What you Need to Know about Allowable and Unallowable Costs in your Grant or Contract

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What you Need to Know about Allowable and
Unallowable Costs in your Grant or Contract
Presented by David Bray, Gail Munneke, and
Trisha Simmons Office of Research and Projects,
Fiscal Management
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Whats Good, Bad, and Ugly
The Good
The Bad
The Ugly
These practices will cost you, your secretary,
your department/unit, and ORP extra time and work
Best Practices
These practices have ramifications or consequences
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Salaries
The Good
The Bad
The Ugly
Preparing contracts after the grant or contract
has ended or for period outside of the grant
terms. Spending salary dollars over and above
what you originally proposed without agency
approval. Any increase or decrease of 25 or
more of key personnel needs written approval
before the fact.
Prepare contracts (Change of Assignments and
Appointments) for those people working on your
grant or contract as soon as you get a grant
number established
Committing effort in a proposal, charging that
effort to the grant or contract, then never
working on the project (NO call
staff/TAs) Charging overload to a federally
funded grant or contract
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Travel
The Good
The Bad
The Ugly
Travel reimbursements submitted after 60 days of
the original travel -requires a Late Travel
Submission Exception Request, if denied
reimbursement will be added to your taxable
wages. Paying for MEALS or entertainment costs
with University P-Card
Submit Travel Expense Voucher w/in 30 days of
travel. Include all supporting documents and
keep copy for your grant file. Price Comparison
for best value - driving vs. flying
Travel for personnel not involved with grant
University of South Florida had to return funds
and were fined under the False Claims Act seeks
triple the damages claimed plus civil penalties
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commodities
The Good
The Bad
The Ugly
Cappuccino machine to keep PI invigorated while
doing research is unallowable however, coffee
pot charged to a grant as a constant temperature
water bath could be acceptable.
Chocolate chip cookies and sweetened condensed
milk charged to NIH grant. These were not
refreshments, but the only thing that could
entice post-operative rats to eat after brain
surgeries
Goods purchased for personal use and charged to
the grant or contract Bar tab for calibrating a
new breathalyzer, might not go over well with
agency or Chancellor
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equipment
The Good
The Bad
The Ugly
Purchasing equipment not approved by agency or in
the last 3 months of grant Disposing of equipment
purchased with federal funds before 5 years after
the end date of the grant (example grant ends
6/30/08. cannot dispose of until 6/30/13.)
19 inch TV Used to acclimate adoption dogs so
they would not be afraid of televisions in their
new homes. Appropriately charged to BARC
Bio-Arts and Research Corporation
George Washington University Washington Post
(4/13/04) Settlement 1,828,000 with University
False Claims Allegation Theft of Federal Funds
3 year Prison Sentence for PI Professor
embezzling more than 900,000 Invoices contained
fictitious labor, equipment and consulting
equipment.
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Contractual services
The Good
The Bad
The Ugly
Not specifying could trigger the bid limit
process or the need to justify a sole source.
These procedures may halt or significantly
impede progress.
Specifying in the proposal the institution(s) or
individual(s) that will provide services to the
grant or contract
CONFIRMING TRANSACTIONS Contractor providing
services before you have a fully executed
contract which includes - Subcontracts -
Consulting Agreements FOUNDATION PAYS!
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Contractual services
The Good
The Bad
The Ugly
Paying outside consultants more than the daily
maximum federally approved rate (537/day)
Notify the agency to which you seek funding from
of any conflicts of interest with any of your
contractors, co-investigators, vendors Also file
Conflict of Interest Disclosure Form with
Purchasing
Paying an individual or company for services out
of a grant or contract that were never provided.
Business Manager or PI should verify actual
consulting services were rendered - Punishable
under the False Claims Act.
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Operation of auto
The Good
The Bad
The Ugly
Bypassing transportation services and renting
vehicles elsewhere. Be conscious of best value
to grant or contract.
Submit Driver Approval Forms to Transportation
Services and request all reservations in a timely
manner. Charge directly to grant or contract if
it is a program-related cost
Non-approved drivers driving University vehicles
or University rented vehicles - Expired
licenses - Non-employees Charging grant or
contract for personal use of vehichle
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telecommunications
The Good
The Bad
The Ugly
Providing Telecom with the grant number to
default communication charges to (especially if
the grant is 1 year or less)
Keep a log of call times for communications you
intend to directly charge to the grant. Request a
separate phone line for grant or contract related
communication charges
NO Cell Phones Eligible employees may receive
additional compensation, in the form of a
wireless phone allowance, to cover the cost of
business-related calls on their personal wireless
phone
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Cost transfers
The Good
The Bad
The Ugly
Transferring funds from one contract/grant to
another to avoid cost overruns or undercuts, or
for other matters of convenience
Allocate charges to various accounts when
preparing the APID, Purchase Requisition, or
reconciling the P-card transaction
Transferring costs after the 90 days following
the end of the month in which the original charge
was initially recorded Strongly discouraged, and
will not be permitted except in extenuating
circumstances
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P-Card transactions
The Good
The Bad
The Ugly
Setting grant or contract account as your
Default. - Charging meals - Charging
chemicals - Stringing (using more than one
p-card transaction to purchase items above your
limitation)
Reconciling and approving charges from your
P-card in a timely manner. Allocating charges to
the proper account at the time of reconciliation
Buying equipment over 1000.00 1 month
suspension of p-card Personal charges
immediate reimbursement to University and
possible cancellation of privileges, termination
and/or criminal charges
http//www.siue.edu/purchasing/staff/pcard/pcard_r
egulations.shtml
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Budget Revisions
The Good
The Bad
The Ugly
Not notifying ORP of budget revision plans -
let us know if youve talked with your program
officer Overspending budget lines before
acquiring ORP approval Expanded Authority
Compare your budget to actual expenses to project
future budget revision needs. Notify ORP
immediately when need for budget revision arises
Overspending budget lines without required AGENCY
approval Not notifying agency of 25 or more of
change in Key Personnel Requesting agency
approval after agencys set deadline
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Proposal budgets
The Good
The Bad
The Ugly
Listing faculty or other salaried employees at an
hourly rate. JUST SAY NO!!! - we can negotiate
Listing all individuals, the effort committed,
and their monthly FTE with consideration for
salary increases PLAN, PLAN, PLAN Get estimates
for travel, supplies, equipment
Providing erroneous estimates, winging it, or
overcommitting the time you have to work on your
research, teach, and serve on committees.
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Record retention
The Good
The Bad
The Ugly
Keeping records for more than 5 years. If
auditors find reference to any records your still
have those documents are still auditable
Keeping all records for at least 5 years after
the end date of your grant. That is the federal
guideline and the most restrictive
Throwing out program-related documentations. ORP
will have financial reports and records. It is
the PIs responsibility to keep program records.
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Questions???

• Josephine Barnes ext. 5199 jbarnes_at_siue.edu
• David Bray ext. 3693 dbray_at_siue.edu
• Gail Munneke ext. 3162 gmunnek_at_siue.edu
• Trisha Simmons ext. 3008 tsimmon_at_siue.edu

Thank You