1. Sponsored Programs at Penn Proposal Budget Preparation, Budgeting Using PennERA and Routing & Approval

2. Where Do You Start? Gather the Facts
Talk to the Principal Investigator (PI)
What is the Scope of Work?
Who is the Sponsor?
Where will the work be performed?
Collaborators?
Consultants?

3. Sponsor Guidelines Instructions and Contractual Terms
Requests for Proposal/Quote (RFP/RFQ)
Requests for Application (RFA)
Funding Opportunity Announcements (FOAs)
“Unsolicited” Applications
Send sponsor guidelines, instructions, contractual terms, etc., to Research Services

4. Cover Page PI Name Title Name of Grantee
Trustees of the University of Pennsylvania
Period of Performance
Amount Requested
Required Signatures

5. RFApplication RFQuotation RFProposal
November 27, 2018
RFQuotation
RFApplication
RFProposal
Government generates scope of work via Notices/Program Announcements.
You respond with how you will accomplish, budget and time frame.
Contract is usual award document for RFP/RFQ while a grant/cooperative agreement is usual award document for RFA.

6. Budget preparation is a collaborative effort!
Principal Investigator:
Should work with the Grants Manager to develop the budget.
Designates others who might have input, e.g., lab manager, research coordinator.

7. Reasons for carefully preparing the budget
Reduces the possibility of significant budget cuts by the sponsor.
Aids post-award management.
Aids the department in budget planning.
Significant budget changes are interpreted by sponsors as a change in scope!

8. Preparing the Budget Costs requested in proposal budget must:
Be Allowable (Factors used in determining)
Allocable
Reasonable
Consistently Estimated
Directly benefit the proposed project
Costs must be necessary for the performance of the award (OMB Circular A-21); SPP #2108, #2110, #2138

9. Regulatory guidance CAS 501 (app. OMB A21, 48 CFR 9905.501)
“The purpose of this standard is to ensure that each educational institution's practices used in estimating costs for a proposal are consistent with cost accounting practices used by the educational institution in accumulating and reporting costs.”

10. Other considerations Sponsor guidelines and limitations
Salary caps
F&A limitations
Direct cost or total cost limits
Expense category exclusions
Recover F&A as direct costs from non-governmental sponsors
SPP #2138 Direct Cost Expenditures for Non-Governmental Agencies
May be School-specific rules
• yesterday you heard about the accounting procedures of non-federal sponsors so I won’t go through that again here but just wanted to mention it since we are discussing today about building your budget and this may be a consideration while you are constructing your budget.

11. Preparing the Budget (Salary)
Salary requests are expressed as % effort or person months
Plan realistically
Determine the percent of effort for all personnel needed to conduct the project
Downward adjustments of effort may need sponsor approval
Percent of effort=Percent of salary requested
Cost sharing is discouraged
Avoid hourly rates
Cannot usually charge clerical salaries or administrative costs directly

12. Allowability of clerical and/or administrative staff expense
Generally part of F&A costs.
Possible exceptions (see OMB A21, Exhibit C):
Large, complex programs (e.g., Center grants).
Epidemiological studies, clinical trials.
Scheduling seminars/conferences attended by large numbers of participants.
Individual projects requiring project-specific tasks such as database management, human and animal protocols, etc. •

13. Preparing the Budget (Benefits)
Fringe Benefits are charged as a % of Salary
As of 6/05/12, rates on federally sponsored projects:
Full-time employees – 31.8%
Part-time employees - 9.7%
For non-Federal sponsors, add Spouse and Dependent Tuition Benefit (2.2% ) for full-time employees
Current F&A and benefits rates

14. Preparing the Budget (Equipment)
Definition
“Equipment” costs $5,000 or more per item, and has a useful life of more than 1 year
Includes computer software that meets this definition (capitalized computer software).
Accounting Policy #1106.0
Justification
Why is this item necessary to support the science?
When is it necessary?
Availability
Is the equipment available elsewhere in the University?
Competitive Bid Requirement
Talking point – equipment purchases budgeted over multiple years.

15. Preparing the Budget (Office Supplies)
Generally not treated as direct costs.
Can be allowable if specifically related to the project. For example:
Specific aim of the project is to create a manual or other instructional media.
Extensive human subjects data accumulation, questionnaires, etc., is required.
Must be necessary for conduct of project
OMB Circular A-21, Exhibit C
Add commentary about M&M’s…story…

16. Preparing the Budget (Travel)
Usually restricted to employees
Domestic
Foreign
Fly America Act if Federal $$
May require prior approval even if in budget

17. Preparing the Budget (Patient Care)
Defined in rate agreement: “…hospitalization and other fees associated with patient care whether the services are obtained from an owned, related, or third-party hospital or other medical facility…”
Excluded from MTDC base and F&A calculations.
• Evelyn to do some digging…..

18. What is not included in patient care?
Subject reimbursement and travel.
Costs of ancillary tests performed outside the hospital on a fee-for-service basis.
Costs accumulated in service centers at Penn, such as in Radiology for research patient care.
Consulting physician fees.
All of the above are “other” or “consultant” expense. •

19. Preparing the Budget (Subcontracts)
Budget, including F&A costs
Copy of F&A rate agreement
Statement of Work (SOW)
Cover page/Letter of Intent with Authorized Signature
Reps/Certs required by sponsor

20. Preparing the Budget (Consultants)
Penn staff usually cannot be included in this category
If applicable, must coordinate payment through Penn Payroll Office.
Consultant’s letter of intent and cost
All costs related to the consultant including travel are usually accumulated in this category.
Statement of Work
Consortium agreements typically used if consultants are identified as Key Personnel.

21. Preparing the Budget (Other Direct Costs)
Service Center charges
Tuition and Fees (Research Projects)
Post Doctoral Health Insurance
Publication Costs
Protocol Review fees, when appropriate
Rent, when appropriate, but excluded from MTDC.
Animal per diem.
Subject compensation and travel
SPP #2110 Federal Direct Cost Expenditures;
SPP #2138 Direct Costs Expenditures for Non-Government Organizations
Deleted the word fellow since we have fellows, researchers, etc. and instead just left at Post Doctoral…

22. Preparing the Budget (F&A Costs)
F&A = Overhead = Indirect Costs
Pays for many costs that cannot be allocated to a specific project, i.e. utilities, administrative payroll and other support services, etc.
The “Colleges and Universities Rate Agreement” contains the federally negotiated F&A rates
F&A usually expressed as a % of a base
Modified Total Direct Cost Base (MTDC)
Excludes equipment, patient care costs, student tuition, and fees, alterations and renovations, rental of off-site facilities and the portion of each subcontract in excess of $25,000
Check sponsor guidelines for appropriate base

23. Preparing the Budget (F&A Costs)
Which rate to use?
Research rates (on- and off-campus) [60% & 26%]
Certain DOD Contracts [62%]
Instruction [57%]
Other Sponsored Activities (on- and off-campus) [36% & 26%]
Examples: health or community service projects, seminars, conferences, exhibitions, lecture programs
Clinical Trials [28% Total Direct Costs (TDC)]
Corporate Contracts [62%]
Current agreement

24. When is the offsite rate applicable?
Use this rate whenever activity will occur for 3 months (or 25%) or more at a facility not owned by the University.
Consider preparing a split-rate budget when appropriate.
Remember that rent can be a direct charge when using the off-site rate.
Rent is excluded from MTDC and F&A calculations. •

25. Don’t overlook Are there humans involved? Are there animals involved?
Subject compensation and travel?
Related patient care costs?
Equate costs proposed to research plan, especially with the consents.
Are there animals involved?
Prepare detail cost estimate: include shipping and box charges.
Animal per diem?
Equate costs proposed to research plan. •

26. …and more Are there large pieces of equipment?
Installation and set-up included?
Maintenance contracts?
Space available or renovation costs included?
Provide a quote.
Are there pre- and or post-docs?
Tuition included?
Excluded from MTDC and F&A.
Health insurance costs listed?
Not excluded from MTDC. •

27. Budget Justification
Each line item usually requires specific justification.
Unusual or extraordinary expenses such as equipment, clerical salaries and administrative expenses, may require additional justification.
Check sponsor guidelines for requirements.

28. Other Considerations Specific Sponsor Requirements
NIH modular: ≤$250,000/year
Many non-Federal sponsors may not allow PI salary, benefits, travel, etc.
Penn Participation Agreement
Fix symbol! -- done
Moved this to new slides:
Check info for Penn Participation
Electronic Proposal Submission
Terms and Conditions
Regulatory Issues (Animals & Humans)

29. Terms & Conditions Terms and Conditions
Must be consistent with University mission of research, education and service
No bars on publication
University owns and controls intellectual property
Federal regulations appropriate to educational institutions are used

30. Budgeting Using PennERA Proposal Development (PD)
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

31. Budgeting Using PennERA PD
Type of budget is automatically determined by PD during proposal setup.
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

32. Budgeting Using PennERA PD
Type of budget is automatically determined by PD during proposal setup.
Proposal creator answers questions so that PD can “select” the correct configuration.
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

33. Sample Budget Configurations
Typical setup – can be detail or simplified entry.
Modified for NIH modular budget.
Federal S2S not requiring detail budget.

34. Budgeting Using PennERA PD
Two budget entry methods
Simplified
Minimal data entry
Use if not a Federal system-to-system (S2S) requiring a detail budget
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

35. Budgeting Using PennERA PD
Two budget entry methods
Detail
As required by Federal sponsor’s instructions
Can be used in any PD record
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

36. Detail – Personnel Expense

37. Detail – Personnel Detail Entry

38. Detail – Non-Personnel Expense

39. Detail – Non-Personnel Detail Entry

40. Detail – Subcontract Expense

41. Budgeting Using PennERA PD
Complete other sections:
F&A
Many proposals calculate F&A automatically
If manual entry is used, reset to autocalculation if editing expense data entry
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

42. Budgeting Using PennERA PD
Complete other sections:
Cost Sharing
Observe Penn’s cost-sharing policies
Complete cost-sharing form
Upload Budget Justification
see Curie (detail), Curie (simplified)
Can we put this before electronic proposal submission?

43. Routing & Submission

44. PI and BA Submit Proposal
PI and Business Administrator (BA) have completed all components in PD
Participation Agreement signed and filed in department
Upload internal documents (e.g., subaccount worksheet)
Proposal is certified by PI in PennERA
BA completes e-transmittal form
Record submitted to routing path for internal review.
Add screen shot of routing path after.

45. What’s a routing path?
…and…

46. What’s a routing path?
…and…
…and…

47. Research Services Review
Review e-Transmittal Form & PI certification for Accuracy & Completeness
Regulatory Issues
Determine Type of Award
F&A Cost Review
Conflict of Interest
Cost Sharing
Terms & Conditions if applicable
Check for electronic submission validation issues

48. Purpose of e-Transmittal
The Transmittal Form
Internal Form
Does not get submitted to sponsor
Uses
Departments, make commitments & determine that project is within total program and academic objectives of department
Deans, determine that project is consistent with the total program objectives of the school and that commitments for project (including any cost sharing/matching funds) are acceptable
Research Services uses it to create funds; accuracy matters

49. Proposal Routing and Submission
Approvals
If project includes faculty from multiple schools/departments
Plan for additional time to secure appropriate approvals
If project includes participation from another institution
Information from the other institution must also be obtained and presented in the application
Plan for delays
Electronic proposal submission issues
Administrative support assisting with multiple grant applications from multiple PI’s
Broken copiers, scanners
Change to add PennERA insertion

50. Proposal Routing and Submission
Applications requiring additional information (financial reports) require more time
Responses to RFP’s
Contractual terms sent to Research Services as soon as possible
Policy requires 5 days
PI’s transferring from another institution should begin the transfer process as soon as they have accepted a position at Penn
Observe individual School deadlines

51. Regulatory Issues IACUC IRB
PI Submits Protocol electronically for Human Subject research using the HS-ERA system and for Animals using ARIES.

52. Office of Regulatory Affairs
Administers
Institutional Review Board (IRB)
Institutional Animal Care and Use Committee (IACUC)
Provides Research Services with approval status for all protocols

53. Institutional Review Board
Protects the rights and welfare of human research subjects
Authorized to approve, require modifications in, or disapprove all research activities involving human subjects

54. Human Subjects Approval Requirements & Timelines
Approval of a human subject protocol for a new application is not required at time of submission
Unless mandated by sponsor
Approval can be “Just-in-Time” for NIH
Human subject protocol approval and appropriate education certification
Required to be in place prior to the awarding of a new project

55. Human Subjects Approval Requirements & Timelines (cont.)
For non-competing continuations the approval date must not be earlier than one year before the start date for which the progress report is submitted
If the protocol approval date does not meet this criteria the non-competing application will be delayed

56. Institutional Animal Care and Use Committee (IACUC)
Reviews and approves the care and use of animals in research

57. Use of Animals Approval Requirements & Timelines
Approval of an animal subject protocol for a new application is not required at time of submission
Unless mandated by sponsor
Approval can be granted “Just-in-Time” for NIH
Non-competing continuation applications must have a valid approval date at the time of submission

58. Reminders Electronic Proposal Submission
All Electronic Submissions are not created equal
Read the Instructions
Does the PI or Institution need to be registered users?
Is the required technology available at the Department? At ORS?
All electronic applications must be approved by ORS before submitting to sponsor even if a paper copy with signatures is required after electronic submission.
SPP #2102 Approval of Proposals
Make

59. Reminders continued… Meet the specifications of the announcement
Make it easy for the reviewers to see that you have done so
Awards are made to the Institution
Only Research Services is authorized to sign on behalf of the University

60. Questions???

61. Award Acceptance and Account Set-Up
Sponsored Programs at Penn
Award Acceptance and Account Set-Up

62. What is a Notice of Award (NOA)?
A notice of grant award-also referred to as notice, NOGA, NGA, sponsor notice, contract or award letter-is a notification from a sponsor indicating that a proposal has been funded.
Notice of grant awards are typically received by the Office of Research Services [Pre-award offices], although on occasion a PI may be notified directly.

63. What is Contained in a Notice of Award
General & Special T&C
Use of Animals/Human Subjects
Use of Interest Income
Use of Program Income
Reporting requirements
Programmatic
Financial
Property
Invention
PI Name
Dates of Performance
Current budget period
Total project period
Dollars
Direct, F&A
Current, project total
Cost Sharing
Contact information

64. Review and Negotiation
ORS Pre-Award and Corporate Contracts staff review sponsor terms and conditions for compliance with University Policy.
Non-standard terms may require negotiation or other measures to harmonize with University Policy.
Selected examples:
Intellectual Property and Tangible Research Policy
Publication
Financial Reporting Requirements
Governing Law
F&A rate (See SPP 2116 Recovery of F&A Costs)

65. Review and Negotiation
Considerations Specific to Corporate Contracts:
Expectations of corporate sponsors different from expectations of public sector sponsors:
Ownership of data and other intellectual output;
Confidentiality of work for which sponsor is paying;
Control over publication of research;
Responsibility/liability for harm that may arise from research or use of research output’
For clinical trials, rapid, frequently competitive, activation of protocols.

66. Review and Negotiation
Considerations Specific to Corporate Contracts:
Internal Review Process Adapted to Accommodate Projects Funded by Corporate Sponsors:
Agreements to be forwarded to Corporate Contracts for negotiation as soon as sponsor is willing to negotiate/final budget; IRB/IACUC submission not required;
Only items necessary for negotiation need to be forwarded;
See eform in Internal Documents in Penn ERA for step-by-step instructions for this parallel review process.

67. Award example - NIH NOA Section I: Award Data & Fiscal Information
Summary of totals for current and future years
Fiscal year of award
Indicates whether an unobligated balance has been applied to the award amount
NOA Section II:
Grant Payment Information
OIG Hotline Information

68. Award example - NIH NOA Section III: Standard Terms & Conditions
Grant program legislation and regulations
Restrictions on the expenditure of funds in appropriation acts
45 CFR 74 or 92 as applicable
NIH Grants Policy Statement
Carryover—automatic or prior approval
Included/excluded from Streamlined Noncompeting Award Process (SNAP)
FDP Institutions noted
FFATA/ARRA
Program Income

69. Award example - NIH NOA Section IV: Specific Terms and Conditions
Revisions
Cooperative Agreement
Restrictive terms
Information items
Staff Contact Information
Spreadsheet Summary

70. Exercise What is the name of the sponsor?
What is the name of Penn’s PI?
Is your award a grant or contract?
Is your award cost-reimbursable or fixed-price per patient?
What is the first year budget period?
What is the entire project period?
What is the dollar amount obligated under this award?
Are there any subcontracts?
Bonus: identify 1 or more specific term and condition.

71. Award Example - Foundation
Award layout varies by sponsor
NOA often references terms and conditions not explicitly named

72. Exercise What is the name of the sponsor?
What is the name of Penn’s PI?
Is your award a grant or contract?
Is your award cost-reimbursable or fixed-price per patient?
What is the first year budget period?
What is the entire project period?
What is the dollar amount obligated under this award?
Are there any subcontracts?
Bonus: identify 1 or more specific term and condition.

73. Account Set-Up

74. FCOI Compliance verified in BEN Financials & Sent
Account Set-Up
Notice of Award
(NOA)
Received and
Negotiation complete
FCOI Compliance verified
Status
Changed From
Proposal To Award
10 Business Days
Fund Attributes
Fund Parents
Special Budgets
Account Segments
Assigned in
PennERA & Sent to GL
Fund & Legacy
Number Created
in BEN Financials & Sent
to PennERA
AIS is Generated
Award Notice Uploaded
in PennERA

75. Funds and Accounts
New Funds are created for each year of the award when carryover of money from one year to the next must be approved by the Sponsor
New funds are also required when the F&A changes from one segment to another
Subaccounts are to be requested on the subaccount worksheet

76. Receiving the Award and the Account Information Sheet (AIS) AIS is issued online. NOAs are uploaded in the Attachments Tab in PennERA. For help:

77. Review the Award AIS is not substitute for award
PI is responsible for all terms
Review terms and conditions of award
Sponsor guidelines
Restrictions
Scientific reporting specifications

78. Review the AIS
Ensure Account End Dates Accurate (budget end or project end?)
Ensure Award on AIS matches Award on NOGA
Ensure FDP and/or SNAP
Ensure accuracy of F&A rate
Ensure proper PI name and Org#
If the AIS is for a continuation year, always check for budget periods funded with prior unobligated funds.
If errors occur,
Refer to Sample AIS and NOGA

79. Advance Accounts What is an Advance Account?
Use when high probability of award
Allows you to put charges on proper account
Avoid journal entries and payroll reallocations
Use with pre-award costs under expanded authorities
Easy to request
Link to Advance Account Request form located on the ORS home page
PSOM - Advance Accounts are approved and set-up by ORSS
All other schools - forward request to ORS Pre-Award

80. Advance Accounts (cont.)
Risks
Award may not materialize
Start date may be delayed
Not all sponsors allow “Pre-award” expenditures
Establish follow up routine
Has award materialized?
Is something holding it up?
3 month limit on advance accounts

81. Subaward Process BA/PI prepares subaward request form
Complete package sent as pdf to
ORS completes subrecipient monitoring, prepares subaward & sends to subrecipient
Subrecipient signs & returns
ORS sends notification to BA that the subaward is fully executed
Signed agreement uploaded to PennERA record
BA sets up Purchase Order
Subaward activity from request to execution noted in PennERA record activity log.
pam

82. Subrecipient Monitoring
A-133 report or audited financial statements required annually
Current F&A rate agreement
Risk Assessment – results indicate appropriate subcontract terms and conditions
pam

83. Questions???