the worst that could happen, really?
• Avoid work on the post-award end
• Clarifications from sponsors, etc.

9
Remembering the FA

• In order to apply the correct FA rate to a
  project
• Determine the function that the project is
  serving Research, Instruction, or Public
  Service/Extension
• Determine the on or off-campus status (where is
  the majority of the technical work performed and
  in what facilities)
• Apply the appropriate negotiated rate to your
  proposal budget and calculate the amount of FA
  by using the appropriate BASE

10
Remembering the FA

• There are differing types of FA BASES used by
  sponsors. The most common are
• Modified Total Direct Cost (MTDC) recovery is
  calculated on all cost lines excluding
  equipment, student aid (tuition fees), and each
  subcontract (up to the first 25K, NSF
  participant support)
• Total Direct Cost (TDC) recovery is calculated
  on all cost categories/no exclusions
• Total Federal Funds Awarded (TFFA) recovery is
  calculated on all cost lines including FA (seen
  with USDA 14 or 19 FA rates)

11
Remembering the FA

• The projects start date is a determining factor
  in which effective rate should be used. However,
  A-21, Section G.7 advises that FA rates should
  remain fixed throughout the life of an award.
  This is true of supplements/continuations where a
  new proposal is not required
• NCSUs six (6) negotiated rates are calculated on
  an MTDC base
• Regardless of the FA base reimbursed by the
  Sponsor, NCSU can not recover more in FA costs
  than our negotiated MTDC basis would allow

12
COST SHARINGThe Big Picture Definition
The portion of total project costs not borne by
the sponsoring agency Cost Sharing is . .
. Sharing Costs
13
Definitions/Terms

• Cost Sharing
• Multiple funding sources contribute to a project
• Cost Sharing can be in the forms of
• Cash (sometimes referred to as real)
• In-kind
• Matching is generally tied to request or total
  project cost
• Match sponsored dollars 11 with local dollars

14
Proposal PreparationDocumenting Obligations

• Cost share ONLY when specifically
  mandated/required by the Sponsor (RFP),
• Cost sharing included in excess of the minimum
  mandate/requirement of the Sponsor should be
  scrutinized by the Department/College,
• If obligations are not mandated, they should NOT
  be listed on budget pages or noted in budget
  narratives to the Sponsors.

15
Proposal PreparationDid We Obligate Cost
Sharing or Not?

• Example
• In writing our proposal to ABB, Inc. we included
  the following statement, Our Department has
  existing equipment, adequate research facilities,
  and some laboratory supplies that will be
  utilized in support of this grant.
• Is this a firm voluntary commitment of resources
  and funds to this potential award?

16
OMB Clarification - PI Effort Not Paid Directly
From the Award

• Most Federally-funded research awards are
  expected to have some level of PI/Key personnel
  effort, either paid or unpaid by the Government,
• If a research sponsored agreement shows no effort
  by the named/Senior researchers, paid or unpaid
  by the Feds, an estimated amount should be
  computed by the Institution and included in the
  research base for purposes of FA rate
  calculations.
• HOWEVER...

17
OMB Clarification - PI Effort Not Paid Directly
From the Award

• OMB has recently clarified that some specific
  types of award programs do not require this
  voluntary commitment of Faculty effort, paid or
  unpaid by the Government. Such award programs
  include
• Equipment/Instrumentation Grants
• Student Augmentation Awards

18
Definitions - Voluntary Committed vs. Voluntary
Uncommitted

• Voluntary Committed -
• Mandatory required by the Sponsor AND quantified
  In the proposal/budget can be program or
  Sponsor driven
• Voluntary NOT required by the Sponsor BUT has
  been included in the proposal/budget
• Voluntary Acceptance of awards not directly
  paying PI/Key personnel effort (Presidential
  Review Directive January 2001 OMB
  Clarification Memo)
• Voluntary Acceptance of awards at a lessor
  amount without a revised scope of work and/or
  budget
• Voluntary Uncommitted - arises after the award
• is in place expended in support of project

19
Cost Sharing Guidance (A-110 SubPart C)

• COST SHARING CLAIMED MUST BE
• 1. Incurred during award period
• 2. Allowable in accordance with A-110 and Sponsor
  regulations. The criteria for allowability
  include a) necessary, b) reasonable, c)
  allocable, and d) timely
• 3. Verifiable from internal records when paid
  from the University or from official external
  documentation
• 4. Claimed/reported/used only once (theory of
  allocation)
• 5. Approved in advance by BOTH Federal sponsors
• 6. Able to meet CAS requirements if used in
  support of a project subject to CAS. The
  definition of a direct charge must be met. Cannot
  be components of the FA rate.

20
COST SHARING Regulations/Requirements

• Allowable as Cost Share
• A -110 Requirements
• (Subpart C-.23)
• A-21 Requirements
• (Sections C- 2 through 4)
• Sponsor Requirements
• FA on direct costs used as cost share as long
  as explicitly noted in the budget and approved
• Dollars attributed to under-recovery of FA with
  prior approval of the Sponsor

• Unallowable as Cost Share
• Federal on Federal (without prior approval from
  both Sponsors)
• Unallowable costs in A-21 (Sec. J)
• Cost items included in the FA cost pools,
  including costs requiring unlike circumstances
  in order to charge direct (secretarial/clerical
  salaries, office supplies, postage, memberships,
  etc.)

21
IS THIS COST ALLOWABLE AS COST SHARING?

• BOTTOM LINE
• If you could have charged the expense to the
  project at hand, either as a DIRECT or an FA
  cost, the answer to the question is YES

22
Partial Schematic of Cost Share
23
Supporting Cost Sharing Commitments

• Required
• when commitment made to the sponsor
• Recommended
• when no commitment made to sponsor but,
• Support and document internal commitments
• Use GAMS

24
FA Under-Recovery Substantiation

• FA Waivers
• Sponsor prohibits all or a portion of indirect
  costs
• College or university desire to reduce overhead

25
Cost Sharing Categories More On Effort

• Significance of Effort Issue
• Significant amount of time not reimbursed by the
  sponsor
• Significance should be based on the facts and
  circumstances of each award and is ultimately
  left to the judgment of PI.
• If there are to be personal expenditures
  associated with certain individuals and charged
  to the project, such as travel or tuition/fees,
  etc., that persons effort no matter how
  insignificant it may seem must be either charged
  directly or cost shared against that award and
  reflected in TEARS.

26
Cost Share Categories FA Costs

• Facilities Administrative Costs
• Can be claimed as cost sharing (at the same rate
  of recovery on funded portion) on the allowable
  direct costs paid from other funding sources in
  support of the project
• Under-recovered FA costs can be claimed as cost
  sharing IF previously approved by the Sponsor AND
  specifically noted in the proposal/budget
• (For closeout and reporting purposes, these costs
  will be calculated by CG)

27
Under-Recovery of FA Calc.

• How to calculate waived/under-recovered FA
• (a) calculate FA as allowed by sponsor
• (b) calculate FA as allowed by federally
  negotiated rate agreement (MTDC Base)
• Subtract a from b
• This is your waived/under-recovery of FA.
• The amount above is different and apart from FA
  on direct costs claimed as cost share

28
Post-Award Budget Issues

• Budget Input
• Budgets will be input to Financials based upon
• The APPROVED Sponsor budget
• The level of detail that the recipient College
  normally budgets against (For example, COE and
  PAMS budget by detail, CALS budgets by major cost
  category)
• If no budget is required by Sponsor (Fixed Price
  or NIH Modulars) budgeted to the Budget Pool and
  FA cost lines

29
Post-Award Budget Issues

• Budget Corrections vs. Re-budget Requests
• Budget corrections normally occur within a short
  period of time after initial project set up and
  are requested as a result of CG misinterpreting
  the placement of costs into cost categories based
  on the budget received. An e-mail to the CG
  Fiscal Manager is appropriate.
• Re-budgets normally occur when costs need to be
  moved from one category to another based on the
  changing needs of the project. The Universitys
  Prior Approval Form must be completed for these
  actions to take place.

30
Post-Award Budget Issues

• Throughout the life of the award, the recipient
  is responsible for
• Monitoring BOTH direct and FA cost lines
• Seeking re-budgeting actions when needed,
  especially when comparing budgeted to expended
  amounts in Equipment, Student Aid and Subcontract
  cost lines (affects FA calculations)
• Monitoring total costs not to exceed the budget

31
Post-Award Budget IssuesInaccuracies
Affecting Recovery

• The authority to review and approve budgets (both
  direct and FA costs) prior to submission to the
  sponsor rests with the College Research/Business
  Office
• When errors in budget calculations result in a
  loss of FA recovery to the University, the
  College will be assessed a penalty equal to the
  amount of this loss