Short-Form Proposals A Review Primer US DHHS / ASAM / PSC / FMS / DCA

What is a Short-Form Proposal & Who Can Use It? OMB Circular A-21, Section H., Simplified method for small institutions Total direct cost under Federal awards does not exceed $10M annually Where Federal cognizant agency approves institutions that exceed $10M

Basic Review Steps Verify that a rate is (still) needed Proposal is complete Proposal reconciles to Financial Statement Verify Math Confirm treatment of paid absences and other fringe benefits Review prior negotiations file Review indirect cost pool Review direct cost base Determine if there are any significant anticipated changes which would affect the negotiation

What’s the difference? Short-Form Long-Form Single institution-wide rate for all sponsored activities Single pool, single base Sponsored projects administration part of general administration Departmental administration limited to 20% of dean’s and dept. heads No cap on administration Choice of S&W or MTDC base Separate rates for major sponsored activities Multiple pools with multiple allocation and rate calculation bases Sponsored projects administration allocated to sponsored projects only Departmental administration allocated on dept.-by-dept. basis; 3.6% faculty allowance 26% administration cap MTDC base only

Advantages Easy to prepare Costs come directly from Financial Statements with minor reclassifications and adjustments Less documentation No on site reviews Minimal or no review if rate is reasonable and consistent with prior years

Disadvantages Single institution-wide rate for all sponsored programs Sponsored projects administration costs are part of General Administration Generally results in a lower F&A cost recovery

INITIAL PROPOSAL IS HHS THE COGNIZANT AGENCY? IS AN F&A RATE NEEDED? -Are only Federal Awards 8.0% Training Grants? -Are only Federal Awards Limited to Less Than Full F&A Rate?

REQUIREMENTS NEED TO SUBMIT: -F&A Proposal -Audited Financial Statements -Organization Chart -Copies of Initial Federal Awards -Copy of Fringe Benefit Policies -Description of Administrative Functions

F&A COSTS THOSE COSTS THAT ARE INCURRED FOR 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.

DIRECT COSTS DIRECT COSTS ARE THOSE COSTS: -THAT CAN BE IDENTIFIED SPECIFICALLY WITH A PARTICULAR SPONSORED PROJECT, AN INSTRUCTIONAL ACTIVITY, OR ANY OTHER INSTITUTIONAL ACTIVITY, OR -CAN BE DIRECTLY ASSIGNED TO SUCH ACTIVITIES WITH A HIGH DEGREE OF ACCURACY

Proposal Development F/S cost categories: F&A P cost categories: Instruction Research Public service Student services Scholarships & fellowships Auxiliary enterprises Academic support Institutional support Operations & maintenance Instruction Research Public service Student services Scholarships & fellowships Auxiliary enterprises Computer center Other direct costs Operations & maintenance Depreciation/Use Allowance General administration Library Departmental administration

Unallowable Costs vs. Unallowable Activities Unallowable Costs should be eliminated from the F&A computation Unallowable activities should be treated as direct costs and therefore included in the base for the development of the F&A rate.

Unallowable Costs vs. Unallowable Activities (UA) Capital Expenditures, Equipment Entertainment Fund Raising (UA) Student Activities, Commencement, Registrar Bad Debts Alumni Affairs (UA)

OMB Circular A-21 Unallowable Costs Section J.1.f. J.2. J.3. J.4. J.6. J.8.f.(2) J.9. J.11. J.12.a Cost Item Advertising and public relations costs Alcoholic beverages Alumni/ae activities Bad debts Commencement and convocation costs Tuition benefits for family members Contingency provisions Defense and prosecution costs Depreciation/use allowance of Federal-funded assets

OMB Circular A-21 Unallowable Costs (cont.) Section J.13.b. J.17. J.18. J.19. J.20. J.21.d. J.21.f. J.22.b. J.22.c. Cost Item Donations and contributions made by institution Executive lobbying costs Fines and penalties Goods or services for personal use Housing and personal living expenses Uninsured actual losses Insurance against defects Organized fund raising Investment counsel and staff

OMB Circular A-21 Unallowable Costs (cont.) Section J.24. J.25. J.28.d. & e. J.37.b. & c. J.42. J.45. Cost Item Lobbying Losses on other sponsored agreements or contracts Memberships, subscriptions and prof. activity costs Recruiting costs Selling and marketing Student activity costs

F&A Cost Pool Consisting of expenditures (excluding capital items and other costs specifically identified as unallowable) which customarily are classified under the following titles or their equivalents:

F&A Cost Pool General administration and general expenses Operation and maintenance, depreciation and use allowance (after appropriate adjustment for costs applicable to other institutional activities) Library Departmental administration expenses, which will be computed as 20 percent of the salaries and expenses of deans and heads of departments

General Administration and General Expenses (GA) General executive and administrative offices Excludes costs of student administration and services, student activities, student aid, and scholarships SWCAP Excludes unallowable costs College Work Study Eliminate Federal share of wages (80%)

Operations & Maintenance Eliminate O&M costs applicable to other institutional activities (OIA) in accordance with A-21, Paragraph H.2.b.(2) Some grantees don’t identify O&M separately in the financial statements

Depreciation Reconcile to the Financial Statements Includes the portion related to costs of the institution’s buildings, capital improvements to land and buildings, and equipment Adequate property records must be maintained Exclude: cost of land, cost borne by the Federal Government, cost used for matching Do not claim depreciation for OIA, Assets Under Construction, or Unused Assets

Library Audio-visual costs, if included here, allowed at 25% (75% goes into base) Audio visual center costs are considered Instruction related, and thus go in Base All costs less rare & museum-type books Credit for library fines

Departmental Administration Limited to 20% of the S&W and expenses of academic deans & department heads Effort reports are not needed to support DA costs DA will come from unrestricted funds

Direct Cost Base Salaries and wages Modified total direct cost Must include costs of unallowable activities, e.g., fundraising, investment management, alumni activities, public relations

MTDC BASE INCLUDES SALARIES AND WAGES FRINGE BENEFITS MATERIALS AND SUPPLIES SERVICES TRAVEL SUBAWARDS (UP TO $25K PER SUBAWARD)

MTDC BASE EXCLUDES EQUIPMENT CAPITAL EXPENDITURES CHARGES FOR PATIENT CARE TUITION REMISSION RENTAL COSTS SCHOLARSHIPS & FELLOWSHIPS SUBAWARDS IN EXCESS OF $25K

TYPES OF RATES PROVISIONAL FINAL PREDETERMINED