1. The Office of Research Services The Office of Research Support Services 1 REVISED AUGUST 28, 2006 Award Acceptance and Account Set-Up Sponsored Programs at Penn Spring 2006

2. The Office of Research Services The Office of Research Support Services 2 REVISED AUGUST 28, 2006 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 ORS’ home page –http://www.upenn.edu/researchservices/pdfs/advance.pdfhttp://www.upenn.edu/researchservices/pdfs/advance.pdf

3. The Office of Research Services The Office of Research Support Services 3 REVISED AUGUST 28, 2006 Advance Accounts (cont.) Risks –Award may not materialize –Start date may be delayed –Not all sponsors allow “Pre-award” expenditures –Advance Account may complicate negotiations Establish follow up routine –Has award materialized? –Is something holding it up?

4. The Office of Research Services The Office of Research Support Services 4 REVISED AUGUST 28, 2006 What is a Notice of Award (NOA)? An official written communication from a sponsor providing financial support for a proposed sponsored project

5. The Office of Research Services The Office of Research Support Services 5 REVISED AUGUST 28, 2006 What is Contained in a Notice of Award PI Name Dates of Performance –Current budget period –Total project period Dollars –Direct, F&A –Current, project total Cost Sharing Contact information General & Special T&C –Use of Animals/Human Subjects –Use of Interest Income –Use of Program Income Reporting requirements –Programmatic –Financial –Property –Invention

6. The Office of Research Services The Office of Research Support Services 6 REVISED AUGUST 28, 2006 Account Set-Up

7. The Office of Research Services The Office of Research Support Services 7 REVISED AUGUST 28, 2006 Account Set-Up Notice of Award (NOA) Received 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 Status Changed From Proposal To Award

8. The Office of Research Services The Office of Research Support Services 8 REVISED AUGUST 28, 2006 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 –Exception is for the federal research rate that is currently in effect 57/57.5% Subaccounts are to be requested on the subaccount worksheet

9. The Office of Research Services The Office of Research Support Services 9 REVISED AUGUST 28, 2006 Receiving the Award and the Account Information Sheet (AIS)

10. The Office of Research Services The Office of Research Support Services 10 REVISED AUGUST 28, 2006 Reviewing the AIS and the NOGA Things to look for: Ensure Account End Dates Accurate (budget end or project end?) Ensure Award on AIS matches Award on NOGA Ensure FDP and/or SNAP If the AIS is for a continuation year, always check for budget periods funded with prior unobligated funds.

11. The Office of Research Services The Office of Research Support Services 11 REVISED AUGUST 28, 2006 Review the Award AIS is not substitute for award Review terms and conditions of award Sponsor guidelines Restrictions

12. The Office of Research Services The Office of Research Support Services 12 REVISED AUGUST 28, 2006 Subcontract Process Two Scenarios –Notice of Award arrives with subcontract included ORS contacts BA to verify subcontract information –BA notifies ORS subcontract needed/requested Sponsor approval may be required ORS prepares subcontract & sends to subrecipient –Subrecipient signs & returns ORS sends to BA –Cover letter –Signed agreement –Guidelines for BEN Financials Purchase Orders & Sponsored Program Subcontracts BA sets up Purchase Order

13. The Office of Research Services The Office of Research Support Services 13 REVISED AUGUST 28, 2006 Subcontract Process (cont.) PI & BA manage subrecipient invoices PI & BA manage subrecipient activities –PI must determine if work is satisfactory and approve payment Establish strong lines of communication with contact at other institution

14. The Office of Research Services The Office of Research Support Services 14 REVISED AUGUST 28, 2006 Establishing Subcontract in BEN Financials Department verifies Supplier (Subcontractee) information is in BEN Buys –Supplier Name & Site Confirm available funds & that subcontract OBJC’s have been budgeted correctly –OBJC 5332 (up to $25,000 charged F&A) –OBJC 5333 (over $25,000 no F&A charged)

15. The Office of Research Services The Office of Research Support Services 15 REVISED AUGUST 28, 2006 Establishing Subcontract in BEN Financials (cont.) Generate a Purchase Order (PO) –Executing a requisition in BEN Buys Provide Sole Source Justification –An approved requisition will generate a PO –PO approval follows normal PO hierarchy Manage PO –All subcontract payments to supplier must be approved by responsible PO Manager –“On-line receipts” required for all subcontract PO’s Use “Receipt Required” field for PO’s less than $5,000

16. The Office of Research Services The Office of Research Support Services 16 REVISED AUGUST 28, 2006 Reference Documents Guidelines for BEN Financials Purchase Orders & Sponsored Program Subcontracts –http://www.upenn.edu/researchservices Requisitioner User Guide & PO Manager User Guide –http://www.finance.upenn.edu/ftd/documentation –Requisitioner User Guide Creating a Requisition Entering Receipts –PO Manager User Guide Managing the PO Viewing Invoices Entering Receipts

17. The Office of Research Services The Office of Research Support Services 17 REVISED AUGUST 28, 2006 The FDP Federal Demonstration Partnership is a cooperative initiative among federal agencies and institutional recipients of federal funds. It was established to increase research productivity by streamlining the administrative process and minimizing the administrative burden on principal investigators while maintaining effective stewardship of federal funds. Penn is a participating institution Many of the recommendations of the FDP have been included in expanded authorities.

18. The Office of Research Services The Office of Research Support Services 18 REVISED AUGUST 28, 2006 Carryover Authority & SNAP Carryover Authority –Generally R’s, K’s and P01’s, but always check the Notice of Grant Award. SNAP Streamlined Non-competing Award Process –Generally R’s, K’s –A grant must have carryover authority if it is under SNAP

19. The Office of Research Services The Office of Research Support Services 19 REVISED AUGUST 28, 2006 Importance of Expanded Authorities/FDP Allows some administrative privileges authorized by A-110: Automatic carryover of unobligated balances across budget periods and competitive segments (except when noted in the Award) Up to one year no cost extension if requested 10 days prior to end of budget period (to complete project & not spend the $)

20. The Office of Research Services The Office of Research Support Services 20 REVISED AUGUST 28, 2006 Importance of Expanded Authorities/FDP Waive most cost related and administrative “prior approvals” except: –Change in scope or objective of the project –Change in key personnel –Requests for additional funding –Other exceptions as noted Allows for 90 day Pre-award startup costs

21. The Office of Research Services The Office of Research Support Services 21 REVISED AUGUST 28, 2006 Remember! At Penn, grants with automatic carryover retain same fund # for the entire segment. –An exception to this rule is subcontracts. All grants without automatic carryover receive a new fund # every new budget period. Understanding this most basic concept helps you understand when a fund # should expire, require a closeout, or when an advance account may be needed as the project continues. IT IS VITAL TO UNDERSTAND THIS!!!! IT IS VITAL TO UNDERSTAND THIS!!!!

22. The Office of Research Services The Office of Research Support Services 22 REVISED AUGUST 28, 2006 Basic Terms to Know Revenue Recognition PBIL and PBUD FSRD and FSRI Operating Budget Object Code 1220 Receivable Adjustment Period MTDC Encumbrance/Unliquid ated Obligation Unobligated Balance Letter of Credit

23. The Office of Research Services The Office of Research Support Services 23 REVISED AUGUST 28, 2006 Revenue Recognition Revenue Our entitlement to be reimbursed by the sponsor for the allowable expenditures of the grant An equal $ of Revenue is recognized for every $ of allowable expense in object code 4600 Grant Revenue Unallowable expenses and expenses above the award amount do not recognize revenue Revenue does not necessarily reflect the cash received from the sponsor WHAT’S WRONG WITH CHARGING AN INDIRECT COST DIRECTLY TO THE GRANT ?

24. The Office of Research Services The Office of Research Support Services 24 REVISED AUGUST 28, 2006 Other Potential Sources of Revenue on a Grant Fund University Funded Cost Sharing - Object Code 4822 TIF (Interest) Income - Object Code 4780 Program Income - Object Code 4620 In the end (at closeout and disablement of the fund), all sources of Revenue must equal Total Expense.

25. The Office of Research Services The Office of Research Support Services 25 REVISED AUGUST 28, 2006 Grant Receivables (Object Code 1220) As payments are received from the sponsor, the Receivable decreases (a credit) As Revenue is recognized (a credit), the Receivable increases (a debit) Positive Receivable: Expenditures > Cash Received Negative Receivable: Cash Received > Expenditures

26. The Office of Research Services The Office of Research Support Services 26 REVISED AUGUST 28, 2006 Grant Receivables (Object Code 1220) LOC Letter of Credit funds have a zero receivable. The actual receivable resides in a special holding fund for all funds under the specific LOC.

27. The Office of Research Services The Office of Research Support Services 27 REVISED AUGUST 28, 2006 Special Object Codes (entered by Research Services) PBIL - The Maximum Billable Award PBUD - Authorized Project Budget FSRD - The Total Direct Costs reported to the sponsor FSRI - The Total Indirect Costs reported to the sponsor

28. The Office of Research Services The Office of Research Support Services 28 REVISED AUGUST 28, 2006 More on PBIL PBIL Serves as the control and limits revenue recognition up to award amount Gets reduced to reported amount and guarantees that revenue recognition above reported amount does not occur Will always be rounded to nearest dollar. Cents will only show if there has been a carryover of funding from a previous fund (increase) or has been adjusted to the reported amount (decrease)

29. The Office of Research Services The Office of Research Support Services 29 REVISED AUGUST 28, 2006 More on PBUD PBUD Most often equal to PBIL except on advance accounts

30. The Office of Research Services The Office of Research Support Services 30 REVISED AUGUST 28, 2006 Operating Budget (Entered by Administrator)

31. The Office of Research Services The Office of Research Support Services 31 REVISED AUGUST 28, 2006 Unliquidated Obligations/ Unobligated Balance Unliquidated Obligations –Commitments of the budget period not yet paid –When reported funding gets reserved in the next budget period so they can be paid –Must liquidate within 90 days (A-110) –Can not be reported in the final period Unobligated Balance –unspent and uncommitted –may be able to carryover automatically or with approval

32. The Office of Research Services The Office of Research Support Services 32 REVISED AUGUST 28, 2006 Questions???