Project Management: What do you really need to know

1
Project Management What do you really need to
know?

• Winnie Ennenga, Director
• Office of Grant and Contract Services

October 29, 2003
2
Which of these costs are not allowable
expenditures in awards to NAU?

• Tuition for graduate research assistants
• Conference travel split between two sponsored
  projects
• Professional memberships
• Clerical salaries
• Transfer of cost overruns to other federal
  projects
• First class air travel
• Alcoholic beverages
• Supplies and materials
• General-purpose equipment

3
Can a sponsor impose requirements like these on
NAU?

• Restrictions or prohibitions on the publication
  of research results
• Sponsor ownership of intellectual property
• Unilateral modification of the scope of work by
  the sponsor
• Repayment of award funds if cost sharing
  requirements are not met

4
Answers to these questions can be found in

• The funding mechanism used to make an award
• Gift
• Sponsored Project
• The type of award
• Assistance Agreement
• Procurement
• Sponsor policies, laws and administrative
  regulations
• Award-specific terms and conditions
• Institutional policies and procedures
• The proposal

5
Funding Mechanisms

• Gifts
• Sponsor chooses recipient
• Usually discretionary
• No strings
• Work with NAU Foundation
• Sponsored Projects
• Recipient chooses Sponsor
• Always restricted
• Always Strings
• Work with Office of Grant and Contract Services
  (OGCS)

6
What is a Sponsored Project?

• The proposed project binds the University to a
  specific scope or area of work
• A detailed (line item) budget is required
• Financial and technical reports are required
• The award is subject to external audit
• The project has a specified performance period or
  completion date
• Regulatory approvals are required
• The agreement provides for this disposition of
  property (tangible or intangible)

7
Most common types of sponsored project awards

• Assistance Agreements
• Grants
• Cooperative Agreements
• Procurements
• Contracts

8
Assistance Agreements Grants

• Support is for a public purpose
• Project is conceived and developed by the
  principal investigator
• Sponsor has no substantial involvement in the
  project
• No guaranteed deliverables
• No penalty for failure

9
Assistance Agreements Cooperative Agreements

• Support is for a public purpose
• Project is conceived by the sponsor and developed
  in collaboration with the principal investigator
• Sponsor has substantial involvement in the
  conduct of the project

10
Procurements Contracts

• Project benefits the sponsor
• Project is conceived by the sponsor
• Sponsor exercises some direction or control
• Includes specific deliverables and time frames
• Provides legal remedy for breach

11
Summary

• The funding mechanism and type of award affect
  the type of project you will be able to conduct,
  and the amount of direction or control the
  investigator has over the project.
• You need to know what type of award will be
  issued BEFORE you begin to write the proposal.

12
Sponsor Policies, Laws and Administrative
Requirements

• Federal awards are administered in accordance
  with the OMB Circulars and the Federal
  Acquisition Regulations (FAR)
• The purpose is to give instructions to federal
  agencies which they are required to implement
• Establishes the maximum requirements for the
  government and, accordingly, the minimum
  standards for institutions
• Agency interpretations of the Circulars are
  contained in the Code of Federal Regulations
  (CFR) or agency-specific policy manuals

13
Summary

• A working knowledge of the circulars will help
  you determine what is allowable and unallowable
  before you incur the cost (or have the item
  struck from the award budget) and also to know
  when an exceptions can be made and how to justify
  it.
• To avoid post-award blues, read at least parts of
  A-21 and A-110 BEFORE you write a proposal.

14
Award Specific Terms and Conditions

• May allow actions which otherwise would not be
  allowable, or prohibit otherwise allowable
  actions.
• Typical inclusion is to document cost sharing
  requirements
• Restrictions on participants (e.g., programs
  intended to foster increased participation of
  minorities or women in science may have
  participation requirements or limitations)

15
Institutional Policies and Procedures

• Submitting Proposals, Reviewing and Accepting
  Awards to Northern Arizona University

16
What are the requirements for submitting
proposals through the University?

• Review 3 handouts
• Guideline for Submitting Proposals
• Proposal Review Checklist
• Forms package

17
What are some of the things our office looks at
when we review awards for acceptance or
declination?

• Payment Provisions
• Fixed Price Agreement
• Line Item Restrictions
• Excessive Documentation
• Detailed Invoicing
• Indirect Costs (FA, Overhead)
• Cost Sharing Requirements
• Scope of Work
• Project has been approved internally and is
  consistent with the unit/college/university
  mission
• Any clarification required prior to acceptance?

• Technical Direction
• Unreasonable Sponsor Involvement
• Unilateral Changes
• Inspection and Acceptance
• Payment Tied to Deliverables
• Penalties for failure
• Publication
• Unreasonable Delays
• Prohibition or restriction

18
What are some of the things our office looks at
when we review an award for acceptance or
rejection?

• Intellectual Property
• Ownership
• Indirect Cost Issues
• Use issues
• License Terms
• Reporting Requirements
• Technical
• Financial
• Property
• Intellectual Property
• Termination
• Right to Terminate
• Default Penalties

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Post-Award Project Management Activities

• Negotiation and acceptance of award
• Key personnel
• Activation of grant account
• Issuance of subcontracts
• Time and effort reporting
• Documentation of cost share
• Financial reporting and invoicing

20
Post-Award Project Management Activities

• Management of intellectual property
• Compliance monitoring
• Humans Misconduct Biohazards
• Animals COI Radiation safety
• Monitoring of technical reporting
• Subrecipient monitoring
• Project close-out and audit
• Records archiving

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Discussion
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Budget Preparation

• Does the budget reflect the scope of work?
• Are salary rates correct?
• Are anticipated cost increases built in for
  multi-year projects?
• Are tenure/promotion increases built in for
  junior faculty if appropriate?
• If secretarial/clerical costs are budgeted, are
  the duties clearly project specific as opposed to
  general administrative work?
• Are fringe benefit rates correct?
• Are proposed consultant fees within sponsor
  limits?

23
Preparing the Budget

• Is equipment purchase allowed by the sponsor?
• Does proposed foreign travel meet sponsor
  limitations?
• Are indirect costs included if paid by the
  sponsor
• Are subcontracts identified and justified?
• Are proposed cooperating institution(s)/organizati
  on(s)
• financially stable?
• able to comply with flow-down provisions?
• committed in writing?
• Are there cost sharing requirements?
• Is cost-sharing overly excessive?
• Is the budget justification sufficiently detailed
  and accurate?

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Format of the Proposed Budget

• Budget Cost Categories
• Salaries and Wages
• Employee-Related Expenses (ERE)
• Equipment
• Travel
• Student Support / Participant Support
• Other Direct Costs
• Consultants
• Subcontracts
• Indirect Costs

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Salaries and Wages

• Cost of personnel paid on NAU payroll for effort
  directly related to the project
• Costs based on ACTUAL salary rates or an amount
  within the salary range of the job classification
  for person to be hired
• Summer Salary vs. Academic Salary
• Administrative and Clerical Staff Salaries (OMB
  Circular A-21, f.6.b.)
• Normally not allowed as direct charges to
  federally sponsored projects

26
Salaries and Wages

• Administrative and Clerical Staff Salaries (OMB
  Circular A-21, F.6.b.)
• Exception the project meets the criteria of a
  major project and the employees can be
  specifically identified with the project activity
• Circumstances for direct charging these salaries
  should be clearly described in the budget
  justification

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Employee-Related Expenses (ERE) / Fringe Benefits

• Explanation rounded estimates based on the
  projected cost of health, dental, life,
  disability, FICA and medicare, unemployment, and
  retirement benefits relative to the employees
  salary/wages, FTE and number of dependents

28
Employee-Related Expenses (ERE) / Fringe Benefits
(FB)

• Average ERE rates for faculty and staff vary over
  a wide range from 8.65 for non-benefit eligible
  staff to as high as 75 for an employee with
  dependents.
• Student rates include only workers compensation
  during the academic year, and FICA/Social
  Security if the student is not enrolled full
  time.

29
Employee-Related Expenses (ERE) / Fringe Benefits
(FB)

• Full-time (20 hours/week) Graduate Research
  Assistants also receive a partial tuition benefit
  (1,200 per year) and an insurance benefit
  (1,126)
• The greatest portion of the benefit package is
  the cost of health insurance, which is increasing
  at about 7.5 per year!

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Equipment

• Definition
• Most federal agencies define equipment as
  non-expendable tangible property with an
  acquisition cost of 5,000 or more per unit and
  having a useful life of more than one year
• NAU uses an acquisition cost of 2,500 or more
  with a useful life of at least one year

31
Equipment

• Special Purpose vs. General Purpose
• "Special purpose equipment" means equipment which
  is used only for research, medical, scientific,
  or other technical activities. Examples include
  microscopes and spectrometers
• "General purpose equipment" means equipment, the
  use of which is not limited only to research,
  medical, scientific or other technical
  activities. Examples include office equipment and
  furnishings, reproduction and printing equipment
  and automatic data processing equipment
• Unallowable unless approved in advance by the
  sponsor

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Equipment

• Required Information
• Specific product information and specifications,
  per item cost (including shipping, tax,
  installation)
• List items in budget by name and estimated cost
  (based on actual price quotes)
• Budget Justification
• Include an explanation of the use of the
  equipment on the project

33
Travel

• Cost of trips necessary for the performance of
  the project
• Includes transportation, lodging, subsistence and
  related items
• Required Information name of traveler,
  destination, reason for trip, dates of travel,
  airfare and per diem rates
• Distinguish between domestic and foreign
• Fly American Act

34
Student Support / Participant Support

• Student Support stipends, tuition, registration
  fees, student health insurance, student travel
• Participant Support subsistence allowances,
  travel allowances and registration fees paid to
  or on behalf of participants or trainees in
  connection with meetings, conferences, training
  projects

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Other Direct Costs

• Supplies and Materials consumables used in the
  performance of the project (e.g. laboratory /
  instructional supplies, data processing supplies,
  raw materials)
• Communication Costs (e.g. long distance, fax,
  postage and mailing)
• Miscellaneous (e.g. computer services,
  publication charges, animal charges)

36
Consultants

• Possesses specialized knowledge and skills,
  provides a specific product or service and may
  function autonomously in determining when and how
  the work will be accomplished
• Review sponsor guidelines for restrictions on
  maximum daily rates
• Review NAU Purchasing Policy, Guide to Using
  Independent Contractors

37
Subcontracts

• Transfer of scientific or programmatic efforts
  through an award to another organization
• Subcontractors Proposal should include statement
  of work, detailed budget, period of performance,
  identify key personnel
• Sole Source Justification vs. Bid

38
Indirect Costs (IDC) / Facilities and
Administrative Costs (FA)

• Definition per OMB Circular A-21
• costs that are incurred for a common or joint
  objectives and, therefore, cannot be identified
  readily and specifically with a particular
  sponsored project, an instructional activity, or
  any other institutional activity

39
Indirect Costs

• Current Rates based on a Salaries and Wages Base
• On Campus 47.8 of salaries and wages, excluding
  ERE
• Off Campus 20.9 of salaries and wages,
  excluding ERE
• NAU is currently undergoing a rate study to move
  to a Modified Total Direct Cost Base

40
Budget Justification

• Detailed explanation of budget items in narrative
  format
• Should include calculation of amounts included in
  the budget, in particular
• Administrative and clerical costs
• Special equipment needs
• Consultants and subcontractors

41
Reminders

• Do not pad the budget
• Do not underestimate costs