Research Budgets Pam Futch, Research Account Administrator Joy Moix, Research Program Manager

Objectives Learn what a budget is and how it is used. By the sponsoring agency By internal Administration Components of a budget. Direct costs Indirect costs PI Responsibilities as pertaining to budgets. Online tools provided to help PI’s manage budgets. Changes to approved budgets.

What is a Budget? A budget is a financial proposal that reflects the work proposed. Expected costs are outlined Should mirror the project description. Best estimate of funds needed to support the proposed work.

What is a Budget? Requirements vary by funding agency and funding mechanism. Budgets consist of three parts: The numbers The budget explanation or items The budget justification Sponsor will look to the budget To know how funding will be used. To know if costs are reasonable in relation to the proposed work. After award, to assist in measuring progress and success of the work.

What is a Budget? ACRI/Institution will look to the budget To determine if pre-approval of costs is needed before incurring an expenditure. To ensure the actual orders align with the budget justification, if specific. To ensure spending in the correct categories of the budget. To report expenditures to sponsor.

Review - Budgets A budget is ___________________ that reflects ______________.

Review - Budgets How could a sponsor use the budget?

Two Primary Categories of a Budget Direct Costs – costs that can be charged directly to a project Accounting System must capture costs specific to an award separate from other awards. Must be Allowable Necessary Documented Not expressly unallowable Reasonable Allocable Consistently treated Indirect Costs – commonly also referred to as Overhead or F&A (Facilities & Administrative) costs. ACRI must consistently treat costs as direct or indirect Must be sufficient to permit the preparation of reports required by terms and conditions; and the tracing of funds to a level of expenditures adequate to establish those funds have been used according to regs and terms and conditions. Talk about our assignment of individual account numbers. As it pertains to COBRE for federal reporting, we simply have to have one account, but we are using more than one account to keep track of some things internally. This isn’t the norm, but makes it possible for some Pis to track/order/etc.

Direct Costs Direct Costs – charged directly to your project Salaries Fringe Benefits Equipment Materials & Supplies Patient Care Costs Travel Consultants Subawards (Pass-through) Other For example, chemicals purchased for use on a specific project would only benefit that project. However, restocking general chemical supplies used for a variety of purposes would benefit many projects and may not be easily allocated to individual projects.

Indirect Costs Commonly also referred to as Overhead or F&A (Facilities & Administrative) costs. Depreciation Accounting ACRI support Building maintenance Costs that are incurred for common or joint objectives Cannot be identified specifically with a particular sponsored project Assessed as a percentage of direct costs. Negotiated with ACRI’s cognizant agency.

Notable items Certain items, paid for under certain funding types and for certain sponsors may be excluded from the indirect cost calculation, but not always. Subawards >$25,000 Equipment Participant Support MTDC – Modified Total Direct Costs A subset of total direct costs, excluding certain items Used to determine indirect costs using F&A rate Subawards-not always-cooperative agreements Participant support NSF

Notable Items - Subawards vs. Contractors Depends on the substance of the agreement with Federal agency and pass-through entities. Case-by-case determination whether agreement is to a subrecipient or contractor. Subrecipient – for the purpose of carrying out a portion of a Federal award Characteristics: Performance is measured in relation to whether program objectives were met. Responsibility for programmatic decision making. Responsible for adhering t applicable Federal program requirements Carrying out a program for a public purpose as opposed to providing goods or services for the benefit of the pass-through entity. Contractor – for the purpose of obtaining goods and services for the pass-through entity’s use. Provides goods and services within normal business operations Provides similar goods or services to many different purchasers Provides goods or services that are ancillary to the operation of the Federal program. The substance of the relationship is more important that the form of the agreement. Contract in federal verbiage should not be misconstrued as a contract in legal verbiage. Legal agreement could refer to subaward or contractor. Federal contract does not include subaward.

Review - Direct or Indirect? Urine collection supplies, cryolabels and cryovials for storage of urine used in a study of fat oxidation rates. Direct

Review - Direct or Indirect? Replacement ruler for ACRI Administrator, who misplaced hers. Indirect

Review - Direct or Indirect? IRB approved participant compensation, in the form of $25 Amazon gift cards, for a study on gene expression. Direct

Review - Direct or Indirect? Food and alcohol for pregnant rats that are part of a study on diet interactions during pregnancy. Alcohol was preapproved as necessary on the agreement.

Review - Direct or Indirect? A department administrative staff member is asked to order a USB flash drive by a PI. Could be either! Explain

PI Responsibility ACRI provides various support services in regards to budget Post Award Administrator and staff Online systems for accounting, grant tracking, and electronic ordering. eRequest Budgeting Ordering Paying Traveling PI Reporting Detail of actual expenditures Post Award staff and ACH Grants Accounting monitor expenditures for allowability, adherence to institutional policy and procedure, availability of funds, invoicing sponsors.

PI Responsibility eRequest and eRequest v.2 http://ereq.archildrens.org/RequestMenu.asp http://ereq2.archildrens.org/Core/RequestMenu.aspx PI must approve budget in eRequest PI must approve SAR in eRequest v.2 PI must approve expenditures in eRequest, or approve a designated staff member they entrust with approving expenditures. It is still the PI’s ultimate responsibility to ensure expenditures align with the objectives and approved budget, regardless of their designee being delegated authority to approve expenditures. eRequest can be used on mobile devices. Note: SAR’s cannot be approved via mobile device. Post Award staff and ACH Grants Accounting monitor expenditures for allowability, adherence to institutional policy and procedure, availability of funds, invoicing sponsors.

PI Responsibility PI should ultimately certify that any charges to their grant account are Allocable (applicable to this grant and no other, or proportionately applicable) Reasonable (prudent person test) Necessary to the performance of the work Allowable ACRI staff are on hand to assist in these determinations. PI should designate who can order or make purchases on their grant account and provide that person with tools to educate them with that particular grant.

Reviewing Expenditures PI Reporting http://ereq/ACHRIAccounting/login.asp Users granted “Budget access” in eRequest will have ability to drill down into expenditures to see details.

PI Reporting:

Could be either! Explain

Rebudgeting & No Cost Extensions Remember - A budget is a financial proposal Read your award. TAC may include verbiage about Carryforward Rebudgeting No Cost Extension deadlines Flexibility depends on sponsor and underlying need for rebudgeting or extension. Pre-approval may be required. Always best to err on side of “asking for permission rather than forgiveness”. ACRI staff can assist and in many cases will facilitate communication with the sponsoring entity. Flexibility-if change in scope, need permission. If saving on probiotics because they were donated, may use those savings for some other supplies. (Might also need to ask about cost share). If overrun on expected travel cost, may need to adjust elsewhere. If study was delayed in starting, may need to request NCE (no addtl $, but addtl time provided to finish same work).

Review What is the name of the online tool that can be used to order lab supplies through ACH Purchasing? Could be either! Explain

Review A PI was reviewing expenditures and found an expense hit their grant that doesn’t look familiar. What online tool was being used? What should the PI do about this questionable expense? Could be either! Explain

Happy Researching! Pam Futch, Research Account Administrator Joy Moix, Research Program Manager