Cost Principles

 

UAF and its PIs are jointly responsible for stewardship of sponsored research funds in compliance with federal cost principles established by the Office of Management & Budget (OMB). Prior to December 26, 2014, these principles were described in OMB Circular A-21 and incorporated into university policies and procedures for administering research awards.

The new Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR 200 (“Uniform Guidance”), replaced several OMB circulars, including A-21. UA/UAF has adjusted policies and practices, at both the system and campus levels, to conform to the Uniform Guidance.

Adherence to all cost principles is required to properly and appropriately account for the expenses of conducting research at UAF. The consequences of failing to comply with costing principles may range from disallowance of specific incurred costs to termination of the award to federal sanctions, depending on the particular cost and circumstances in question.

 

Allowable Costs

The key concept of cost principles is “allowability.” For a cost to be allowable on a specific sponsored award, it must meet all three of the following criteria:

• Reasonable. It is necessary for the performance of the project and the cost is what a “prudent person” would pay for the particular goods or services obtained.

• Allocable. The project that pays the cost is the project that benefits from it. Expenses shared across multiple projects benefit all projects proportionately, when benefit can be clearly allocated, or reasonably, when proportionate value cannot be readily determined due to the inter-relationship of the work involved.

• Consistently treated. The university consistently designates that type of cost as either direct or indirect when incurred for the same purpose in like circumstances.

Additionally, the cost must not be explicitly excluded by federal guidelines or the terms and conditions of the award. Some expenses that may directly benefit a project may be prohibited by the award sponsor and, thus, are not allowable on the award.

 

FDP and Subrecipient Expanded Clearinghouse

 

The University of Alaska Fairbanks (UAF) is participating in the Federal Demonstration Partnership's (FDP) Expanded Clearinghouse Pilot for Subrecipient Entity Monitoring.

The purpose of this pilot is to reduce the administrative burden associated with verifying standard information for each and every subaward between institutions when acting as either a Subrecipient or a Pass-Through Entity. 

Instead, institutions like UAF will enter, upload, maintain and update an Entity Profile with information about their organization. Universities participating in the pilot have agreed that we will not exchange forms and information since it will be accessible via the web-based Entity Profiles. 

You will still need to collect some institutional agreement to participate at the time of proposal. As the FDP website states, "Minor exchanges of data that are transaction/subaward specific (such as an IRB approval, Statement of Work or budget) may still be shared between the pass-through entity and the subrecipient, provided that such exchanges do not require completion of data already appearing on the entity's published profile."

For example: Project teams still need to obtain a generic letter of commitment, as applicable, even when our subrecipient is registered in the FDP pilot clearinghouse

How does it affect Research Administrators?

Here are some steps you can take and language you can use when we are either the Pass-through entity or the Subrecipient:

• WHEN WE ARE THE PASS-THROUGH ENTITY:

Check first. Do not collect a Subrecipient Commitment Form from another participating pilot institution. Just visit this resource to look up the profile information  for the subrecipient you need. 

• WHEN WE ARE THE SUBRECIPIENT:

Kindly explain and do not complete a Subrecipient Commitment Form for a pass-through entity participating in the pilot Instead; please remind the other institution that we are part of the Expanded Clearinghouse pilot. Here is some sample language:

“I am writing to let you know that the University of Alaska Fairbanks is a pilot participant in the FDP Expanded Clearinghouse. It is my understanding that your organization is also a pilot participant. As a part of the pilot, both our organizations have agreed that we will not send or require completion of a subrecipient commitment forms, but will instead use our profile that is posted on-line at the FDP Expanded Clearinghouse site.”

 

 

Gift vs. Grant/Sponsored Projects Determinations

 

 UAF regularly receives funding from a variety of sources including the government, corporations and other private entities. Private entities (individuals, private agencies, professional associations, private foundations, corporate foundations and corporations) may be either donors or sponsors depending on the nature, intent and expectations of the funding they are providing. It is important to accurately classify the funding as either a gift or a grant/sponsored projects to ensure that funds are correctly accounted for and properly classified in the university’s financial statements. Furthermore, UAF has a fiduciary responsibility to sponsors and to donors to accurately classify these awards.

Philanthropic gifts are the voluntary, non-reciprocal transfer of money or property from a donor to an institution. The donor may be an individual, a foundation, a corporation, or another nonprofit organization. The donor does not expect anything of “value” in return (except perhaps recognition) and cedes control of the gift, though the donor may restrict the use of the gift to meet their philanthropic goals. A restricted gift is a contribution designated for a specific purpose or program. If the donor does not specify any restrictions, the institution may allocate the funds at its own discretion.

The principal purpose of sponsored projects (grant, contracts, cooperative agreement etc…) is to transfer money or property from a sponsor to an institution in exchange for specified deliverables (i.e., technical, progress reports, financial reports, etc.) to be provided within a designated period of performance. Excess funds may be required to be returned to the funder. Penalties may exist for failure to comply with funder requirements (aka terms and conditions). In additional, facilities and administrative (F&A) costs may apply.

 

Gift vs. Grant Determination

Funds received by US or international governmental agencies at the federal, state or local level are never treated as gifts. In cases where funding is provided by individuals, corporations, foundations or others, the gift vs. grant distinction is based on the nature of the proposal, statement of work, and/or other terms of the agreement, taking into consideration the intent of the donor/sponsor.

Note that donors sometimes confuse the classification issue by using the word “grant” when the funding actually qualifies as a gift, or vice versa. Therefore, careful consideration of the supporting documentation is critical in determining donor/sponsor intent. Administrators should use the following factors to help determine donor/sponsor intent:

Category or indicator	Factor generally indicates a “gift”	Factor generally indicates a “grant/sponsored project”
Proposal Process	Generally, results from a series of interactions between a donor (an individual, corporation, or foundation) and a member of the Development and Alumni Relations team.	Initiated by faculty members working together with the Office of Grants and Contracts Administration (OGCA)
Purpose/Intent	While the support may be accompanied by an agreement that restricts the use of the funds for a specific purpose, there are usually few other terms or conditions associated with the support.	The project commits the University to a specific line of scholarly or scientific inquiry, typically documented by a research plan or a statement of work.   A sponsor stipulates how the funds should be utilized via supporting documentation (aka notice of award, grant, agreement, subcontract, consortium, etc.).
Documentation	Letter of Donor Intent/Gift Agreement	Grant, contract, cooperative agreement, notice of award, agreement, subcontract, consortium, etc.
Specific Start & End Dates/Period of Performance	Typically, no. However, donors may support annually funded scholarships, fellowships, etc. which generally have specific start and end dates. A period of performance is not normally included, but one may be stated as a general expectation.	Terms include a period of performance that is specific for defining allowability of expenditures or other purposes.
Mission of and benefit to resource provider (i.e. donor of a gift or sponsor of a grant/sponsored project)	Funding is directly related to the university’s mission while only indirectly related to the resource provider’s business.	Funding is directly related to the recipient’s mission and generally directly related to the resource provider’s mission/business activities.
Scope of Work	The donor typically wishes to support the broad goal of an activity rather than delineating a specific course of action.	A specific commitment is made regarding the level of personnel effort or specific milestones.
Project Direction or Mentoring	Sponsor may identify an individual in the university as a point of contact, particularly if that person works in university relations or philanthropic functions of the corporation.	Sponsor identifies a technical monitor/ principal investigator/program director who is responsible for monitoring performance, arranging research visits and providing liaison between the University and corporate research teams.
Cost and Budget Information	Line item budgets are generally not required; however, general budgets which outline categories of support may be included as part of the proposal process and/or the gift agreement.	Budgets are generally required.
Facilities and Administrative (F&A) Costs	N/A	F&A Cost Rates defined cognizant agency
Award terms and conditions	The donor may request information related to the use of funds but places little or no restriction on review of results before they are made publicly available.	Award includes conditions for specific formal fiscal reports/audits and or invoicing.
Progress Reports	Investigators may provide updates on research progress and/or discoveries; these may or may not be a condition of the award.	Programmatic reports are generally required at the award or agency level.
Accounting & Financial Reports	Financial reports are limited to details of how, when, and to whom funds were disbursed as well as statement of earnings when applicable.	Financial reporting often requires detailed line item expense reporting, and is often subject to financial audit. Proposal and resulting award often include a line item budget that identifies expenses by activity, function, or project period and includes indirect costs.
Unspent Funds	Unspent gift funds generally do not have to be returned to the donor.	The sponsor may require that unspent funds be returned.
Disposition of Rights in Tangible or Intangible Property	Typically, the agreement does not include terms for the disposition of rights in tangible or intangible property	Can include clear instructions at the agency or award level for disposition of property.
Publication and Reporting	Donor may request copies of publications that result from activity supported with donated funds and ask to be acknowledged in such publications. Donor may also request annual progress reports or a summary of the types of activities supported. Smaller gifts do not usually require reports.	Terms of the award require publications or technical reports dealing with substantive aspects of the work. Principal Investigator is obligated to report project results.
Renewal	Normally no formal renewal. Additional funding may be provided at the discretion of the donor.	May be continued or renewed contingent on such things as technical review or satisfactory progress. (This implies that the sponsor is monitoring performance to determine if some set of expectations is fulfilled).
Compliance	While activity may involve compliance issues, enforcement is not a sponsor concern.	Sponsor requires University policy and/or certification regarding compliance issues, e.g., animal and human subject treatment, biohazardous materials oversight, export controls, etc.

 

The presence of any single factor does not represent the condition of a gift or a grant. To best determine if a transaction is a gift or a grant, administrators (central and departmental/unit) should consider these factors simultaneously.

 

Examples

 

Types of awards accepted and administered by OGCA

The presence of any one of the following conditions shall designate the award as a grant, and its administration shall be the responsibility of OGCA.

• The award is made by a governmental or quasi-governmental agency, or is from a private-sector sponsor that provides a subaward containing federal "flow through" provisions, i.e., federal, state, or other governmental fiscal/administrative compliance policy governs the project.
• The award is from a private-sector entity (including individuals) for the work of a specific faculty member(s), and requires the completion of programmatic objectives within a specific budget and time framework.
• The sponsor places restrictions on publication of data resulting from the work. This could include requirements that the sponsor review manuscripts, talks, etc., prior to submission for publication or presentation, and possible delays in publication or presentation until project intellectual property can be protected.
• The sponsor requests proprietary rights in data or inventions resulting from activities conducted under the agreement. This would include any reference to licensing options or arrangements for patents and/or copyrights developed during the work.
• Studies are to be conducted on substances/processes/products, etc. owned by the sponsor.
• The sponsor places restrictions on the use of funds and retains the right to revoke the award or to withhold payment for non-compliance. Examples of restrictions include the requirement for prior sponsor approval of deviation from originally approved budget items and disallowance of certain costs.
• The sponsor requires regular financial reports on the use of the funds, and/or status reports or detailed invoices.
• The sponsor requires that any unused funds be returned.
• The sponsor refuses payment, imposes penalties, and/or revokes the award for failure to meet the terms of the award.
• The sponsor participates in determining the work to be performed or services to be provided on the project.
• The sponsor hopes to gain economic benefit as a result of the work to be performed.
• The award comes from a corporation's research and development budget and is perceived by the company as a "cost of doing business" rather than a charitable gift, and the agreement terms and conditions reflect this intent.
• The sponsor includes a provision for audits by or on behalf of the funding source. Solicitations for grants must be approved by OGCA prior to proposal submission.

Types of Awards Accepted and Administered by UA Foundation

The following are characteristics that usually designate funds as gifts or donations, and they are to be managed by UA Foundation:

• The award is made by a private individual, private foundation, corporate foundation, corporation, private agency, or professional association and does not include required programmatic or technical reporting, but may include general financial reporting.
• The award is from a non-government source and the donor specifically intends the award to be a charitable gift as reflected by the absence of any delivery of goods or services or direct economic benefit to the sponsor. Indirect benefits such as tax advantages or goodwill derived from the contribution are not sufficient to affect the gift intent.
• The donor intends the gift to be irrevocable, relinquishing any right to reclaim the gift in its entirety or any unused portion or to invoke any penalties. Solicitations for gifts should be coordinated through the UA Foundation prior to submission. 

Guidance for the Purchase of Personal Computers and Electronic Devices on Sponsored Projects

 

For awards made on or after 12/26/2014 which are subject to the Uniform Guidance

Key Notes

This document is intended to serve as a guide for the UAF regarding the purchase of basic electronic tools with funds from sponsored projects. Recent changes in Federal regulations make computing devices allowable as direct costs on Federal awards if they meet certain conditions.

Computing Devices

Computing devices are defined in the Uniform Guidance, 2 CFR §200.20 and 2 CFR §200.94:

• Computing devices means machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or "peripherals") for printing, transmitting and receiving, or storing electronic information.
• A computing device is a supply if the acquisition cost is less than $5,000, regardless of the length of its useful life.

 

Throughout this guidance document, the term "computing device" will be used interchangeably with "computers" and "electronic devices." Examples of computing devices that are allowable if they are essential and allocable (see below) include:

• Computers - including, but not limited to desktop computers and laptop computers.
• Electronic Devices - including, but not limited to tablets, iPads, e-readers, printers, external hard drives. This is not a complete list and questionable items should be directed to your Dean or Director's office. Because of State and University regulations, smart phones and cell phones generally cannot be purchased.

Effective Date

Effective immediately, proposals with an expected start date of 12/26/14 or later may include costs for computing devices in accordance with the Uniform Guidance, as outlined below. New awards or incrementally funded awards with a new funding increment beginning on or after 12/26/14 also may proceed in accordance with this guidance.

Background

Prior to the release of 2 CFR 200 et al., also known as the Uniform Guidance, the Federal government's point of view was that computing devices were general purpose equipment that were unallowable on Federal awards. To charge computing devices as direct costs on Federal awards, PIs were required to demonstrate that unlike circumstances existed and that the devices were not administrative in nature. This will no longer be the case.

The Office of Management and Budget acknowledged in the preamble to the Uniform Guidance that technology improvements have helped lower the cost of computing devices below the Federal equipment threshold of $5,000 and, as such, these devices should be treated similarly to other items under this amount. With the advent of the Uniform Guidance, computing devices may be considered allowable direct charges under certain circumstances, so PIs will need to demonstrate that such costs fit the criteria in the Uniform Guidance. Computing devices that cost $5,000 or more and have a useful life of at least one year are considered equipment. This policy deals specifically with computing devices that cost less than $5,000, which means they are treated as allowable supply items, not as equipment.

Non-Federal Sponsors

The basic criteria for purchasing computing devices are similar for non-Federal sponsored projects, but may be more flexible depending on the sponsor. Principal investigators are recommended to include a justification for the purchase of computing devices with non-Federal funding, but divisional offices may have varying requirements. Please contact your Dean or Director’s office for guidance. Please note that written sponsor guidelines may prohibit the purchase of computers and electronic devices. All other sponsor restrictions, such as rebudgeting, prior approvals, notifications, etc., apply to the project.

Proposals

The device should be identified in the proposal budget and justified as to why it is essential and allocable to the performance of the award. Inclusion in the budget and budget justification is intended to enable the sponsor to review and concur with the need for the computing device. Written justification and/or approval is meant to prevent questions regarding the allowability of costs in event of an audit.

Modular Budgets

Not all proposals include detailed budgets; some sponsors allow the use of modular budgets. In the case of modular budgets, the PI and his/her department are expected to provide a written justification for a computing device. 

Post-Award

Not every cost can be anticipated at the time of proposal preparation. When a post-award need for a computing device is identified and prior to its purchase, an explanation of the need should be submitted to the appropriate College/School research contact. The purpose and benefit of the device to the specific project should be fully described in the justification.

If a computing device is purchased with sponsor or University funds, the device is the property of the University and should be retained by the department after the end of the award for ongoing research activities or for disposal in accordance with University policies.

If a computing device expense is deemed unallowable at any time, the cost will revert back to the PI, the PI's department/unit, and the college/school for recovery from an unrestricted source of funding.

Supplies versus Equipment

Consistent with the Federal and State definitions of equipment, the University has defined capital equipment as an article of nonexpendable, tangible property with a useful life of more than one year and an acquisition cost of $5,000 or more. Items with a useful life of less than one year or an acquisition cost of less than $5,000 are defined as supplies. That means most personal computers and laptops are defined as supply items, not as equipment.

For computing devices that are considered equipment (items with an acquisition cost of $5,000 or more with a useful life of more than one year), the devices fall into one of two categories: either general purpose equipment (2 CFR §200.48) or special purpose equipment (2 CFR §200.89).

General purpose equipment is equipment which is not limited to research, medical, scientific or other technical activities. Such equipment is unallowable as a direct charge, unless the Federal awarding agency or pass-through-entity has provided prior written approval.*

Special purpose equipment means equipment which is used only for research, medical, scientific, or other technical activities. Special purpose equipment is allowable as a direct cost, provided that the items have the prior written approval* of the Federal awarding agency or pass-through entity.

*The Federal-wide Research Terms and Conditions will continue to apply to awards in which they are incorporated.

Other Information

The UA Office of Information Technology (OIT) is available to consult, both pre- and post-award questions, about the effective ways to use computation in your research within the guidelines outlined here. In particular, such consultations during proposal preparation can help researchers get the most benefit out of their research budgets by identifying an appropriate mix of supplies, equipment, and services for the particular research in question.

UA/UAF has established relationships with vendors to obtain highly competitive prices on quality-tested products, including computing devices. PIs and departments are encouraged to take advantage of this easy-to-use system and the significant savings available through strategically sourced contracts. For further information, see Procurement and Contract Services.

Research Performance Progress Report (RPPR)

 

The Research Performance Progress Report (RPPR) is used by grantees to submit annual progress reports. Most federal granting agencies (including but not limited to: the National Institutes of Health (NIH), National Science Foundation (NSF), Department of Energy (DOE), and Office of Naval Research (ONR), Substance Abuse and Mental Health Services Administration (SAMHSA) require grantees to submit a progress or technical report on an annual basis or other frequency as determined by the federal sponsor. Once an award is received, review the grant’s terms and conditions to determine how to submit the RPPR and reporting frequency. Questions related to RPPRs can be forwarded OGCA.

These reports:

• Document accomplishments and compliance with the terms of awards.
• Are often required on an annual basis, though a sponsor may request them at different intervals.
• When required annually, reports should: describe scientific progress, identify significant changes, report on personnel and plans for next budget period.

Review the award and sponsor terms & conditions to determine frequency, content, and other requirements.

Late or missing progress reports can lead to delayed funding. In most cases, funding agencies will not release incremental funding without timely submission of a progress report.

Most sponsors allow the Principal Investigator (PI) to submit their annual progress reports directly to the sponsor.

Examples:

• NIH: Annual RPPR for SNAP eligible awards: eRA Commons
• Health Resources and Services Administration (HRSA) electronic Handbook
• NSF: Project Reporting in Research.gov

Information needed to complete an RPPR

• Basic institutional and project identifying data
• If your RPPR requires a Signing Official (SO), you should list the Authorized Organizational Representative (AOR).
• Accomplishments from past activity period and goals for upcoming activity period
• Outcomes or “products” from the activity such as technologies and publications
• Effort of all personnel, including all collaborators
• Impact of the project and major contributions
• for example: to the discipline, human resources (teaching, training), public knowledge, social conditions
• Changes to the project: delay in plans, changes in approach, compliance (animal use, human subject involvement, biohazards), other support, etc.
• Budget information (if required)
• If applicable: protocol for Animal Subjects or Human Subjects Enrollment data
• Specific to NIH RPPRs - review NIH Public Access Policy guidance

We recommend PIs reach out to their departmental/unit business office or OGCA for help completing the RPPR or locating more details for personnel calendar months, unobligated balances etc.

Consider delegating the ASST role in eRA Commons to someone who can help initiate or complete the RPPR in eRA Commons.

NIH Only

Featured Resources:

• NIH: RPPR FAQ
• NIH: Human Subjects System (HSS) Training Resources
• Inclusion Enrollment Submission Process
• Research Performance Progress Report (RPPR) Checklist – Under Post Award Forms
• NIH eRA RPPR Information
• NIH eRA Commons User Guide
• NSF RPPR Information

Research Terms and Conditions

 

Research Terms and Conditions

• Agency Implementation Statements - November 12, 2020
• Appendix A Prior Approval Matrix - November 12, 2020
• Appendix B Subaward Requirements - November 12, 2020
• Appendix C National Policy Requirements - November 12, 2020

Agency Specific Requirements

• DOC - 10/17
• DOE - 4/17
• HHS/NIH - 4/17
• NASA - 10/17
• NSF - 10/17, 4/17
• USDA/NIFA - 6/17

Research Terms and Conditions 2008-2011 (including supporting documents)

• June 2011 (side by side with A-110)
• July 2008 (side by side with A-110)
• Prior Approval Matrix, October 2008
• Prior Approval Matrix, July 2008
• Appendix B Subaward Requirements - June 2011
• Appendix C National Policy Requirements - November 2014

Agency Specific Requirements

• DOC - 2/13, 10/08
• DOD/AFOSR - 3/12, 7/08
• DOD/AMRAA - 10/11, 7/08
• DOD/ARO - 6/09, 7/08
• DOD/ONR - 2/11, 10/10, 7/08
• DOE - 7/08
• EPA - 3/14, 9/13, 1/13, 10/12, 2/11, 11/10, 6/09, 7/08
• HHS/NIH - 12/10, 7/08
• NASA - 7/08
• NSF - 3/14 (Significant Changes in 3/14), 2/14 (Significant Changes in 2/14), 1/13 (Significant Changes in 1/13), 02/12 (Significant Changes in 02/12), 10/10 (Significant Changes in 10/10), 1/10 (Significant Changes in 1/10), 1/09 (Significant Changes in 1/09), 7/08
• USDA/CSREES - 7/08
• USDA/NIFA - 10/14, 11/13, 4/13, 2/13, 5/12, 4/12, 7/11, 10/10, 7/10, 11/09
   

Sponsored Programs and Internal Controls

 

RATIONALE/​PURPOSE:

• Comply with the provisions of the federal Office of Management and Budget’s regulations, including 2 CFR 200, the Uniform Guidance, and other relevant sponsor requirements.
• Provide direction to faculty and staff for management of sponsored programs using an internal control framework.
• Promote the best possible alignment between faculty and staff activity and funding sources and, in so doing, enhance work at University of Alaska Fairbanks (UAF).
• Establish expectations for proposing, executing, managing, and monitoring sponsored programs in accordance with internal controls established and maintained by the University.

As one of the nation’s leading Arctic research institution, the UAF recognizes the importance of providing good stewardship of institutional and extramural funds. The University’s stewardship responsibilities include managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.

Support for the faculty’s research goals is critical to the success of the University. The purpose of this document is to foster excellence in research by promoting the successful management of sponsored programs through establishment and maintenance of effective internal controls. Internal control activities are important to several aspects of sponsored programs:

• Proposing the research goals and the funding and resources to support them
• Establishing policies and procedures, as well as roles and responsibilities, for administration and oversight of sponsored projects
• Charging expenses appropriately during the life of the project
• Managing the project in accordance with statutes, regulations, terms and conditions of the award, and University policies
• Monitoring activities and expenses during the period of performance, at the time of periodic reports, and prior to award closeout
• Documenting information and actions related to sponsored projects activity

 

SCOPE:

All faculty and staff who engage in or propose to engage in sponsored projects; All federal and non-federal sponsored projects.

All researchers who engage in sponsored projects will comply with University policies and sponsoring agency regulations regarding the management of awards in accordance with internal controls. In the course of managing sponsored projects, the University will evaluate and monitor compliance with Federal statutes, regulations, the terms and conditions of the award, and University policies. The University will take prompt action when instances of noncompliance are identified.

Internal control is a process involving people at all levels of the University and helps UAF achieve its objectives while also protecting its resources and reputation. The principal components of UAF’s internal control framework, which are based on Committee on Sponsoring Organizations (COSO) principles, include the following:

Control Environment – Commitment of leadership and senior management to effective internal control, adherence to high ethical standards, oversight by those in governance, and support of competent employees.

Risk Assessment – Dynamic and iterative process for identifying and analyzing risks towards achieving the organization's objectives, forming the basis for how risks should be managed, with the greatest risks receiving the greatest attention and control; consideration given to dollar amounts, nature of transactions, and impact on organizational reputation.

Control Activities – Actions established by policies and procedures to help ensure management directives to mitigate risks to the achievement of objectives are carried out at all levels of the organization, at various stages of operating processes, and over the technology environment.

Information and Communication – Information generated at operational levels and communicated across and up the organization to enhance decision-making; policies and procedures communicated downward through the organization to support internal control functions; information and communication to be fully integrated with the other components of the framework and includes communication with outside parties about internal control and accountability.

Monitoring and Review – Applies to all five components of internal control; need for timely and effective monitoring that provides feedback on the operation of the other components, and extends beyond financial reporting to compliance and operations.

The framework will:

• Create timely, reliable, and informative processes
• Help protect UAF’s reputation, funding, and future stability
• Allow for allocating appropriate resources to mission activities (teaching, research, and outreach)
• Provide a sound structure to support staff success in an ever-changing environment

Subawards

 

Incoming (Managed by OGCA)

An incoming subaward is a formal written agreement made between UAF and another organization (the prime recipient), where UAF will perform an intellectually significant portion of the scope of work (SOW) under the other organization’s sponsored project.  Funding is awarded to the prime recipient by the sponsor and then passed to UAF.

The UAF is a participating Federal Demonstration Partnership (FDP) Expanded Clearinghouse entity. Participating organizations agree to use FDP entity profiles to verify institutional information.  Here is UAF’s information as a participating organization.

Outgoing (Managed by UA Procurement and Contract Services)

An outgoing subaward is a formal written agreement made between UAF (the prime recipient) and another organization to perform an intellectually significant portion of the Scope of Work (SOW) under a UAF sponsored project.  Funding is awarded to UAF as the prime recipient by the sponsor and then passed to the subrecipient.  If you have an outgoing subaward please reference the subaward templates and policies on Procurement and Contract Services website.

Subrecipient Selection Process

The Principal Investigator for UAF is often in the best position to select the Subrecipient that will be included in the proposal. The selection is based on the potential Subrecipient’s technical experience and the ability to perform the portion of the scope of work being proposed to the Sponsor.

In accordance with the requirements contained within Title 2, Part 200 of the Code of Federal Regulations (2 CFR 200), hereinafter referred to as Uniform Guidance (UG), UAF is required to perform a series of monitoring efforts to ensure proper stewardship of Federal funds. Those efforts include Subrecipient/Subaward vs Contractor/contract/PO determinations, performing pre-award Subrecipient review, and monitoring the programmatic activities of Subrecipients throughout the life of each federal Subaward.  Subawards are also subject to additional federal agency-specific regulations established by the prime sponsor.  Although not required by state or Federal law to comply with Uniform Guidance, to the extent practicable, UAF will follow this guide as a best practices approach to the programmatic and financial monitoring and of its non-federal sponsored award Subrecipients.

Subrecipient vs. Contractor/Vendor/Supplier

Proper attention should be paid to the relationship.  There are many ways to work with third parties.  An outline of the factors in the determination in the relationship are listed below. NOTE: Contractors and Consultants are charged F&A on the full amount of the contract; subawards greater than $25,000 are excluded from the F&A base when using the MTDC base.  The Federal Demonstration Partnership provides a checklist to determine a subrecipient or contractor classification.

 

Subrecipient	Contractor/Vendor/Supplier
Scope: • Involves Analysis and Interpretation • Has a question to be answered	Scope: • Provides services explicitly requested by UF • Manufacture goods • Prototype creator – UF designs they manufacture • Website hosting • Turning over unanalyzed data from testing
Participates substantially in the design and direction of the overall scope of work.	Has not participated significantly in the design of the work
Has the freedom/ability to make decisions within the terms of the agreement	Has little or no independent decision making in the design or conduct of the work being completed
Makes operational decisions on how to carry out the work	Paid for deliverables only; not on a reimbursement for actual costs incurred
Generates Data and retains for future research use	Normally operates in a competitive environment with other like vendors; competes with other entities that provide the same services; provides similar goods to a number of entities; the goods are commonly available; the services are repetitive in nature (ex. testing, manufacturing).
Key Personnel on overall award	Responding to a quote or bid request from UF
Likely co-author on overall reports and publications	Unlikely to be a coauthor on publications

 

As an FDP member, UAF utilizes the Federal Demonstration Partnership Subaward Forms and Resources.  Information can be found at The Federal Demonstration Partnership Subawards.

All partners – subaward, vendor, or consultant are required to be registered as a vendor in the University of Alaska accounting system.

Frequently Asked Questions

 

What is the difference between a subaward and a subcontract?

The terms subaward and subcontract are often used interchangeably to indicate an agreement entered into with another institution or entity to conduct work under funding received by another entity from an external sponsor. However, under Uniform Guidance, Subawards are only issued to Subrecipients. Further, a Subcontract is technically for the procurement of goods and services under a sponsored project. Nevertheless, the function of the relationship is more important than the form or title of the legal instrument being used.

What information do I need to include in for a new subaward or subcontract?

• Subrecipient institution EIN and DUNS numbers
• Subrecipient PI name and contact information
• Subrecipient administrative name and contact information
• A clear statement of work to be performed by the Subrecipient PI
  • A scope of work provides a general overview of the Subrecipient’s role in the project. The scope of work does not need to detail the exact scientific methodology or programmatic processes involved in carrying out the proposed work, but rather should provide sufficient detail in order to determine whether the Subrecipient has fulfilled their requirements under the project.
  • A detailed budget for the amount being released
    • All Subrecipients must provide a budget and budget justification for their portion of the project. The budget and budget justification should provide sufficientdetail regarding the proposed expenses for the subaward.
    • Period of performance
    • Funding total to be released

What is involved in a Risk Assessment?

An organizational review is required under federally sponsored projects subject to the requirements of 2 CFR 200.331. UAF will also apply this review as a best practices approach to its non-federal sponsored award Subrecipients.

The Subrecipient Financial Questionnaire will be sent to Subrecipients as determined by the outgoing subaward which is managed by Procurement and Contract Services.

What is the difference between a fixed price and cost reimbursable Subaward?

Under a cost reimbursable Subaward, the Subrecipient invoices UF for expenses incurred under the subaward and then is reimbursed. The expenses, as always, should be allowable, allocable, and reasonable and invoices should include sufficient detail for audit purposes.

Under a fixed price agreement, various milestones and/or deliverables are established along with a corresponding price for each. Once a milestone is met or a deliverable received and accepted by the UAF PI, the Subrecipient may invoice for the corresponding amount due.  Invoices need not include details of expenses. The first milestone/deliverable may be full execution of the Subcontract which can be beneficial when dealing with entities that do not have the resources to incur expenses for later reimbursement.

What should a PI consider when selecting a subrecipient?

There a number of things that the PI should consider.   These include:

• The technical expertise (qualifications) of the subrecipient PI and institution
• Past experiences with the subrecipient PI and institution
• His/her availability to do the project during the anticipated project period
• The cost of the proposed subaward
• The type of entity

What should be requested from the subrecipient at proposal time?

• Obtain the name and contact information of the subrecipient's administrative person.
• Contact the administrative individual to let them know what is needed.   This would include:

• Subrecipient Letter of Commitment for those who appear on this list of pilot institutions

OR

• Subrecipient Commitment Form for those who do not appear on the list

It is important to use the right vehicle to ensure the pilot can proceed properly and to ensure that a subaward can be awarded.  Use of the wrong form will delay issuance of the subaward.

• Scope of Work (SOW)
• Budget in the format required by the sponsor
• Budget justification, as required by the sponsor   
• Anything else required by the sponsor such as current and pending support, biosketches, facilities statement, etc.... The needs will vary from FOA to FOA.
• Facilities and Administrative (F&A) rate agreement
• Fringe Benefits rate agreement
• Provide the subrecipient's administrative person with date on which you need the information in order to complete the overall proposal to be submitted by UAF.   This will help ensure that the UAF proposal as a whole can be circulated internally and submitted on time to the sponsor.

 

Supporting Documentation for Sponsored Projects (including Incoming Subawards)

 

Sponsors (both direct sponsors and pass-through entities) have the ability to request information pertaining to awards that they provide to University of Alaska Fairbanks (UAF). They seek access to records to ensure that awards are managed consistent with statutes, regulations, and the terms and conditions of the award. Typically, at UAF, these records or supporting documentation (also called back-up documentation) include screen shots from Banner or copies of other documentation.

The regulation describing the sponsor’s right to access records is 2 CFR 200.336. This includes a right to audit or examine records, as well as timely and reasonable access to personnel to discuss documents. (Audits are coordinated through RSP.)

In addition to the basic right to access documents, sponsors may request documentation as a result of a risk assessment. Federal agencies and pass-through entities are required to perform a risk assessment of applicants or subrecipients. This requirement is described in 2 CFR 200.205 for federal agencies and 2 CFR 200.331 for pass-through entities (PTE).

The agency or PTE has some flexibility to decide how to perform a risk assessment and how to use the results of the risk assessment. If either the federal agency or the PTE deem that working with an entity generates a certain level of risk (as determined by the sponsor), the Uniform Guidance allows them to add conditions to the agreement or subaward, per 2 CFR 200.207. If additional conditions are included in an agreement or subaward, it must also describe what action must be taken to enable the conditions to be removed. Among the possible additional conditions is the ability to require the recipient or subrecipient to provide more detailed financial reports.

Sponsors are obligated to monitor awards to ensure that they are being used for authorized purposes, as well as compliant with statutes, regulations, and the terms and conditions of the award. This includes both direct sponsors and pass-through entities who are compelled to review both programmatic and financial information.

There are multiple reasons why a sponsor or PTE may ask for supporting documentation, however, such requests may or may not be reasonable.

• If the request is for UAF to provide supporting documentation on an as-requested basis, that may be acceptable, so long as the requests occur only periodically (e.g., once per project period or once per budget year). Such a request may be part of a sponsor’s routine monitoring or may occur because the sponsor has questions about an invoice they have received.
• If the request is to provide supporting documentation for invoices on a regular, e.g., monthly, basis, that is an unacceptable request and should be questioned. Provision of supporting documentation on a regular basis would create significant burden for UAF and should not be included as a term and condition of the award.

 

• In the event that an award requires supporting documentation, departments must provide this information to OGCA for submission to the sponsor.

For questions regarding supporting documentation that arise during the Pre-Award process, please work with the OGCA analyst assigned to the award. For questions that arise during award management or closeout, please work with OGCA. For audit related questions, please contact OGCA.

Travel on Sponsored Projects

 

UAF faculty, staff, and students routinely travel in support of sponsored activities. The University reimburses travelers for necessary and reasonable business expenses incurred while traveling. Reimbursable expenses must conform to university policy, federal and state law, if applicable, and the restrictions placed upon sponsored awards.

• UA Travel Regulations and Guidance 

Domestic and foreign travel charged to sponsored projects should follow the guidelines set forth in this document, unless federal regulations or the funding agency imposes greater restrictions.

General Guidelines

Travel is allowable as a direct cost when such travel will provide direct benefit to the award. If federally funded, sponsored awards are subject to certain federal laws and the guidelines set forth in the Uniform Guidance, 2 CFR Part 200—uniform administrative requirements, cost principles, and audit requirements for federal awards.

Airfare other than lowest economy (ex. business or economy upgrade) is not allowable on Federally Sponsored Funds unless an exception is met and documented. Federal regulations (2 CFR §200.474.3(d)) require that airfare costs in excess of the lowest economy fare class are unallowable except when the latter would: 

• Require circuitous routing;
• Require travel during unreasonable hours;
• Excessively prolong travel;
• Result in additional costs that would offset the transportation savings; or
• Offer accommodations not reasonably adequate for the traveler's medical needs.

Exceptions for business-class or upgraded economy airfare must meet one of these criteria and be justified and documented to be allowable on a federal award. These exceptions require documentation and written approval. 

All awards are subject to specific agency restrictions, as well as the University of Alaska Travel Policy. The terms and conditions of the individual agreement should be reviewed prior to incurring and/or submitting any travel cost for reimbursement. When there is a conflict between University policy and award requirements the more restrictive policy applies.

The following list highlights some common sponsored travel restrictions. Some awards may:

• Prohibit foreign travel
• Require pre-authorization by Sponsor for each trip
• Restrict the number of trips that can be taken
• Restrict the number of travelers on an authorized trip
• Set a maximum dollar value per trip
• Allow attendance to a conference to present research, but not for the purpose of “staying current in the field”
• Limit travel to a specific destination or purpose
• Specify maximum meal, mileage or other cost rates.

Sponsored travel must be justified, well documented, in compliance with the sponsor requirements, and incurred within the period of the award. If this travel is either a requirement stated in the call for proposals, or clearly documented in the budget justification, no further documentation is required.

Travel documentation must provide sufficient clarity so that anyone reviewing the transaction can verify that it is allowable, allocable, and reasonable. Charges that are split between two or more projects must demonstrate how the trip specifically benefited each project respectively.

Sponsor-Specific Requirements

In addition to the University guidelines outlined above, sponsored-project funding is often subject to additional regulations set forth by the sponsoring organization. In most instances, federal and non-federal sponsors outline travel restrictions within the award notification or agreement, restricting the use of funds for certain types of travel or requiring the sponsor's prior approval for travel. While some agencies allow considerable leniency in the travel-approval process, others are quite strict.

Foreign Travel

Some sponsors may require approval prior to foreign travel. Refer to and follow sponsor terms and conditions or policy statement. It is the responsibility of the PI and department to use a certified U.S.-flag air carrier. There are limited circumstances under which a foreign-flag air carrier may be permissible. There may be an Open Skies Agreement, or other bi/multi-lateral agreement(s) that meet the compliance requirements of the Fly America Act.  Refer to your sponsor terms and conditions/policy statement to ensure compliance. 

If U.S.-flag air carriers, or agreements as cited above, are unavailable for any segments, including emergency situations, such variance must be documented and retained by the PI/department. Reference: Federal Travel Regulations, Chapter 301 Subchapter B, U.S. Flag Air Carriers (section 301-10.131 through 301-10.143)

Travel under Federal Agreements

Travel under federally sponsored agreements generally follows the cost principles set out in the Uniform Guidance (200:474 - Travel Costs) , as the federal government requires its funding agencies to incorporate those principles into their individual policy guidelines. The Fly America Act (U.S. Code Title 49 of the United States Code , Subtitle VII, Part A, subpart I, Chapter 401, 40118) outlines some key aspects of the federal requirements, generally requiring those traveling under federal agreements to use U.S. carriers for international air transportation.

Over the years, Fly America has been amended by a number of Open Skies Agreements established between the United States and various countries, allowing use of foreign carriers under specific circumstances. The most recent Open Skies amendment involves an air transport agreement between the United States and European Union. 

Travel Terms and Guidance

The Fly America Act is a federal regulation that states that any foreign air travel that is financed by federal funds must be booked on U.S. Flag Air Carriers, regardless of cost or convenience. This regulation must be followed by all University personnel, students, trainees, consultants and collaborators who are reimbursed for air travel with federally primed or federal pass through funds.

It is the Principal Investigator’s (PI) or his/her designee’s responsibility to ensure that all air travel charged to federally primed or federal pass through awards are in compliance with this regulation.

UAF generally requires travelers who will be reimbursed from federal grants or contracts to use U.S. flag air carrier service, consistent with the Fly America Act.  Long-term exceptions to the Fly America Act are: 

1. When the use of U.S. carrier service would extend travel time (including delay at origin) by 24 hours or more;
2. When the costs of transportation are reimbursed in full by a third party, such as a foreign government or an international agency; and
3. When U.S. carriers do not offer nonstop or direct service between origin and destination.

 

However, a U.S. carrier must be used on every portion of the route where it provides service unless, when compared to using a foreign air carrier, such use would:

• Increase the number of aircraft changes outside the United States by two or more
• Extend travel time by at least six hours or more
• Require a connecting time of four hours or more at an overseas interchange point

Note that U.S. carriers must be used even if foreign carriers offer tickets at a lower price, offer preferred routing, are more convenient. Additionally, exceptions should be documented via the Fly America Travel Reimbursement Exception Form.  

Exceptions to Fly America must meet one of the exception criteria and be justified and documented to be allowable on a federal award. These exceptions require documentation and written approval by a designated UA Travel official.

Open Skies

An additional exception to Fly America occurs when an Open Skies agreement is in place between the United States (U.S.) government and the government of a foreign country. There are currently four Open Skies agreements - with the European Union, Australia, Switzerland and Japan.  It should be noted that there are limitations to the use of non-US carriers under an Open Skies agreement notably that the current Open Skies agreements do not apply to Department of Defense-supported activities and there is a prohibition against non-US carriers if a City Pairs agreement exists.

Code Share

Please note that code-sharing agreements with foreign air carriers, whereby American carriers purchase or have the right to sell a block of tickets on a foreign carrier, comply with the Fly America Act Regulations. The ticket, or documentation for an electronic ticket, must identify the U.S. carrier's designator code and flight number.  However, some funding sources may not recognize code-sharing as being compliant with Fly America Act regulations. When the specific funding source policy is more restrictive than the Fly America Act, the more restrictive policy applies.

 

University Endorsement for Correspondence

 

Correspondence to external funding agencies concerning the administration of sponsored projects requires University endorsement prior to transmittal. Correspondence pertaining to post-award administration is reviewed by the Office of Grants and Contracts Administration (OGCA). Once reviewed, correspondence is endorsed for the University and forwarded to the appropriate funding agency; a copy is also forwarded to the principal investigator (PI). Upon receipt of a response from the funding agency, OGCA will notify the PI and the PI's department. Should the nature of the request involve rebudgeting or an extension of time, such action will be performed only after receipt of agency approval.