1. FSU’s Policy on Advances CReATE CReATE ver. 5/13 © 2013 Florida State University. All rights reserved

2. Policy Policy on Advances for Externally-Funded Projects and Initiating Work without an Award

3. Purpose of Policy To ensure the timely start-up (or uninterrupted continuation) of sponsored projects before a fully-executed award or amendment is received.

4. Policy Without an advance authorized by SRS/FSURF: Absolutely no work is to be started; and Subcontractors cannot be authorized to start work. (Even with an approved advance, subcontractors are rarely authorized to work prior to FSU’s receipt of the award.) Costs incurred prior to advance approval will not be allowed to be charged or transferred to the new project, or any other sponsored project.

5. Applicability This policy is applicable to: Externally-funded projects that have been approved for funding, and/or Extensions for which fully-executed award documents have not been received.

6. Criteria for Authorization All of the following criterion should be met for an advance to be considered: 1. Sponsor assurance of funding has been received. 2. There is a valid reason for the advance. 3. The department or college has agreed to provide backing.

7. Criterion #1 – Sponsor Assurance The University should receive written or verbal assurance from the sponsor that a project has been recommended for funding. The assurance should include:  Recommended start and end dates,  Amount of initial obligation of funds,  Project budget (if different from the proposal), and  The anticipated receipt date of an award document.

8. Criterion #2 – Valid Reason The valid reason must be that any delay in starting or continuing critical program requirements may adversely impact the program or significantly increase the cost. Critical program requirements include but are not limited to:  The continuation of essential project employees; or  Urgent project expenses (such as purchasing equipment or traveling) require immediate action.

9. Criterion #3 – Backing The department shall assume the risk by providing financial backing of all direct costs advanced. NOTE: The department is advised to limit its exposure to risk by limiting the amount of advance and/or the period of the advance.

10. Responsibilities Principal Investigator Ensure that FSU employees do not start work nor incur project expenses without an approved advance. Ensure that subcontractors do not start work without a fully-executed subcontract. Stop work or request an additional advance if the advance period expires or the advance funding has been exhausted.

11. Responsibilities Chair/Director/Dean Authorize advance accounts. Ensure sure that charges on the advance project are absolutely essential and cannot be deferred. Ensure that the PI stops work when the advance period expires or funding is exhausted. Assume the risk for costs incurred on advances.

12. Responsibilities (cont’d) SRS/FSURF Review appropriateness of advance request, and approve as needed. Follow up with the sponsor, in conjunction with the PI, about the anticipated award.

13. Risks Associated with Advances For cost reimbursable awards, costs may be disallowed if they are incurred outside the approved period of performance or budget. The University may not be able to accept the award if the terms are unacceptable and the sponsor refuses to change them.

14. Risks Associated with Advances The sponsor may decide not to issue an award. Starting work (performing services and/or delivering work product) may be construed as automatic University acceptance of the award terms and conditions, resulting in the University having a poor negotiating position.

15. Reminder Costs incurred prior to approval of an advance will not be allowed to be charged or transferred to the new project, or any other sponsored project.

16. Questions

17. Program Income CReATE CReATE ver. 5/13 © 2013 Florida State University. All rights reserved

18. Policy Applies to externally-sponsored projects Does not apply to revenue generated by sources other than sponsored projects

19. Definition Gross income that is directly generated by a supported activity, or earned as a result of a sponsored project.

20. Examples Program Income includes, but is not limited to: Conference/workshop registration fees; Fees for services performed, such as laboratory tests; The sale of software, publications, research animals; and License fees and royalties on patents and copyrights.

21. Background Sponsors provide funding to cover costs of conducting research, training, and public service-related activities. Program income may be generated as a result of these activities and in some cases must be reported to the sponsor. Federal regulations document the rules regarding program income.

22. F&A Costs F&A should be included when determining the registration fee, price of materials, etc. F&A will be charged to program income accounts at the same rate applied to the sponsored agreement which generates the income.

23. Treatment Four methods of treating program income: 1. Additive Method – Income is added to the funds obligated by the sponsor (and the University if cost sharing is involved), and used to further eligible project activities or objectives. 2. Deductive Method – Income is deducted from the amount of project costs to be reimbursed by the sponsor.

24. Treatment (cont’d) 3. Matching Method – Income is used to finance the costs of a project not borne by the sponsor (i.e., used to fulfill matching or cost sharing requirements). 4. Additive/Deductive Alternative – Income received up to a maximum amount is added to the funds obligated by the sponsor. After the maximum amount is reached, the income is deducted from sponsor obligation.

25. Use of Income Program income revenue should be used before expenses are reimbursed by the sponsor. Program income must be spent in accordance with the award and OMB Circular A-21. Expenses that are unallowable on the sponsored project may also be unallowable on the program income account.

26. Reporting Program income will be included in official financial reports and/or invoices submitted to the sponsor by SRAS, if required by the terms of the award. The following is not reportable as program income: Royalty income. Income received on non-Federal awards that contain no accounting or reporting requirements for program income.

27. Responsibilities Principal Investigator Ensure that any activity that could generate program income is disclosed to SRS/FSURF. Maintain documentation related to the use of facilities or attendance of workshops, conferences, etc. Invoice for fee, product or service and deposit income through SRAS or FSURF as appropriate. Monitor account expenditure levels to ensure that program income is spent first as appropriate. Ensure that costs charged to the program income account are allowable per OMB Circular A-21.

28. Responsibilities (cont’d) Chair/Director/Dean Ensure that any activity that could generate program income is disclosed to SRS/FSURF.

29. Responsibilities (cont’d) SRS/FSURF Advise investigators and University staff on the proper handling of program income. Review the proposal for anticipated program income and ensure sponsor applications forms are completed accurately. Determine appropriate method of treating program income, if proposal is awarded. Facilitate setup of, and increases to, program income budget when revenue is received.

30. Responsibilities (cont’d) SRAS Determine the program income reporting requirements. Process deposits and increase budget appropriately. Monitor account expenditure levels to ensure that program income is spent first as appropriate. Ensure that costs charged to the program income account are allowable per A-21. Report program income as required by sponsor. At project closeout, address program income account balance per the terms of the award.

31. Income Generated after Award OMB Circular A-110 specifies: “Unless Federal awarding agency regulations or the terms and conditions of the award provide otherwise, recipients shall have no obligation to the Federal Government regarding program income earned after the end of the project period.” SRS/ FSURF will advise the PI on the appropriate method of accounting for income earned after the award has expired.

32. Record Retention Retention of program income records is identical to the retention requirements of award records which are specified in the of the award. Documentation related to program income must be retained in the Department for a period of three (3) years following final payment by the sponsor, unless the award indicates a longer retention period or there is audit/litigation still in progress. Examples of program income documentation include, but are not limited to: Documentation related to how the registration fee, equipment usage fee, price of materials or publications etc., was determined. Sign in sheets for attendees of workshops, conferences, etc.

33. Questions

34. Participant Support Costs CReATE CReATE ver. 5/13 © 2013 Florida State University. All rights reserved

35. Purpose of Policy To ensure that funds provided for participant costs are separately accounted for, and expended for appropriate and intended objectives.

36. Background Participant support is provided by a number of federal agencies and other sponsors. NSF has the most restrictive policies governing participant support costs. Therefore, FSU’s policy is based on NSF requirements.

37. Definitions Participants or trainees (but not employees) -- the recipients of a service or training provided at a workshop, conference, seminar, symposium, or other short-term instructional or information sharing activity. Participants may include students, national scholars and scientists, private sector representatives, agency personnel, teachers, and others.

38. Definitions (cont'd) Participant supports costs -- direct costs for items such as stipends* or subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with meetings, conferences, symposia, or training projects. * A payment made to an individual to provide for the participant’s expenses during the period of the training or other activities. A stipend is not considered compensation for services normally expected of an employee.

39. Policy Funds provided for participant support may not be used by the University for other categories of expense without the specific prior written approval of the sponsor. The University will set up a project budget for participant support costs separately from other funds awarded under the grant. Participant support allowances may not be paid to trainees who are receiving compensation, either directly or indirectly, from other Federal government sources while participating in the project.

40. Policy A non-NSF Federal employee may receive participant support allowances from grant funds in accordance with regulations. Local attendees may participate in conference meals and coffee breaks; however, grant funds may not be used to pay per diem or similar expenses for these participants. Participant support costs provided by sponsors other than NSF will follow the same requirements as specified in this policy unless an award specifies otherwise.

41. Budgeting for and Paying Participants Guidance: “Non-Duty vs. Research Participant Payments” http://www.research.fsu.edu/contractsgrants/documents/exhibit_non -duty_vs_rschpart.pdf. http://www.research.fsu.edu/contractsgrants/documents/exhibit_non -duty_vs_rschpart.pdf Proposal budget and F&A calculations. Proper payment methods

42. Questions