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									 Principal Investigator
       Training
Financial Oversight of Sponsored Projects



                                Columbia University
               Office of the Treasurer and Controller
                                   Restricted Funds
                                              V0200H
 Principal Investigator Training
                           Purpose of Training




               PURPOSE OF TRAINING


To give PI’s the tools with which to exercise oversight by:
   •Making PI’s aware of Federal and University policies
   • Providing PI’s with guidance in exercising oversight



   Good fiscal management results from a joint effort
           between the PI and administrators

                                                 Office of the Treasurer & Controller
    Principal Investigator Training
                              Training Outline




                     TRAINING OUTLINE


• Why must the PI exercise oversight for the financial
  management of sponsored projects?
• Columbia policy on PI responsibilities for fiscal oversight
• Training limitations
• Federal and University policies - what every PI should know
• Key points in PI oversight- what every PI should do


                                                  Office of the Treasurer & Controller
Principal Investigator Training
                          Why the PI???




                  WHY THE PI ???

Financial oversight by the PI is necessary because:
  • agency regulations on appropriateness, etc.
  • relationship between application & award
  • relationship between scope & resources
  • must determine allocations to multiple projects
  • must insure adequacy of resources



                                            Office of the Treasurer & Controller
 Principal Investigator Training
                          HIH Compliance Issues




             N I H COMPLIANCE ISSUES

• Misuse of Funds
• Unallowable Costs
• Allocation of Costs (especially salary charges)
• Accelerated Expenditures
• Un-obligated Balances
• Cost Transfers



                                                  Office of the Treasurer & Controller
 Principal Investigator Training
               NIH Diagnostic Questions

           N I H DIAGNOSTIC QUESTIONS

• Who is recipient of sponsored support?
• Who is accountable?
• Who decides on allocation of costs or cost transfers?
• What is the allegiance of departmental administrators?
• Is the cost sharing information reported in applications
  linked with actual effort on government project?
• Does the organization promote compliance with Federal
  requirements or tolerate individual practice and
  interpretation?
                                              Office of the Treasurer & Controller
  Principal Investigator Training
        Columbia Policy on PI Responsibilities

    COLUMBIA POLICY ON PI RESPONSIBILITIES
Principal Investigators are required to exercise oversight of
the financial transactions and financial status of each grant
and contract sufficient to ensure that charges are:
   • reasonable and necessary
   • allowable under the terms & conditions of the award
   • properly allocated to & among the multiple awards and
     funding sources
   • limited to the funds awarded for the project

                                               Office of the Treasurer & Controller
Policy Statement 92-5
 Principal Investigator Training
                  Training Limitations

                TRAINING LIMITATIONS

The materials presented here are intended to aid the PI
in managing sponsored projects. They have general
applicability to most Federal research grants, and many
other Federal and non-Federal awards.
It is not possible to present training materials that cover
every situation, or every granting agency’s particular set of
regulations. If you are not sure about the applicability of a
particular provision to your project, check with your
departmental administrator, the Grants and Contracts
Office, or the Restricted Funds Division of the Controller’s
Office.
                                              Office of the Treasurer & Controller
Principal Investigator Training
             What Every PI Should Know

           WHAT EVERY PI SHOULD KNOW


   General rules                Travel and business
   Unallowable costs             expenses
   Re-budgeting                 Equipment purchases
   Cost transfers               Indirect costs
   Cost sharing                 Monthly review
   Salary/effort reporting      Agency reporting



                                          Office of the Treasurer & Controller
 Principal Investigator Training
                What Every PI Should Know

          WHAT EVERY PI SHOULD KNOW
General rules
• Costs must be related to the project charged
• Costs must be reasonable - prudent person test
• Costs related to multiple projects allocated:
       • on proportional benefit, where possible
       • on any reasonable basis, where necessary
• Costs may not be assigned based on fund availability,
  award expiration date or other inappropriate criteria
                                              Office of the Treasurer & Controller
    Principal Investigator Training
                  What Every PI Should Know
               WHAT EVERY PI SHOULD KNOW
  General Rules (continued)

   • Charges may not exceed project award
   • Limit charges within budget period to 115%
   • Pre-award costs, where permitted, limited to 90 days
   • Spending limits apply to total award, not necessarily
     individual FAS accounts
   • Unexpended funds may often be carried forward
When in doubt, check with your administrator, the Grants & Contracts
Office, or Controller’s Office (Restricted Funds)
                                                       Office of the Treasurer & Controller
    Principal Investigator Training
                What Every PI Should Know

             WHAT EVERY PI SHOULD KNOW
  Unallowable Costs
   • Federal regulations prohibit certain costs, most common:
          • entertainment
          • alcoholic beverages
          • air/rail fare in excess of lowest available
          • general office supplies
         • most clerical & administrative salaries
“Unallowable costs” is a Federal term denoting costs not
reimbursable under Federal grants & contracts
                                                  Office of the Treasurer & Controller
     Principal Investigator Training
                    What Every PI Should Know

                 WHAT EVERY PI SHOULD KNOW
   Unallowable Costs (continued)
  • University Policy Statements
           • 92-1 Unallowable Costs
           • 92-3 Clerical & Administrative Salaries
           • 92-4 Other Administrative Costs
  • May be charged to other sources when appropriate
           • Must use special subcodes (85xx)
“Unallowable costs” is a Federal term denoting costs not
reimbursable under Federal grants & contracts Office of the Treasurer & Controller
  Principal Investigator Training
              What Every PI Should Know

           WHAT EVERY PI SHOULD KNOW
Rebudgeting
• Modest re-budgeting generally allowed without agency
  approval
• Re-budgeting of more than 25% may be problematic
  (e.g.., change in scope)
• Significant re-budgeting of key personnel time indicates
  scope change


 Rebudgeting occurs when spending differs from budget
                                             Office of the Treasurer & Controller
 Principal Investigator Training
             What Every PI Should Know

          WHAT EVERY PI SHOULD KNOW
Rebudgeting (continued)
• Re-budgeting which affects ICR must go through Grants
   & Contracts Office
• Obtain agency approval where required




 Rebudgeting occurs when spending differs from budget
                                           Office of the Treasurer & Controller
 Principal Investigator Training
             What Every PI Should Know

           WHAT EVERY PI SHOULD KNOW
Cost Transfers
• Exceptional, not routine
• Done on a timely basis
• No parking of expenses
• Original expense incurred during award period
• Incorrect charges must always be removed
Cost transfers are used to correct, reassign or
redistribute costs between accounts
                                           Office of the Treasurer & Controller
 Principal Investigator Training
              What Every PI Should Know
           WHAT EVERY PI SHOULD KNOW
Cost Sharing
 • Cost sharing commitments on Federal projects can’t be
   satisfied from other Federal projects
 • Salary requests and charges to projects should generally
   reflect effort committed (i.e.., generally no cost sharing)
 • Over-expenditures on projects transferred to non-project
   accounts represent cost sharing
 • Must be readily verifiable in Univ. records
Cost sharing represents costs of carrying out a project not
charged to the project
                                                 Office of the Treasurer & Controller
  Principal Investigator Training
                 What Every PI Should Know

              WHAT EVERY PI SHOULD KNOW
Salary and Effort Reporting
• PI determines level of effort to be committed by personnel
• Salaries charged should be consistent with effort
• Significant variances in effort require redistribution
• No redistribution required for short term fluctuations
• Quarterly effort monitoring reports provide guidance
• Annual effort certification required
• Clerical & administrative salaries not generally allowable
  on Federal projects                          Office of the Treasurer & Controller
 Principal Investigator Training
             What Every PI Should Know
           WHAT EVERY PI SHOULD KNOW
 Travel and Business Expenses
• Limited to lowest commercial fare
• Must use U S carriers
• Travel meals limited to $80 ($15/25/40); Hotels $ 300
   • Charge excess to other sources
• Business meals
   • same limits as above
   • document business purpose and attendees
   • entertainment costs not business expenses
                                            Office of the Treasurer & Controller
 Principal Investigator Training
             What Every PI Should Know

          WHAT EVERY PI SHOULD KNOW
Equipment Purchases


• Definition: $2,000 and useful life 2+ years
• Re-budgeting into or out of equipment impacts ICR
• Purchases during the last 60 days of terminal year
  may be problematic
• University tags, tracks and capitalizes equipment.
  Report dispositions to Property Manager

                                                Office of the Treasurer & Controller
 Principal Investigator Training
              What Every PI Should Know

           WHAT EVERY PI SHOULD KNOW
Indirect Costs

• Necessary to support research and other projects, but
     can’t be precisely allocated to individual projects
• Include support costs related to:
   • facilities (utilities, maintenance, security, etc.)
   • libraries (university and departmental)
   • departmental admin (school/dept)
   • general admin (controller, purchasing, etc.)
                                                 Office of the Treasurer & Controller
 Principal Investigator Training
             What Every PI Should Know

          WHAT EVERY PI SHOULD KNOW
Indirect Costs (continued)

• also known as Indirect Cost Allowance (ICA), Facilities
  and Administration (F&A), or Overhead
• Recovered through application of an indirect cost rate
• Rate applied to MTDC (total direct excluding equipment,
  GRA tuition, subcontracts in excess of $25,000 and
  patient care costs
• Separate rates for on campus, modified off campus, off
  campus
                                            Office of the Treasurer & Controller
 Principal Investigator Training
              What Every PI Should Know

           WHAT EVERY PI SHOULD KNOW
Indirect Costs (continued)

• Rate in effect at time of competitive segment governs
  rate charged for entire segment
• University policy provides for full indirect costs unless
  funding agency policy requires a lower rate
• When a lower rate is applied, the institution loses real
  dollars


                                               Office of the Treasurer & Controller
  Principal Investigator Training
               What Every PI Should Know

            WHAT EVERY PI SHOULD KNOW
 Monthly Reports

 • Summary Account Statement (AM 090)
 • Detail Report of Transactions (AM 091)
 • Summary Payroll Account Distribution (Summary PAD)
 • Detail Payroll Account Distribution (Detail PAD)

The University provides standard monthly reports for review


                                              Office of the Treasurer & Controller
 Principal Investigator Training
              What Every PI Should Know

          WHAT EVERY PI SHOULD KNOW
Monthly Reports (continued)

• Reports should be reviewed to insure that:
   • improper costs are not charged
   • costs which should be charged are reflected
   • charges are consistent with the PI’s expectations
   • PI knows the overall financial status of project
   • significant variances from budget are identified
                                               Office of the Treasurer & Controller
 Principal Investigator Training
             What Every PI Should Know

          WHAT EVERY PI SHOULD KNOW
Monthly Reports (continued)
• Use of administrative staff encouraged, but PI
  must oversee review
• Process corrections and reallocations promptly
      • Resulting transfers to other sponsored projects
        normally limited to 60 days
      • No time limit on transfers from sponsored projects


                                             Office of the Treasurer & Controller
 Principal Investigator Training
              What Every PI Should Know

           WHAT EVERY PI SHOULD KNOW
Agency Financial Reporting
• Controller’s Office is responsible for financial reporting
• Reporting is based on expenditures in FAS
• Interim invoicing for reimbursement generally done
  without contact with department
• Final reporting after departmental reconciliation/signoff
       • PI should review to ensure concurrence
       • variances from FAS require documentation
                                                Office of the Treasurer & Controller
Principal Investigator Training
 Key Points-What Every PI Should Do
     KEY POINTS-WHAT EVERY PI SHOULD DO

• If you manage your own projects, review FAS monthly
• If projects are managed by others:
   • give administrator clear instructions on allocations
   • review project status with administrator periodically
• Make allocation decisions based on benefit/equity
• Never allocate based on fund availability or expiration


                                              Office of the Treasurer & Controller
  Principal Investigator Training
   Key Points-What Every PI Should Do
      KEY POINTS-WHAT EVERY PI SHOULD DO


• Don’t park expenses in project account only to be
  transferred at a later date
• Insure discrepancies are promptly resolved and corrected
• Review final reconciliation of project closeout to insure
  concurrence




                                                Office of the Treasurer & Controller
 Principal Investigator Training
                 Indicators of Problems

               INDICATORS OF PROBLEMS
  Watch out for these problem indicators:
• Unauthorized or inappropriate charges
• Unallowable costs
• Improper cost allocations
• Overdrafts
• Assignment of costs based on fund availability or
  project expiration
• Cost transfers (frequent, delinquent, etc.)
• Equipment purchases near end of project       Office of the Treasurer & Controller
  Principal Investigator Training
                      Questions?




                     Questions?




Richard Ruttenberg 854-1050 mailto:rr40@columbia.edu


                                         Office of the Treasurer & Controller
Principal Investigator Training
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                                Office of the Treasurer & Controller

								
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