Post Award Workshop April 11, 2006

RESEARCH ACCOUNTING STAFF Julie Seppala, Director Tony Dupuis, Senior Research Accountant Tammy LaBissoniere, Senior Research Accountant Federal Project Federal Pass-Through & Foundation, State Setup & Close-Out Project Setup & Close-Out Thomas Holzberger, Assistant Research Accountant Pamela Givens, Assistant Research Accountant Industrial, REF, Faculty Development, Sponsored Billing, Purchase Project Setup & Close-Out Requisition Review Christine Gruver, Office & Account Assistant Karen Foltz, Office Assistant Expenditure Review Support Staff

Fiscal Responsibilities 1. University Wide Responsibilities  Every university employee has a responsibility to ensure that the university’s funds are used to advance the mission of the university and the academic needs of the student.  Individuals have the responsibility of ensuring that all authorizations or expenditures comply with university expenditure policies as well as with any sponsoring agency or donor restrictions and applicable policies.

Fiscal Responsibilities 1. University Wide Responsibilities (continued)  A good rule of thumb is to always consider the appropriateness of the expenditure. Should the expense be paid from public funds?  Fiscal controls must include a system of supervisor checks and balances at all levels of the organization for all expenditures. The reviewing of the monthly account statements and payroll reports for accuracy is one example of a check and balance. The Research Accounting Department is always available for consultation.

Sponsored Projects Responsibilities 1. Principal Investigator Responsibilities  Assurance of appropriateness, reasonableness, timeliness and allowability of expenditures  Management of expenditures within start and end dates, not to exceed award amount  Initiation of requests for re-budgeting and cost transfers/reallocations  Preparation of technical reports and provision of other deliverables  Review of interim financial reports on a monthly basis

Sponsored Projects Responsibilities 1. Principal Investigator Responsibilities (continued)  Documenting of cost-share/matching funds if required  Review of employee effort reports (payroll certifications)  Timely final financial close out of projects  Initiation of request for time extensions

Commonly Used Accounting Terms Index – Six digit letter/number combination assigned to a funded project that is used to identify the project in the accounting system. This is the number that you use when charging expenditures and setting up payroll. Account Code – The four or five digit letter/number combination that categorizes the sponsor budget and expenditures related to an award into specific categories (payroll, travel, supplies, etc). PI/Financial Manager – The individual listed in the award document as the person responsible for all aspects of a specific project.

Commonly Used Accounting Terms (continued) Encumbrance – An amount committed to an outside vendor through the use of a purchase requisition/purchase order for supplies, equipment or services. The obligation to the vendor has been made therefore this encumbrance reduces the amount available to spend. Facilities & Administrative Costs/Indirect Costs/Overhead - A federally negotiated rate for the recovery of costs that are incurred for common or joint objectives and, therefore cannot be readily and specifically identified to a particular sponsored project. The rate is comprised of two main components; Administrative Costs (both central & departmental) and Facilities (operations & maintenance). This rate is applied to Modified Total Direct Costs as the expenditures are charged to the index/project.

Commonly Used Accounting Terms (continued) Modified Total Direct Cost/MTDC - The direct costs charged to an index/project excluding equipment, tuition, and subcontracts over $25,000. Cost Share/Matching – The portion of total project costs that are paid from sources other than the sponsor. Cost share can be either dictated by the sponsor in the proposal solicitation or be a voluntary contribution shown to the sponsor in a proposal budget. MTU is obligated to identify and track the cost share expenditures. Reallocation – The term used to describe the procedure of moving an expense (including payroll) from one index to another or from one account code to another to correct clerical or bookkeeping errors.

Commonly Used Accounting Terms (continued) Transfer – The term used to describe the procedure for moving actual dollars from one index to another. Transfers out of sponsored indexes are not allowed. Transfers will always have an account code beginning with a T. Incentive Return – The amount of funds returned on a quarterly basis to the PI (6%), Department (12%), and College (7.3%). The incentive return is based on the actual amount of Overhead/Indirect Costs/Facilities & Administrative Costs collected in that quarter.

Commonly Used Accounting Terms (continued) Month End Statements Summary: This statement shows the funded budget by categories (account code), and total expenditures charged for each account code under each index. The report has the following columns: Current Month Activity, Year to Date (YTD), Activity, Budget, Project to Date (PTD) Activity, Open Encumbrance & Balance. Detail: This statement lists each expenditure, the amount, the date of the transaction and the source document (Purchase Order #, Invoice #, Journal Entry #). Payroll: This statement lists each individual who has been paid from the project, by account code. The statement includes both current month and cumulative year to date columns for hours and earnings.

How to Read a Month End Summary Statement

Month End Summary Statement Organization/Fund Summary Report Explanations and Definitions 1. Report Name: The Oracle report identifier and name 2. Department: The number used to identify University departments 3. Index/Fund/Organization: Numbers assigned by Research Accounting for identification/processing purposes. 4. Grant Contract Number: Sponsor assigned award number 5. Associated Indexes: List of indexes under the same Grant Contract Number (see #4) 6. Financial Manager: The person in charge of the fund 7. Start-End Dates: Dates in which costs need to be incurred 8. Cost Sharing Rate: Rate at which system calculates MTU’s share of expenditures 9. Overhead Rate: Percent of overhead charged to expenditures according to the sponsored agreement

Month End Summary Statement (Continued) 10. Proposal Number: Number assigned by MTU Research and Sponsored Programs 11. Current month’s ACTIVITY: Monthly activity for this fund and organization. See FYGDOR003A – Transaction Detail. A “+” indicates a debit (DR) and a “-“ indicates a credit (CR). 12. Year-to-Date Activity: Fiscal year-to-date activity 13. Budget: Total funded project budget 14. Project-to-Date Actual: Total Expenditures from the project’s start date 15. Open Encumbrances: Unpaid purchase orders. See FYPPUR001 - Purchase Orders by Department for transaction detail. 16. Balance: Represents the amount left to spend in a budget category; Balance = Budget – Project-to-date – open encumbrance 17. Project Value: Total of sponsor award amount and direct cost share 18. Subtotal of individual account codes in a specific category of expenses 19. PTD Direct Costs: The cumulative expenditures excluding overhead

Allowable & Unallowable Costs Regularly Requested Unallowable Costs: Local Telephone Costs Postage Office Supplies, Copy & Fax Charges Cell Phones Memberships Promotional Items Computers, Computer Components, Software

Reallocation of Expenditures Any expenditure allocable to a particular sponsored project may not be shifted to other sponsored projects in order to meet deficiencies caused by overruns. All reallocations should be made within 90 days of the original charge. The Principal Investigator of each index involved is required to sign the form. Additional signatures are required for reallocations 60 days after the original charge.

Reallocation of Expenditures (continued) Due to the fact that closely related work may be supported by more than one funding source, the reallocation of expenditures from one source of funding to another may be allowable. Provided that: 1. The expenditure is an allowable charge 2. The initial charge could have been appropriately charged to the other project 3. The charge is represented in the approved budgets of both projects. 4. The reallocation explanation clearly explains why the charge is appropriate to either project.

Reallocation of Expenditures (continued) The reallocation of expenditures form is located at: The payroll reallocation form is located at:

Project Closeout  The normal closeout period is 90 days, however, some projects require closeout as early as 30 days. All technical reports and deliverables should be completed and submitted by this date.  For projects with a positive balance the PI must inform Research Accounting what action to take. * If no advice is received the budget will be reduced/deobligated and the sponsor will not be billed in full, or funds will be returned to the sponsor.

Project Closeout (continued)  The PI needs to work closely with Research Accounting to correct deficits as soon as possible  The PI should identify a non-sponsored account with sufficient funds to cover the deficit

Questions ?

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