Table of Contents

Overview

100.1 – Introduction

The term sponsored research can be defined as University research that receives funding from an external source or a “sponsor.” While that is a very simple definition, sponsored research encompasses much more, including considerations that may affect the University financially and legally. Therefore, OSR is not the only office concerned with elements of sponsored research and projects; however, it is considered the central, definitive resource.

The University has a system for managing the many concerns that accompany sponsored research, including accounting, compliance, and reporting. OSR is concerned with financial administration and compliance of sponsored research projects and serves faculty and staff by communicating with sponsoring agencies on behalf of the University

The following overview describes Federal regulations, University guidelines and policies followed by OSR specific policies and procedures.

About the Policies

In serving faculty and administrators at the University, these policies assist in preparing and submitting proposals for sponsored project funding and managing sponsored funds awarded to the University.

Their threefold purpose is to:

  1. In an organized and coherent fashion, present and explain existing policies and procedures affecting sponsored research funding at the University.
  2. Describe services available to faculty and staff through OSR and other offices involved in sponsored project management.
  3. Serve as a reference and a source for further information and assistance.

Defining Sponsored Programs

The University abides by the criteria provided by the University of North Carolina Sponsored Programs and Research Council (SPARC) to identify “sponsored programs.” OSR is responsible for sponsored programs that encompass any scholarly, professional, or creative activity conducted by University personnel using support from external funding sources through grants, contracts, cooperative agreements, or other agreements. Such programs include but are not limited to organized research, instruction/training, other sponsored research activities, and research/support services.

Sponsored Programs versus Gifts

There are many distinctions between sponsored programs and gifts. Essentially, research contracts are signed research agreements, where a sponsor places contractual obligations on the research effort to gain something (referred to as a “deliverable”) in return for providing support.

Research grants and cooperative agreements differ slightly. Rather than a mutual agreement, research grants are awarded directly by the sponsoring agency to the University through an award. Research grants are governed by policies and guidelines, rather than contractual obligations. All three – research contracts, grants, and cooperative agreements require deliverables and are they are categorized together.

On the other hand, gifts are donations, given voluntarily without the imposition of restrictive contractual obligations by the donor. While gifts may include certain conditions (for example, a donation may go towards a specific type of research), when those conditions include deliverables, the transfer of intellectual property, or provision of data to the funder, it is no longer considered a “gift” but is classified as a “contract” or “grant”. OSR can help with questions about determining categorization of funding.

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100.2 – Policy Guide

Management of sponsored research is a combined effort of the University of North Carolina General Administration (UNC-GA), the University proper, the sponsors that provide their support to research efforts at the University, and the Principal Investigators (PIs) who spearhead the research itself. OSR considers the policies, regulations, and requirements issued by State, University, and Federal offices for every individual sponsored research project. This is also the case with non-Federal sponsors. While there are many research policies that govern the University, the State-regulated policies summarized below govern research administration at all UNC constituent institutions, including UNC-Chapel Hill.

UNC General Administration – Policies Related to Research Administration

UNC-GA policies are established by the UNC Board of Governors, the legal body appointed by the North Carolina General Assembly. The Board is responsible for governing the collection of constituent institutions that compose the UNC multi-campus system.

  1. UNC–GA Policy 500.1 University Research Relations with Government Agencies and Private Entities, discusses three areas of concern regarding university research:
    • Appropriateness in Research. Research collaborations must support teaching, research and public service while allowing faculty and students freedom to pursue and publish research and findings. Research must be conducted under conditions that ensure academic integrity.
    • Proprietary Information. University researchers have the basic right to disseminate their research findings, except in cases where agreements must be made to protect shared proprietary information. Any agreement involving joint use of University facilities for proprietary purposes, or one that restricts publishing research findings, must be reported to the President of the UNC-System.
    • Classified Research. In general, sponsored research must be conducted while maintaining openness in teaching and research. In exceptional cases (including those involving the United States government), where classifications impose limitations on dissemination of research findings, the Chancellor may waive the openness requirement in the greater interest of the University, State, or Nation.
  2. UNC-GA Policy 500.3 Authorizing the President to Execute Grant Applications and Assurances of Compliance gives the North Carolina Office of the President the authorization to determine appropriateness and execute documents of compliance on behalf of the Board of Governors.
  3. UNC-GA Policy 500.4[R] Regulations on Administering Sponsored Programs establishes general requirements and responsibilities of the University of North Carolina Office of the President and constituent institutions of the UNC system. This includes the establishment and role of SPARC and delegating policy-making authority to the Board of Governors. It also provides general criteria that must be followed in the development of sponsored programs, including the roles and responsibilities of the Office of the President, constituent institutions, and faculty and staff involved with sponsored research.
  4. SPARC Guidelines Defining Sponsored Programs ensures compliance with Federal and State laws, as well as UNC-GA regulations by providing both general and specific definitions of what is and what is not considered a sponsored program. In addition, the guideline presents clear procedures for submitting and processing externally sponsored program funds to maintain uniform administration throughout the constituent UNC institutions.

UNC-Chapel Hill – University-Wide Policies Related to Research Administration

In adherence to policies and regulations set by the Board of Governors and the State of North Carolina, the University has established policies and procedures tailored to the needs of faculty, staff and students at the University with regard to research. While there are many University research policies, the following form an essential foundation for conducting and administering sponsored research at the University.

  1. Responsible Conduct of Research
    Faculty, research personnel, postdoctoral research associates, and students are expected to follow the policies and procedures at the University that govern the conduct of research including the Research Ethics Resources.
  2. UNC-Chapel Hill Policy on Classified Research
    In adherence to UNC-Chapel Hill’s longstanding commitment to academic freedom and service, the University does not usually participate in sponsored research that restricts or prevents investigators from publishing the results of their investigations. However, in rare instances, exceptions can be made only with the prior approval of the Chancellor or his designee, where certain considerations apply.

Federal Regulations on Research Administration

The University is required to comply with Federal laws and regulations related to the administration of contracts, grants, and cooperative agreements when it receives Federal funding for sponsored research. These regulations are outlined below.

  1. Uniform Guidance
    The Office of Management and Budget (OMB) establishes the regulations governing the management of Federally funded grants and cooperative agreements. 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly known as Uniform Guidance) houses these regulations.
    • 2 CFR §200 Subpart D outlines uniform administrative requirements expected of recipient institutions covering topics such as property management, procurement, financial monitoring, and reporting, as well as other compliance issues.
    • 2 CFR §200 Subpart E establishes cost principles applicable to expenses on Federally sponsored projects. This includes the differentiation between direct and indirect costs, allowability, and examples of selected items.
    • 2 CFR §200 Subpart F identifies the auditing requirements for grant recipients as well as the responsibilities under the Single Audit Act Amendment of 1996.
  2. Federal Acquisition Regulations (FAR)
    The Federal Acquisition Regulations System (FAR) establishes uniform policies and procedures for acquisitions of supplies and services by all executive agencies. The FAR is the principal document codified in Title 48 CFR Chapter 1 of the Federal Acquisition Regulations System that governs Federal contracts just as Uniform Guidance governs Federal grants and cooperative agreements.
  3. Federal Demonstration Partnership
    UNC-Chapel Hill is a member of Federal Demonstration Partnership (FDP), a cooperative initiative among select Federal agencies and institutions that receive Federal funds. It is an effort to reduce the layers of administrative work associated with research grants and cooperative agreements.
  4. Federal Register
    Published by the Office of the Federal Register, National Archives and Records Administration (NARA), the Federal Register is the official daily publication for rules, proposed rules, and notices of Federal agencies and organizations, as well as executive orders and other presidential documents.

UNC-Chapel Hill Research Compliance Components

The University is committed to performing sponsored research in accordance with all relevant ethical, legal and regulatory obligations. As an indication of its commitment and high level of accountability, UNC-Chapel Hill has structured several compliance programs to maintain effective monitoring, auditing, training, education, and communication regarding compliance issues. In addition, the University Research Compliance Officer in the Research Compliance Program (RCP) oversees institutional research compliance issues. These proactive programs coordinate administrative and operational compliances by actively accessing and responding to compliance needs. Concerns related to any of the compliance components listed below can be reported anonymously through the University Compliance Line, via online submission, or by telephone (1.866.294.8688).

University programs responsible for various compliance proceedings are listed below.

  1. Protections for Human Subjects in Research
    The University’s Institutional Review Board and Office of Human Research Ethics (OHRE) manages the Human Subjects Protection Program, which provides assurance to the Federal government that the University upholds all ethical and regulatory requirements concerning research that involves human subjects. OHRE also supports and oversees the work of the Institutional Review Boards (IRBs).
  2. Humane Animal Care and Use
    Three University offices work together to oversee compliance issues pertaining to animal welfare, care, and use of animals used for research. They include:
    • Institutional Animal Care and Use Committee (IACUC) – Committee that assesses and approves animal use on campus. Responsible for adherence to Federal regulations related to humane care and use of animals.
    • Division of Comparative Medicine (DCM) –(formerly the Division of Laboratory Animal Medicine) Responsible for the care of all vertebrate animals on campus and for providing veterinary care, technical assistance, and laboratory and pathology services for diagnostic and research purposes.
  3. Scientific Integrity
    The entire University community is responsible for assuring that high standards of integrity and ethical behavior are practiced in all research endeavors. The University’s policy and procedures are outlined in the University Policy on Ethics in Research.
  4. Research Sponsorship
    OSR and the Office of Clinical Trials (OCT) coordinate with IRB and Conflict of Interest Committees, University Counsel, and Auditing, to account for compliance regulations mandated from Federal granting agencies such as the National Institutes of Health (NIH), National Science Foundation (NSF), and the Food and Drug Administration (FDA).
  5. Research Safety
    The Department of Environment, Health, and Safety (EHS) is responsible for adhering to regulations for laboratory, chemical, and healthcare environment safety.
  6. Conflict of Interest
    Both the (Office of University Counsel ) and campus Conflict of Interest Committees serve to ensure that research team members and their family members do not have conflicting financial interests with the research they undertake.
  7. Health Insurance Portability and Accountability Act
    The Institutional Privacy Office works to protect the research data that includes a person’s private Protected Health Information (PHI).
  8. Export Control
    The Federal government’s export control regulations may prohibit the unlicensed export of specific technologies for reasons of national security or protection of trade. Such exports may require the University to obtain a license from the Department of State or the Department of Commerce before allowing foreign nationals without US citizenship or permanent resident status to participate in research. OSR works with the community to relay important information on export control as it relates to sponsored research at the University.

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General Operating Standards

200.1 – Office of Sponsored Research Responsibilities

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The Office of Sponsored Research (OSR) at UNC-Chapel Hill is the designated University unit responsible for institutional oversight, administration and financial management of Federal and non-Federal contracts, grants and cooperative agreements. Therefore, any document and transaction related to the administration of these types of research-related instruments are reviewed by OSR on behalf of the University to confirm its accuracy and compliance with Federal, University and sponsor policies. In some instances, OSR may delegate certain tasks to the Sponsored Programs Office (SPO) or the Office of Clinical Trials (OCT), as appropriate. OSR provides numerous services, including, but not limited to:

  • Reviewing and approving the financial and administrative aspects of proposals, awards, agreements, contracts, and grants associated with research and training activities
  • Signing all instruments associated with research activities on behalf of the University
  • Negotiating and implementing award terms, conditions and amounts
  • Negotiating and implementing the University’s Indirect Cost (F&A) rate agreement
  • Overseeing financial compliance related to award terms and conditions
  • Training University staff in research administration regulations and procedures
  • Managing regulatory compliance
  • Administering financial reporting and information systems
  • Maintaining accounts receivable for sponsored research accounts
  • Serving as liaison with auditors on financial matters

Reason for Standard

The Office of Sponsored Research provides control of the administrative and financial aspects of sponsored research and maintains consistency with the University’s mission to acquire and disseminate knowledge. OSR is established in adherence with the UNC-General Administration policies governing sponsored research.

Exclusion and Exceptions

While OSR is concerned only with sponsored research administration, there are various aspects of research governed by other divisions at the University, and subject to University-wide conventions, such as purchasing and accounting methods.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.2 – Signature Authority

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Within the University of North Carolina System, delegations for University signatory authority are assigned by the chancellors of each constituent University and approved by the President.

The Vice Chancellor for Research (VCR) is the primary signatory authority designated by the Chancellor to enter into legal commitments involving sponsored projects on behalf of the University.  This includes, but is not limited to, grants, contracts, and cooperative agreements.  Throughout the University, there are several offices specifically granted official signature authority.  The Office of Sponsored Research (OSR) has been granted signature authority for all sponsored projects agreements.

Unless they are so named, Principal Investigators (PIs), Department Heads, Deans, and Directors do not have this institutional signature authority, and therefore, are not recognized as designated representatives of the University regarding the verbal or written acceptance of sponsored program agreements of any kind.

Reason for Standard

This operating standard establishes the OSR as the institutional authorized signatory to enter into legal commitments regarding sponsored research support on behalf of the University.

Exclusions and Exemptions

Based on the criteria presented in the University Grants Processing Policy and the University of North Carolina Policy Manual, commitments that do not involve external sponsors or an exchange of financial or equivalent considerations may not require signatory authority by the VCR or his/her designees. Consult the appropriate dean, director, or department head, and OSR with specific questions.

The Sponsored Program Office (SPO) is the signatory authority for sponsored agreement proposals from the School of Medicine (SOM). In this regard, OSR and SPO each have shared responsibilities in the proposal review process.

The Office of Clinical Trials (OCT) is responsible for executing clinical trial agreements and other research efforts associated with clinical research.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.3 – Principal Investigator Eligibility

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

On externally sponsored research projects fulltime, permanent EPA faculty may serve as Principal Investigators (PIs), in accordance with the University’s eligibility policy.  Each principal investigator and each member of the research team are responsible for assuring department heads, deans, and directors that their University commitments will be sustained during the duration of the research project.

PIs, department heads, deans, and directors do not have the authority to enter into legal agreements on behalf of the University.  All sponsored research agreements involving grants, contracts or cooperative agreements must be signed by a University representative with institutional signature authority.

MULTIPLE PRINCIPAL INVESTIGATORS

When two or more PIs are designated by the University for the responsibility of scientific, technical, scholarly or artistic direction of sponsored projects, these PIs share equal, full authority and responsibility for the intellectual, administrative and financial aspects of the proposal and award, consistent with applicable laws, regulations, terms, and conditions.

Appointing multiple PIs is appropriate only when the research project has the potential to maximize team science projects and multidisciplinary research. Instances of multiple PIs are often seen in such agencies as the National Institutes of Health (NIH).

Regardless of the number of PIs, each is required to complete certification in RAMSeS for any proposal where s/he is named as a PI.

LIMITED SUBMISSIONS

The University utilizes an internal selection process to identify and fairly judge among numerous investigators interested in submitting applications for sponsored projects that limit the number of proposals originating from the University. The Office of Research Development (ORD) is responsible for the identification, alerts to the research community, and the selection process regarding limited submissions.

Reason for Standard

Since sponsored research is at the core of the University’s mission, it is essential that highly qualified individuals are designated to serve in the role of principal investigator in a manner consistent with the Board of Governor’s policy regarding the appropriateness of University Research, and aligned with the University’s policy on ethics in research.

Exclusions and Exceptions

While the majority of PIs are full-time, permanent EHRA faculty members, some research projects are conducted by PIs with different employee designations:

  • POSTDOCTORAL FELLOWS Postdoctoral fellows cannot be designated as lead PIs in RAMSeS and are not recognized in that capacity by the University. Instead, postdocs are designated as other project team roles under the oversight of an eligible full-time, permanent EHRA faculty member, who is named as the PI in RAMSeS and assumes the role of “mentor” to the postdoc. Although this may contradict cases where agencies allow a postdoc to serve as a lead PI, the University’s designation prevails for administrative purposes.
  • NON-FACULTY EHRA EMPLOYEES, SHRA EMPLOYEES AND PART-TIME FACULTY In very exceptional circumstances non-faculty EPA employees and part-time faculty members may serve as lead PIs with written approval from their departmental chair, dean or director.
  • PIS TRANSFERRING TO UNC-CHAPEL HILL Department chairs, deans, or directors may submit proposals in RAMSeS on behalf of a PI transferring from a different institution to the University. The proposal must be submitted directly from the department chair, dean or director and requires attaching a memo or email in RAMSeS explaining the circumstances of the submission. Once the PI has transferred to the University, additional information about the PI may be added to RAMSeS.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.3 – Procedure 1 Preparing a Waiver Request for Principal Investigator Eligibility

Corresponding with:

Procedure Statement

For any employee who is not a full-time, permanent EPA employee, a request to waive the University’s PI eligibility operating standard must be submitted and approved by the Office of Sponsored Research (OSR).

Forms and Instructions

A request for a waiver should be signed by the Department Chair, Director or Dean. It should be prepared using a departmental letterhead and in the form of a letter. The request should be attached in RAMSeS with the IPF and include the following information:

  • A rationale for the individual’s service as a lead PI. If the applicant has no prior experience as a PI, provide the name of the faculty member responsible for mentoring the applicant in technical and project management duties as a PI and the method for doing so.
  • Confirmation in writing that the appropriate administrative and fiscal support staff and services are available to support the applicant in his/her role as a lead PI, throughout each stage of the project.
  • A model waiver request is presented in the sample below:

Subject: PI Eligibility Operating Standard Waiver Request

Please accept this formal request to waive the UNC-Chapel Hill PI eligibility operating standard to allow [Name of Proposed PI] to serve as the lead Principal Investigator for [Project Title and RAMSeS Internal Processing Form Number].

Justification for PI Service:

As the [Dean/Chair/Chief/Director], I will support [Name of Proposed PI] throughout the proposal, award, and closeout stages of the project, accepting responsibility for oversight of the project. I confirm that [Department/Center/Unit] has the appropriate administrative and fiscal support staff and services available to support [Name of Proposed PI] as Lead Principal Investigator.

Sincerely

[Signature]

[Name of Dean/Chair/Chief/Director]

[Title of Dean/Chair/Chief/Director]

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.4 – Principal Investigator Responsibilities

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Principal Investigators (PIs) are responsible for the overall proposal preparation, administration, technical and financial management of sponsored projects. These obligations include, but are not limited to, the management of the project within funding limitations, adherence to reporting requirements and ensuring that the sponsor is notified regarding significant conditions that may affect the technical or scientific aspects of the sponsored project.

PIs do not have the authority to enter into legal agreements involving grants, contracts, and cooperative agreements on behalf of the University.  These must be signed by a University representative with institutional signature authority.

While the PI may delegate day-to-day operations of project finances and administration to staff members, the PI accepts ultimate accountability for compliance with Federal, University and sponsor policies and requirements.  This also includes knowledge of sponsor regulations regarding any stipulations on rebudgeting and changes in key personnel, scope of work, and subrecipient requests.

PIs are required to review the University’s policies on ethics in research and stewardship of sponsored funds, as well as compliance regulations applicable to their sponsored projects.

PI/PD RESPONSIBILITIES:

  1. Preparation of Proposals
  2. Prohibitions on Award Acceptance
  3. Management of Project Expenditures
  4. Technical Reporting Requirements and Additional Requests Related to Sponsor Notifications and Prior Approvals
  5. Change in PI Status
  6. Project Closeout
  7. Auditing

I. PREPARATION OF PROPOSALS

PIs are responsible for creating proposals based on the sponsor’s guidelines as well as the University requirements.  This includes using the sponsor’s formatting, including all required components and providing the completed proposal for central office review in a timely manner.

This also means submitting all proposals through RAMSeS and including all compliance requirements and any other University required certifications.  The PI may delegate certain aspects of the proposal to department administrators, such as the budget creation, but they are ultimately responsible for all aspects of the proposal.

All proposed budgets must conform to the sponsor, University, and Federal requirements.  In proposing budgets for sponsored projects, the PI assures the University and the potential sponsor that project finances are represented as accurately as possible.  PIs are required to inform potential sponsors that no budget is considered final until authorized by the Office of Sponsored Research (OSR) on behalf of the University.

II. PROHIBITIONS ON AWARD ACCEPTANCE

PIs are prohibited from accepting or indicating acceptance of a sponsored award verbally or in writing.  Only official designees of the University have the authority to accept an offer of award.

III. MANAGEMENT OF PROJECT EXPENDITURES

Upon finalization of award acceptance and creation of a Project ID for awarded funds, the PI is responsible for authorizing direct charges in accordance with 2 CFR §200.413 and applicable funding agency guidelines.  All project expenditures should be reviewed on a monthly basis.  The PI’s authorization assures that all expenses charged to the project are allowable, allocable to the project, and reasonable.

IV. REPORTING REQUIREMENTS, ADDITIONAL REQUESTS RELATED TO SPONSOR NOTIFICATIONS & PRIOR APPROVALS

The PI is responsible for providing all technical and scientific reports on the date indicated in the agreement, using the agreed upon format.  Please note that certain sponsors require the technical or scientific report to be submitted with the financial report.  In this case, please send the completed technical or scientific report to OSR for submission.

In all cases, required notifications or requests for prior approval should be made in writing to both the administrative and technical officials in the sponsoring agency. All notifications must be coordinated and sent by OSR.

V. CHANGES IN PI STATUS

Sponsors often have requirements regarding notification or prior approval of changes in the availability of the PI.  For Federal contracts and Non-Federal projects, the terms and conditions of the particular agreement will govern.

For Federal grants, 2 CFR §200.308 requires prior written approval from the awarding agency for either of the following circumstances involving key personnel:

  • A reduction in time devoted to the project of 25% or more from the proposed and awarded level
  • Disengagement from the project for more than three months

The grant award and grant policies of the specific sponsoring agency should be reviewed for any additional requirements.

The PI, department chair, or department administrator should contact OSR to coordinate securing required approvals for all PI Status Change requests. If in the original award, the University had committed to fund some of the PI’s effort as cost sharing and the PI reduces the overall committed level on the project, OSR will also negotiate reductions in levels of the cost-shared component of effort, as appropriate.

When a PI’s appointment will terminate before the agreement end date or is scheduled for a leave of absence, it is mandatory that the sponsoring agency concurs in writing before the PI departs. Satisfactory arrangements are to be made for a substitute PI and continuation of the specified research or training. Any leaves of absence are coordinated through the appropriate OSR Sponsored Project Specialist (SPS).

VI. PROJECT CLOSEOUT

PIs are responsible for overseeing the proper closeout of sponsored projects, including the timely submission of all required reports in conjunction with OSR.  They are also required to remove any charges deemed unallowable by OSR promptly.

VII. AUDIT INFORMATION

Any auditing activity is required to be conducted in the presence of an OSR representative.  Communications and correspondence with auditors are conducted by OSR and OSR must review any materials requested by auditors before submission.

PIs are responsible for ensuring that budgets and expenditure accounts are managed in accordance with the regulations provided in 2 CFR § 200 Subpart F.  In addition to other auditing requests, this includes providing  OSR information and records requested by the auditing agency regarding:

  • Compliance and internal controls
  • Review of financial transactions, payroll, effort reporting
  • Monitoring research dollars and how costs have been allocated to sponsored projects

Reason for Standard

This operating standard establishes the overall responsibility of Principal Investigators in undertaking sponsored research projects and related components of those projects.

Exclusions and Exemptions

The definition of a leave of absence varies from sponsor to sponsor. Other sponsors may be more or less restrictive and may reserve the right to approve any change in key project personnel. Adherence to sponsor requirements for advance notification and clearance minimizes the chance of problems with and possible cost disallowances by a sponsor.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures, and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.5 – Departmental Administrator Responsibilities

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Department Administrators (DAs) are responsible for assisting Principal Investigators (PIs) with the daily administrative tasks of sponsored projects’ financial and reporting management in conjunction with the Office of Sponsored Research (OSR).

While the PI may delegate day-to-day operations of project finances and administration to staff members, the PI accepts ultimate responsibility and accountability for compliance with the University’s policies and sponsor requirements.

Just as PIs are required to review their obligations to the University’s policies regarding integrity in research and stewardship of sponsored funds, DAs are governed by the same policies and expectations.

DA RESPONSIBILITIES:

    1. Proposal Preparation
    2. Prohibition of Award Acceptance
    3. Daily Management of Project Expenditures
    4. Preparation and Submission to OSR of Proper Forms for All Revisions
    5. Assistance with Reporting Requirements
    6. Project Closeout in Conjunction with OSR

I. PROPOSAL PREPARATION

The DA is responsible for assisting the PI in preparing proposal submissions for sponsored projects in compliance with the sponsor guidelines and University policies.  This includes the correct formatting, confirming all sponsor required documentation is included, that all OSR required documentation is included, that all documentation is uploaded in the sponsor required application system as well as in RAMSeS and that all documentation is submitted to OSR or Sponsored Programs Office (SPO) in a timely manner to allow for the appropriate reviews.

This also includes creating a proposed budget based on sponsor guidelines, University requirements, and 2 CFR§200 Subpart E – Cost Principles.  All budgets are subject to revision by OSR and acceptance by the sponsor.

II. PROHIBITION OF AWARD ACCEPTANCE

DAs and PIs are prohibited from accepting, negotiating or indicating acceptance of a sponsored award on behalf of the University, verbally or in writing.  Only official designees in the presiding office —OSR, SPO, or the Office of Clinical Trials (OCT) — have the authority to accept an offer of award from a sponsoring agency.

However, DAs are responsible for reviewing the Pending Award information in RAMSeS to confirm the accuracy of information before an award is setup by OSR.

III. DAILY MANAGEMENT OF PROJECT EXPENDITURES

DAs are responsible for setting up the internal mechanisms to monitor and maintain accurate financial records of sponsored funds. This includes assuring that the PI reviews and authorizes direct charges in accordance with 2 CFR §200 Subpart E – Cost Principles and applicable funding agency guidelines. DAs should review and reconcile project expenditures on a monthly basis to verify the expenses charged to the project are allowable for the project.

IV. PREPARATION AND SUBMISSION TO OSR OF PROPER FORMS FOR ALL REVISIONS

DAs ensure that changes in project status, such as financial revisions or requests, personnel effort, and any other requests are properly reported to the sponsoring agency through the proper OSR channels using the correct forms.

V. ASSISTANCE WITH REPORTING REQUIREMENTS

DAs also assistant the PI in ensuring all technician and scientific reports are submitted to the sponsor by the due date, using the appropriate forms and submission systems.  They also alert OSR if the technical and scientific report needs to be submitted in conjuncture with a financial report.

VI. PROJECT CLOSEOUT WITH OSR

DAs assist the PI in preparation and timely submission of final technical reports.  They also work in conjunction with OSR on the final financial report to ensure all charges are accurate and allowable.  This includes removing any expenses deemed unallowable by OSR promptly.

Reason for Standard

This operating standard establishes the overall responsibility of Departmental Administrators in monitoring sponsored research projects and related components of those projects.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.6 – Responsibilities of Deans, Directors, and Department Heads

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Principal Investigators (PIs) and lead administrators (deans, directors, and department chairs, etc.) share responsibility for the financial and administrative oversight of all sponsored projects.  This includes adhering to Federal, University regulations, sponsor regulations, and guidelines for both the proposal and the agreement.

UNIVERSITY PROPOSAL REQUIREMENTS:

  • Lead administrators of the PIs unit are responsible for reviewing the application for appropriateness of the research, certifying the department, center or institute commitment of resources to the project, and ensuring the PI is qualified to perform the project. When research involves co-PIs from more than one department or unit, one department is selected to administer the award.
  • If the research involves personnel, space, equipment or other resources from outside the lead department, the lead administrators for each department must certify the application and agree to commit the requested resources.
  • Deans, department heads, directors and other lead administrators do not have the authority to enter into legal agreements involving grants, contracts and cooperative agreements, on behalf of the University. These must be signed by a University representative who has been designated as an institutional signature authority.

UNIVERSITY SPONSORED PROJECTS REQUIREMENTS:

  • Review and approve any Preaward spending or cost-sharing This constitutes the department, center, or institute commitment to paying for the project from non-sponsored funding sources if the award is not granted.
  • Monitor sponsored project activities for compliance with 2 CFR §200 – Uniform Guidance and University policies

Reason for Standard

This operating standard recognizes the roles of lead administrators at the onset of proposed sponsored research and balances the responsibilities of the Principal Investigator, deans, directors, and department heads.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.7 – RAMSeS (Research Administration Management System & eSubmission)

Responsible Officer: Executive Director
Responsible Unit: Office of Sponsored Research
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Research Administration Management System and eSubmission (RAMSeS) is the University’s official proposal and award management system.  All research proposals requesting funding for a grant, contract or cooperative agreement must be recorded in RAMSeS.  This is accomplished by preparing an Internal Processing Form (IPF) which is mandatory for each application, regardless of the funding source.  Access to RAMSeS requires the user’s University ONYEN.

Reason for Standard

RAMSeS is used to create and manage the official University record for each sponsored project in a consistent, efficient manner.  Each record contains both financial and compliance information necessary for proposal submission as well as award management once an award is funded.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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200.7 -Procedure.1 Obtaining Administrative Roles in RAMSeS

Corresponding with:

Procedure Statement

To manage administrative approval rights and data access concerning research activities maintained in RAMSeS, the Office of Information Systems (ORIS) created a portal named “Backbone.” Each University department, center, and institute has one or more designated Role Manager(s) responsible for creating, assigning, and managing administrative roles for their unit. More specifically, the Role Manager assigns the appropriate designations to departmental personnel based on their roles in research and tracks departmental personnel changes as they occur. Once an employee has been authorized as a unit Role Manager, s/he is responsible for additional administrative assignments within Proposal Dashboard and Award Dashboard in RAMSeS, such as:

  • IPF Approver
  • Financial Guarantee Approver
  • Proposal Data Access
  • Award Data Access
  • Research Account Manager

Forms and Instructions

To request access, contact your department’s Role Manager, who will have you complete and sign the appropriate forms. These forms will then be sent to ORIS, who will update your access within RAMSeS.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Proposal Development and Submission

300.1 – Shared Responsibilities for Proposal Review and Institutional Approval

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The responsibility for final review and institutional signature for research proposals and/or clinical trial proposals is divided among the Office of Sponsored Research (OSR), the Sponsored Programs Office (SPO), and the Office of Clinical Trials (OCT), including divisions of responsibility regarding negotiations of terms and conditions prior to the acceptance of an award.

Once an electronic Internal Processing Form (IPF) has been submitted and approved at the department level, the proposal is received for final review and approval by OSR, SPO, or OCT.  The three units divide this responsibility as follows:

I. OFFICE OF SPONSORED RESEARCH

  • Non-School of Medicine Units
    • All Sponsored Projects
      • Federal Sponsors
      • State agencies
      • Industry sponsors
      • Non-clinical, industry-sponsored research agreements
  • School of Medicine
    • NIH Contracts, SBIR/STTR
    • Federal agencies other than NIH
    • Foundations:
      • Kate B. Reynolds
      • Smith Reynolds
      • The Duke Endowment
      • Robert Wood Johnson
      • Kaufman Foundation
      • Andrew W. Mellon

II. SPONSORED PROGRAMS OFFICE

  • NIH Grants and Cooperative Agreements
  • Foundations, excluding those listed under OSR
  • Nonprofit organizations

III. OFFICE OF CLINICAL TRIALS

  • Contracts with private industry sponsors or other entities performing clinical trials

Reason for Standard

Designating specific responsibilities regarding proposal review and approval prevents duplication of effort and helps maintain the flow of information for the entire proposal system.

Exclusions and Exceptions

The Corporate and Foundation Relations division of the University Development Office oversees partnerships with private corporations and foundations that offer support to the University in the form of gifts.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.2 – Master Agreements and Task Orders

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

When the potential/probability exists for collaboration with a sponsor on several research projects, the University and the sponsor may elect to enter into a master agreement.  Such agreements are established to define the terms and conditions applicable to any subsequent research project (known as a task order) conducted with that particular sponsor.  Master agreements supersede task orders unless modified by authorized written amendments between the sponsor and the University.

Task orders, each with their own terms and conditions following those of the master agreement, are viewed as separate projects.  Each requires preparation of an IPF in RAMSeS, and each receives a separate Project ID.

Initial task orders and those under master agreements with the State of North Carolina are negotiated and approved on behalf of the University by the Office of Sponsored Research (OSR).

Reason for Standard

Maintaining master agreements with sponsors streamlines the review and approval of several projects under one agreement.  This operating standard establishes the master agreement as the prime agreement between the University and the sponsor who provides funding for task orders under that agreement.

Exclusions and Exceptions

In general, master agreements may be modified only by written amendments between the sponsor and the University, executed by an authorized representative of each.

Procedures and Related Operating Standard

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.3 – Deadlines for Proposal Submission to University Offices

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Applications for sponsored funds are prepared according to the guidelines presented by the sponsor. These typically describe the formatting and content specifications expected for proposals and establishes deadlines for when proposals must be submitted.

All applications for sponsored funding must be reviewed and approved through proper University channels before submission to the sponsor.  The Office of Sponsored Research (OSR), the Sponsored Programs Office (SPO) and the Office of Clinical Trials (OCT) have an internal deadline for receiving completed proposals before the sponsor’s submission deadline.

The Internal Processing Form (IPF) and completed proposal package must be received for central office approval at least five (5) business days before the funding agency’s deadline.  Proposals received after the internal deadline cannot be guaranteed adequate review and may not receive institutional signature before the sponsor deadline.

Reason for Standard

This operating standard establishes the internal deadline for providing OSR, SPO, and OCT with completed proposals and any other required materials required for submission to the sponsor.

Exclusions and Exceptions

Early submission of a proposal does not guarantee any reduction in the five (5) working days required for final review and approval.  OSR should be contacted with any questions regarding IPFs.  SPO is the administrative unit for School of Medicine proposals.  OCT is responsible for executing clinical trial agreements and other research efforts associated with clinical research.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.3 Procedure 1 – Using RAMSeS for Proposal Submission

Corresponding with:

Procedure Statement

The Research Administration Management System and eSubmission (RAMSeS) is the repository for all sponsored research financial information including both proposal and award data.

The Proposal Dashboard within RAMSeS creates the University’s official record for each sponsored research project. The RAMSeS Internal Processing Form (IPF) is required for each research proposal of a grant, contract or cooperative agreement and it is used to collect financial and compliance information and documentation needed for internal review and approval.

An IPF is prepared when a PI plans to compete for or receive any funding from an agency. For example, it is necessary to prepare an IPF for the following:

  • A new proposal requesting new dollars not associated with an existing award
  • A proposal supplement requesting additional dollars to an existing award
  • A continuation proposal, both competing and non-competing
  • An incoming subcontract, where funds are directed to the University from the prime recipient of an award
  • The prime contract directly awarded from a Federal, industry, foundation, non-profit or State agency

Once completed, the IPF is submitted and electronically routed to the appropriate University officials for review and approval. Lastly, it must be electronically certified by the Principal Investigator (PI), before a proposal is submitted for funding.

Most agencies require electronic submission of proposals. These types of submissions are agency-specific operations separate from RAMSeS. Completion of both the sponsor-specific submission and the IPF are required for all relevant applications.

Forms and Instructions

I. PREPARING AND SUBMITTING AN IPF

  1. Read all proposal guidelines provided by the sponsor and any relevant University policies
  2. Contact OSR with any questions regarding the preparation of an IPF
  3. Access the RAMSeS IPF using your ONYEN.
  4. Select “Start New Proposal” to begin filling in the general proposal information. RAMSeS will then generate a proposal number and creates the new IPF.
  5. Complete the IPF including the following applicable information:
    • General proposal information
    • Research team information
    • A completed budget plan and budget justification
    • Completed regulatory requirements
    • Key proposal data and compliance information
    • Subrecipient information
      • Statement of Work
      • Budget and Budget Justification
      • Letter of Intent
      • Any other sponsor-specific requirements for subrecipients
    • Completed proposal package using the method and guidelines required by the sponsor
    • Any other sponsored requirements
  6. Click the “Submit Proposal” button in the IPF to start the routing process for the proposal.

II. APPROVING AND ROUTING AN IPF

  1. Any Departmental IPF Approvers are responsible for reviewing and approving the routing IPF prior to receipt at the designated central office.
  2. An approver for the appropriate Dean, Director, or Chair then approves to confirm the following:
    • The PI is appropriately qualified to complete the project
    • The PI has available time to commit to the project
    • The proposed project is an appropriate activity for the administering department
    • The space and resources available are sufficient to complete the project
    • Agree to provide the resources identified in the application
  3. Any collaborating departments are then required to review as “Approving Departments.” They are to confirm:
    • Accurate salary figures and effort commitments
    • Availability and use of space, equipment, or other resources requested
  4. The IPF is then routed to the appropriate central office for final review and institutional approval.

III. PI CERTIFICATION OF AN IPF

The PI is required to review and certify the proposal before it can be approved and submitted to the sponsor.

The PI identified in the IPF receives an email notification to certify their RAMSeS PI Certification Inbox. They are required to certify the following:

  • The information included in the application is complete and accurate
  • They accept responsibility for the scientific, financial, and ethical conduct of the project if funded
  • They will comply with all relevant State and Federal regulations, University policies, and any other terms and conditions
  • They have reviewed all pre-submission compliance requirements

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.4 – Pre-Submission Compliance Requirements

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The University and any persons conducting research on behalf of the institution are required by law to comply with established Federal standards regarding sponsored research.  In conjunction, the University is responsible for maintaining compliance through training and education, communication between and among researchers, monitoring, and auditing systems to detect compliance issues, and preventing non-compliance by proactively accessing and responding to compliance concerns.

The University institutes its compliance policies through the combined efforts of University Administration, the Principal Investigator (PI), the Office of Sponsored Research (OSR), the Sponsored Programs Office (SPO), and the Office of Clinical Trials (OCT) and those University offices responsible for maintaining compliance.

Before the approval of a sponsored research proposal, OSR, SPO, and OCT review the proposal to verify compliance information is accurate and complete in the following areas:

  • Human Subjects Protection – Submission of IRB approval, waiver, or exclusion, excluding those pending JIT approval.
  • Animal Care and Use – Submission of IACUC approval, waiver, or exclusion, excluding those pending JIT approval.
  • Research Safety – Identification of research materials requiring DEHS approval.
  • Export Control
    • Notification of intentions to transport materials outside the US
    • Identification of research team members who have foreign national status
    • Identification of select agents for potential licensure or export control management
  • Conflict of Interest – Identification by each team member of potential financial interests requiring management by the University
  • Intellectual Property – Identification of potential patent agreement requirements

Reason for Standard

In accordance with all relevant ethical, legal, and regulatory obligations, the University has established this operating standard demonstrating the University’s commitment to have all required compliance-related elements in place before expending funds.

Exclusions and Exceptions

Early submission of a proposal does not guarantee any reduction in the five (5) working days required for final review and approval.  OSR should be contacted with any questions regarding IPFs.  SPO is the administrative unit for School of Medicine proposals.  OCT is responsible for executing clinical trial agreements and other research efforts associated with clinical research.

Procedures and Related Operating Standards

Procedures, requirements, forms, and questions regarding compliance are addressed at the individual websites responsible for each:

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.5 – Proposal Budget Requirements

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The University is mandated to comply with Federal regulations presented in 2 CFR §200 Subpart E – Cost Principles when determining what costs are allowed for inclusion in sponsored research funding.  This includes proposal preparation and submission as well as post-award management.  It is essential that initial proposals represent realistic budgetary data and justifications for immediate and future years of a project.  Also, project costs must comply with the terms and conditions of the proposal/award, the sponsoring agency policies, and University policies to be considered allowable.  When planning budgets, the projected costs for any proposal (whether it involves Federal or non-Federal funds) must comply with standards of allowability.

Allowable costs identified directly and solely with a particular sponsored project are classified as Direct Costs.  Allowable costs used for common or joint objectives (i.e., shared with other operations) or those that cannot be readily identified as a particular sponsored project cost are classified as Indirect (F&A) Costs.

A cost is considered unallowable if any one of these conditions apply:

  • It is not applied consistently, allocable, or reasonable under the prescribed conditions in 2 CFR 200 Subpart E.
  • It is specifically designated as an unallowable cost as defined in the proposal guidelines and award terms and conditions.

Direct and F&A costs are allowable if they are determined to be allocable — meaning they can be assigned to a particular cost objective as a direct cost or an F&A cost, according to applicable guidelines. The Principal Investigator (PI) is responsible for preparing proposed budgets that meet University and sponsor cost principles and ensuring projected costs meet these criteria throughout an awarded project.  To assist with budget preparation, the PI may refer to the operating standards contained in Section 300.Proposal budgets should include all direct costs, F&A costs, and cost sharing contributions.  Written justification is also required to explain each line item and its correlation to the project.  If the budget includes cost sharing or cash matching, the administrative office responsible for funding the contribution must include this information as well.

Reason for Standard

This operating standard mandates the University’s compliance with the Federal requirements defined in 2 CFR §200 Subpart E.  It emphasizes the University’s use of consistent financial accounting and compliance measures from the beginning to the closing of each research project.

These preventative measures minimize non-compliance issues and audit disallowances that may impede or detrimentally affect the University research community.

Exclusions and Exceptions

In conjunction with an initiative by the National Institutes of Health (NIH) regarding modular applications, OSR and SPO provide standardized modular budget templates to streamline review of NIH modular application and proposal budgets.

Any foreseeable program income (such as fees for laboratory services, the sale of tissue cultures, third-party patient reimbursement, etc.) should be included in budget estimations during the proposal stage. For Public Health Service (PHS) applications, estimation of program income is required at the proposal stage.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.6 – Direct Costs

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Researchers at the University are required by Federal regulation to identify direct costs according to the definitive criteria in 2 CFR §200.413.

Allowable costs identified directly and solely with a particular sponsored project are classified as Direct Costs.  Direct costs include both personnel and non-personnel cost elements that may include, but are not necessarily limited to:

I. PERSONNEL COSTS

  • Salaries
  • Fringe Benefits

II. NON-PERSONNEL COSTS

  • Capitalized Equipment
  • Travel
  • Subrecipients
  • Consultants
  • Tuition
  • Other Direct Costs

Exclusions and Exceptions

Non-Federal funding agencies may allow costs that the 2 CFR §200.413 does not.  When this is the case, such costs may be included but must be explained in the proposed budget justification.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.7 – Direct Costs: Personnel

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

When estimating a sponsored research budget, the following direct cost elements regarding personnel must be calculated and included, as follows:

I. SALARY

Proposed salary for research projects is based upon the Institutional Base Salary (IBS), including all allowable administrative supplements of each proposed individual as shown in ConnectCarolina, taking into consideration any projected legislative salary and merit increases that may occur before the start date of the project.  Such salary escalations should take into consideration inflation for the duration of the project and add the calculated amount to all future year budgets, following any limits presented by the sponsor.

Some agencies impose a salary cap.  For personnel yet to be determined, projections are based upon the IBS for the proposed position.

Unless otherwise directed by the sponsor, proposed salaries are based upon the total percentage of effort that the University employee will spend working on the project.  This effort is reported according to guidelines set by the sponsoring agency and is subject to audit.

The percentage of effort indicated and the salary support requested for the sponsored project must be reasonable and consistent without jeopardizing an employee’s other commitments to the University regarding fulfilling their administrative, teaching or clinical responsibilities.

With the exception of employees hired solely to conduct research (their total percentage of effort would equal 100% on a sponsored project or projects), it is advisable for the PI and other members of the research team to limit their total combined effort so it does not exceed 90% on one or more sponsored projects.  Federal auditors will question University employees’ high percentages of effort on sponsored projects that do not take into account an employee’s administrative, teaching and clinical commitments as part of their total effort.  Once funds are awarded and accepted, the proposed percentage of effort becomes legally binding. Therefore it must be carefully and judiciously considered before commitment in the budget.

When proposing salary amounts, always include the applicable percentage of effort for every individual contributing effort to the project, regardless of the salary source.  Otherwise, the sponsor may presume the absence of a proposed salary amount constitutes cost sharing. The department is required to absorb such costs.

Likewise, when sponsors place a ceiling on annual salary rates that are chargeable against an award, the department is required to absorb any unreimbursed amounts and record the expense as cost sharing.

II. FRINGE BENEFITS

Fringe benefits are calculated separately from salary estimates using specifically defined Fringe Benefit Rates.  Depending on the position being proposed, fringe benefits may include:

  • Social Security
  • Workers Compensation
  • Severance
  • Retirement
  • Disability
  • Unemployment

The second area, health insurance, is a calculation based on health insurance rates factored according to employee classification.

Reason for Standard

In assisting the University’s departmental research administrators, this operating standard provides guidelines for budget planning of direct personnel costs in accordance with Federal regulations.

Exclusions and Exceptions

  • Compensation received by any person through the University’s payroll is considered salary. Therefore, employees of the University are ineligible to serve as paid consultants or independent contractors on University research projects.
  • Escalation rates may be limited by a sponsor and are usually presented in the proposal guidelines. The appropriate OSR Sponsored Project Specialist can also provide generally accepted sponsor rates.
  • Fringe benefits and health insurance rates differ for those clinical faculty members licensed to practice medicine in North Carolina and those providing clinical effort equal to or greater than 50% in a full-time. These employees are eligible for the UNC Physicians & Associates (P&A) Supplemental Fringe Benefits in addition to the baseline fringe benefit and health insurance rates.
  • Salary for part-time employees cannot be calculated as if they were full-time
  • Calculations for postdoctoral scholars must be based on the compensation guidelines presented by the Office of Postdoctoral Affairs.
  • Graduate research and teaching assistants are limited as to the maximum number of work hours they are allowed per week. Calculating a full-time graduate research/teaching assistant should be based and shown as 100% level of effort, a 12-month commitment or 1,280 hours per year.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.7 Procedure 1 – Estimating Salary

Corresponding with:

Procedure Statement

Salary calculations can be based on a percentage of effort (Percent Effort Model) or the number of months of effort (Person-Months Model) dedicated to the sponsored project.  Guidelines for both are listed below.

Summer salary, normally considered three (3) months, is added compensation to 9-month employees, therefore, it is calculated separately.  Some sponsors limit the effort allowed for summer salaries. Thus it is very important to read the sponsor guidelines carefully.

Calculations for salary do not include fringe benefits.  They are calculated separately and should be identified in the proposed budget as a separate line item.

Forms and Instructions

I. ANNUAL SALARY ESTIMATIONS Percent Effort Model

  1. Determine an employee’s FTE (Full-Time Equivalency) on a project:
  2. Multiply the number of months of effort divided by the length of the employee appointment.
  3. Two months of effort for an employee with a 9-month appointment equates to 2 ÷ 9 = .222
  4. The result (in this case, .222) is the FTE.
  5. Multiply the FTE times 100 to determine the percentage of effort .222 x 100 = 22.2%
  6. Multiply this percentage of effort times the employees Institutional Base Salary. if this is $60,000 per year:  2% x $60,000.00 = $13,320.00
  7. The resulting amount (here, $13,320.00) is the proposed annual salary for the estimated time spent on the project.

Person Months Model

  1. Determine the number of months of effort by multiplying the percentage of effort times the length of the employee appointment.
  2. 25% effort for an employee with a 12-month appointment would equate to .25 x 12 = 3
  3. The result (in this case, 3) is the number of months of effort
  4. The equation is Institutional Base Salary ÷ length of appointment x months of effort = estimated salary
  5. Divide the Institutional Base Salary by the length of the individual’s appointment: $70,000 ÷ 12 = $5,833.33
  6. Then multiply that amount times the months of effort (here, 3): $5,833.33 x 3 = $17,499.00
  7. The resulting amount (in this example, $17,499.00) is the proposed annual salary for the estimated time spent on the project.

II. SUMMER SALARY ESTIMATIONS Percent Effort Model Refer to Annual Salary Estimations Person Month Model

  1. Divide the Institutional Base Salary (here, $75,500) by the length of appointment (in most cases, 9) to determine the monthly salary: $75,500 ÷ 9 = $8,388.88
  2. The result is one month of salary, which would be applicable for each summer month of effort.
  3. Next, multiply the number of summer months of effort times the one month of summer salary: 2 x $8,388.88 = $16,777.76 (the total proposed summer salary)
  4. The resulting amount (here, $16,777.76) is the proposed salary for the estimated time spent on the project.

III. PROJECTING ANNUAL SALARY INCREASES

Once the proposed annual salary amount is calculated, apply the allowable annual salary increase rate (generally set by the sponsor) to reflect inflationary and legislative increases in future years (commonly known as the Escalated Institutional Base Salary). For example, if the annual projected salary of the project has been estimated at $13,320 for the first year and a 3% increase is anticipated each year, the salary calculations for a 5-year project would be calculated as follows:

Year 1:  $13,320
Year 2:  $13,320 x 1.03 =$13,719
Year 3:  $13, 719 x 1.03 =$14,131
Year 4:  $14,131 x 1.03 =$14,555
Year 5:  $14,555 x 1.03 =$14,992

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.7 Procedure 2 – Working with Salary Caps

Corresponding with:

Procedure Statement

Salary caps, generally see with Public Health Service funding, limit the amount of funding the agency will provide for an individual’s salary.  The current NIH salary cap amount is reviewed annually. When an individual’s projected salary exceeds an agency-mandated salary cap, the administrating University department is responsible for funding the difference.  Confirmation from an authorized department administrator on the RAMSeS IPF indicates the department’s commitment to provide such funds as part of its cost-sharing effort.

Estimating a person’s salary can be accomplished in several ways, including calculations that may not appear in this procedure.  There are minor differences between the results of 12- and 9-month appointments, but the basic formulas are the same.  Salary calculations can be based on a percentage of effort (Percent Effort Model) or the number of months of effort (Person-Months Model) dedicated to the sponsored project.  Guidelines for both are listed below.

Summer salary, normally considered three (3) months, is added compensation to 9-month employees, so it is calculated separately.  Some sponsors limit the effort allowed for summer salaries. Thus it is very important to read the sponsor guidelines carefully.

Calculations for salary do not include fringe benefits.  They are calculated separately, based on the salary cap, and should be identified in the proposed budget as a separate line item.

Forms and Instructions

I. ANNUAL SALARY ESTIMATIONS

Percent Effort Model

  1. Determine an employee’s FTE (Full-Time Equivalency) on a project
  2. Multiply the number of months of effort divided by the length of the employee appointment: 2 ÷ 9 = .22
  3. Multiply the FTE times 100 to determine the percentage of effort: .22 x 100 = 22 %
  4. Multiply this percentage of effort (22.2% here) times the employees Institutional Base Salary (IBS) minus the salary cap amount: .22 x ($250,000.00-$191,300.00) = .22 x $58,700.00 = $12,914.00
  5. The department would be responsible for $12,914.00 of the employee’s salary.
  6. As for the sponsoring agency, multiply the percentage of effort times the salary cap amount to calculate the amount funded by the sponsoring agency: .22 x $191,300.00 = $42,086.00
  7. The resulting amount (here, $42,086.00) is the amount the funding agency will provide for the individual’s proposed annual salary for the estimated time spent on the project.
  8. In total: $12,914.00 (department cost-share) + $42,086.00 (Sponsor Paid) = $54,000.00

Person Months Model

  1. Determine the number of months of effort by multiplying the percentage of effort times the length of the employee appointment: .25 x 12 = 3
  2. The entire equation is: (Salary Cap Amount ÷ length of appointment) x percentage of effort = estimated salary provided by the sponsor
  3. Divide the amount of the salary cap by the length of the individual’s appointment: $191,300.00 ÷ 12 = $15,941.66 (rounding is allowed)
  4. Then multiply that amount times the number of months of effort: $16,000.00 x 3 = $48,000.00
  5. As for the department’s shared cost, subtract the Salary Cap amount from the IBS: $250,000.00 (IBS) – $191,300.00 (Salary Cap) = $58,700.00
  6. Divide the difference ($58,700.00) by the length of the individual’s appointment: $58,700.00 ÷ 12 = $4,833
  7. Multiply the number of months of effort times the result to calculate the amount funded by the department: 3 x $4,800.00 = $14,400.00
  8. In total: $14,400.00 (department cost-share) + $48,000.00 (Sponsor Paid) = $62,400.00

II. SUMMER SALARY ESTIMATIONS

Percent Effort Model

  1. Determine an employee’s FTE (Full-Time Equivalency) on a project
  2. Multiply the number of summer months of effort divided by the length of the employee appointment: 2 ÷ 9 = .22
  3. Multiply the FTE times 100 to determine the percentage of effort: .22 x 100 = 22%
  4. Calculate the department’s cost-sharing amount by multiplying this percentage of effort (22.2% here) times the employee’s Institutional Base Salary minus the salary cap amount: .22 x ($200,000.00 – $180,000.00) = .22 x $20,000 = $4,440.00
  5. Multiply the percentage of effort times the salary cap amount to calculate the amount funded by the sponsoring agency. Include this amount in the proposal: .22 x $180,000.00 = $39,600.00
  6. In total: $4,440.00 (department cost-share) + $39,600.00 (Sponsor Paid) = $44,040.00

Person Month Model

  1. Divide the mandated salary cap (here, $180,000.00) by the length of appointment (in most cases, 9) to determine the monthly salary: $180,000.00 ÷ 9 = $20,000.00
  2. Next, multiply the number of summer months of effort times the one month of summer salary: 2 x $20,000.00 = $40,000.00
  3. As for the department’s shared cost, subtract the Salary Cap from the IBS: $200,000.00 (IBS) – $180,000.00 (Salary Cap) = $20,000.00
  4. Divide the difference ($20,000.00) by the length of the individual’s appointment: $20,000 ÷ 9 = $2,222.00
  5. Multiply the number of months of effort times the result to calculate the amount funded by the department: 2 x $2,222.00 = $4,444.00
  6. In total: $4,444.00 (department cost-share) + $40,000.00 (Sponsor Paid) = $44,444.00

III. FACTORING SALARY ESCALATIONS

Once the proposed annual salary amount is calculated, apply the allowable escalation percent, which is generally set by the sponsor, to reflect inflationary and/or legislative increases in future years (commonly known as the Escalated Institutional Base Salary).

For example, if the annual projected salary of the project has been estimated at $13,320 for the first year and a 3% increase is anticipated each year, the salary calculations for a 5-year project would be calculated as follows:

Year 1:  $13,320
Year 2:  $13,320 x 1.03 =$13,719
Year 3:  $13, 719 x 1.03 =$14,131
Year 4:  $14,131 x 1.03 =$14,555
Year 5:  $14,555 x 1.03 =$14,992

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.7 Procedure 3 – Working with Salary Caps

Corresponding with:

Procedure Statement

Fringe benefit rates are expenses directly related to employment.  They are determined by the employee’s classification and applied as a percentage of an employee’s proposed annual salary.

These rates serve as the baseline figures used to calculate fringe benefits.  Social Security rates may vary for post-docs and graduate students depending upon the University’s operating standard and the type of award.

Forms and Instructions

I. ESTIMATING FRINGE BENEFITS – NON-CLINICAL FACULTY AND LICENSED PHYSICIANS

  1. Determine the percentage rate for the applicable employee classification
  2. Multiply the proposed salary for the project times the appropriate percentage rate to calculate the number of fringe dollars: .19 x $21,000.00 = $3,990

II. SUMMER SALARY ESTIMATIONS

  1. The School of Medicine (SOM) provides guidelines for appropriate supplemental benefits.
  2. For each qualifying individual, add 5.5% to the appropriate fringe (19%) based on percentage of effort: 5.5% + 19% = 24.5%
  3. .20 x $115,000 = $23,000 proposed salary
  4. $23,000 x 24.5 = $5,635 proposed fringe benefit

Once the proposed annual salary amount is calculated, apply the allowable escalation percent, which is generally set by the sponsor, to reflect inflationary and/or legislative increases in future years (commonly known as the Escalated Institutional Base Salary).

For example, if the annual projected salary of the project has been estimated at $13,320 for the first year and a 3% increase is anticipated each year, the salary calculations for a 5-year project would be calculated as follows:

Year 1:  $13,320
Year 2:  $13,320 x 1.03 =$13,719
Year 3:  $13, 719 x 1.03 =$14,131
Year 4:  $14,131 x 1.03 =$14,555
Year 5:  $14,555 x 1.03 =$14,992

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.7 Procedure 4 – Estimating Health Insurance

Corresponding with:

Procedure Statement

Health insurance estimations are based on the percentage of effort the employee will work on a project and can differ depending on the classification of the University employee.

Since health insurance covers a 12-month period, no health insurance charges are necessary for a 9-month employee working in the summer.  Thus, it is best to use the annual health insurance rates rather than monthly rates when calculating benefits.

Forms and Instructions

I. ESTIMATING FRINGE BENEFITS – NON-CLINICAL FACULTY AND LICENSED PHYSICIANS

  1. Determine the employee classification annual health insurance rate
  2. Then multiply the applicable premium by the percent of proposed effort: $4,293 x 30% = $1,287.90

II. ESTIMATING HEALTH INSURANCE – CLINICAL FACULTY AND LICENSED PHYSICIANS

  1. The School of Medicine provides guidelines for applying the appropriate supplemental benefits.
  2. For each qualifying individual, add $1,690 to the applicable annual amount: $1,690 + $4,293 = $5,983
  3. 45 x $5,983 = $2,692.35 estimated amount for health insurance based on proposed percent of effort.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.7 Procedure 5 – Estimating Fully Loaded Labor Hours

Corresponding with:

Procedure Statement

Most funding agencies require a proposed budget that estimates the total costs of the project, with a breakdown of cost per year.  A budget based on hourly rates is one that includes the institutional base salary (IBS), fringe benefits, health insurance and F&A together in a lump sum.  It is most often found in subrecipient budgets and must be calculated and shown at the proposal stage.

Once an award is established, the sponsor will request an explanation of the process used to determine the loaded hourly rate.  Thus, proposal budgets should show the cost and designation of each cost within the calculation to accurately report expenditures to the sponsor.

These costs are added together and divided by the number of hours worked per year to calculate an hourly salary rate.  The procedure below provides the steps for calculating such costs.

Forms and Instructions

Use the standard base hours as designated below to calculate fully loaded hourly rates for each. These have been calculated using a total of 2,080 hours per year (based on a 40-hour work week, 52 weeks per year) minus sick days/vacation days/holidays per year.

EHRA Employees, Full-Time, 12-month Appointment 1,696 hours
SHRA Employees, Full-Time, 12-month Appointment 1,768 hours
EHRA Employees, Full-Time, 9-month Appointment 1,272 hours
EHAR Employees, Full-Time, 3-month Appointment 424 hours
Post-Docs, Full-Time 1,808 hours

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.8 – Direct Costs: Non-Personnel

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

In accordance with 2 CFR §200 Subpart E, the Office of Sponsored Research (OSR) requires the inclusion of non-personnel direct costs in proposed budgets.

The budget may include the following non-personnel costs:

  • Capital Equipment
  • Travel Expenses
  • Subrecipient Costs
  • Consultants
  • Tuition
  • Other Direct Costs

Disbursement Services (DS) is responsible for the acquisition of goods and services throughout the University; they provide invaluable information when planning proposal budgets, including University finance policies.

I. CAPITAL EQUIPMENT

To be considered capitalized equipment, and thus, eligible as a direct cost, the proposed equipment must meet the definition of equipment and be listed separately in the proposed budget to prevent inclusion as general materials and supplies.

Before requesting new equipment, the Principal Investigator (PI) must determine that equipment already on hand or readily available will not meet the project’s needs and will not be available for use at the time it is required. Specialized or Fabricated Equipment When deemed necessary, the purchase of specialized or fabricated equipment is frequently considered allowable with advance approval from the sponsoring agency. Requests to build or fabricate research-specific equipment must be identified in the proposal budget and justified with supporting documentation sufficient to obtain approval of the OSR Sponsored Projects Specialist (SPS), before submission of the proposal to the funding agency.

II. TRAVEL

Travel is a direct cost budget item subject to the provisions provided in 2 CFR §200.474.  Foreseeable travel directly related to and necessary for the research project may be included as a direct, non-personnel cost.  Estimations can be calculated by selecting either the University’s travel allowance rates or the General Services Administration (GSA) rates, but not both. Once a method for estimating travel costs is selected, it must be implemented continuously throughout the course of the research project.  Fluctuating between or combining both methods is unallowable.

University employees must also comply with University travel policies.  Sponsor regulations and requirements may differ and take precedence.

If air travel is necessary using Federal grant funds, travelers are required to fly on a United States airline, by Federal regulations of the Fly America Act.

III. SUBRECIPIENT COSTS

Subrecipient costs represent any portion of a sponsored project that is performed by another organization such as subawards and subcontracts.  All direct and indirect subrecipient costs must be identified and justified in the proposal budget.

Outgoing Subrecipient Agreements
The University must obtain the following information when enlisting another organization to provide services on a University sponsored project.

  • Statement of work to be performed by the Subrecipient
  • Proposed Budget and Budget Justification for Subrecipient activities
  • One of the following documents that commit the subrecipient to the activities proposed
    • Letter of Intent signed by the subrecipient’s Institutional Official
    • Signed OMB Form 398 Facepage or OMB Form 2590 Facepage (for NIH proposals only)
  • Additional items as required by the specific proposal guidelines

The total costs for an outgoing subrecipient agreements are considered and written as a direct line item cost in the University’s proposed budget to the sponsoring agency.

Incoming Subrecipient Agreements
These agreements are treated like incoming awards. The proposal package must be routed as an IPF in RAMSeS and include the University’s:

  • Statement of Work
  • Proposed Budget and Budget Justification
  • One of the following documents that commit the subrecipient to the activities proposed
    • Letter of Intent signed by the subrecipient’s Institutional Official
    • Signed OMB Form 398 Facepage or OMB Form 2590 Facepage (for NIH proposals only)
  • Additional items as required by the specific proposal guidelines

The total costs for an incoming subaward or subcontract must include applicable direct and indirect costs.

IV. CONSULTANTS

Consultants are independent contractors unaffiliated with the University, hired to provide specific services for a brief and limited period of time.  Any person receiving compensation from Payroll Services as a University employee does not meet these criteria and therefore, cannot receive separate compensation as a “consultant” for a sponsored project at the University.  This is also the case with collaborative efforts where the “collaborator” is a University employee.  S/he is ineligible for compensation as a “consultant.”

For budget estimations, compensation for a consultant is based on their salary and rate history for comparable services and is subject to funding agency guidelines.  Compensation for consultants is expressed as a daily rate or a fixed amount for the services to be provided.

Although consultants can receive reimbursement for travel expenses, they are not eligible to receive fringe benefits and cannot be provided with supplies, administrative support, or other standard business items.

V. OTHER DIRECT COSTS (ODCs)

ODCs, or remaining costs directly related to a project, must be described in detail in the budget and budget justification to support the amount of those costs.

Tuition Remission

Tuition should be included for eligible graduate students in accordance with the Graduate School’s Guidelines for tuition remission

Apply the appropriate tuition rate for the appropriate graduate program.  Multiplying the percentage of effort times the tuition cost determines the tuition cost per employee. 

Materials and Supplies

Funds may be used to purchase appropriate lab, and project-specific research supplies delivered on or after the beginning date of the project period and received sufficiently in advance of the end date of the project period to be used effectively on the project.

Facilities and Equipment Rentals

Rental space within 10 miles of the University is paid from indirect cost (F&A) receipts.  If the location is further than 10 miles from the University and not owned by the University, the rent should be included as a direct cost in the budget.

Research Service Centers

Costs for highly complex facilities operated by the University, such as specialized computers, wind tunnels, reactors and the like, may be designated as direct costs.

Patient Care Costs

Research patient care costs are the routine and ancillary services provided by hospitals to individuals participating in research programs. The costs of these services normally are assigned to specific research projects through the development and application of research patient care rates or amounts. 

Research patient care costs exclude:

  1. Otherwise allowable items of personal expense reimbursement, such as patient travel or subsistence, consulting physician fees, or any other direct payments related to all classes of individuals, including inpatients, outpatients, subjects, volunteers, and donors.
  2. Costs of ancillary tests performed in facilities outside the hospital on a fee-for-service basis (for example, an independent, privately owned laboratory) or in an affiliated medical school/university based on an institutional fee schedule.
  3. Data management or statistical analysis of clinical research results.

Reason for Standard

In assisting the University’s departmental research administrators, this operating standard provides guidelines for budget planning of direct non-personnel costs in accordance with Federal regulations.

Exclusions and Exceptions

To comply with  2 CFR §200 Subpart E guidelines, the University’s Cost Accounting Standards (CAS) Board Disclosure Statement (DS-2) specifies that clerical and administrative salaries, memberships, postage, subscriptions, telephone line (local) charges, and office supplies are treated as indirect (F&A) costs.

Expenditures for these cost categories are regularly not charged directly to sponsored projects.  Circumstances occasionally arise when these costs have such a specific relationship to the research being performed that their treatment as a direct cost may be considered an allowable exception.  In these exceptional circumstances, the costs in question should be explicit, described in detail, and appropriately supported and justified in proposals and accompanying budgets.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.9 – Direct Costs: Non-Personnel

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Indirect costs or Facilities and Administrative Costs (F&A) are real University costs that are associated with the performance of a sponsored project.  They are incurred for common or joint objectives, which cannot always be specifically identified with a particular sponsored project.  F&A costs are recovered by application of a rate that is applied to a direct cost base.

All grants, contracts and other sponsored agreements accepted by the University will be charged the maximum allowable Federally-negotiated F&A cost rate or other published University F&A rate as determined by the type and location of the sponsored activity.

The University will fully recover its allowable and appropriate direct costs and F&A costs in the budget of every proposal that is submitted for sponsored funding using the appropriate rate.  In accordance with 2 CFR §200.414, the negotiated F&A rate in effect at the time of an initial award will be used throughout the life of each competitive segment even if the F&A rate subsequently changes.

Reason for Standard

In assisting the University’s departmental research administrators, this operating standard provides guidelines for budget planning of indirect costs in accordance with Federal regulations.

Exclusions and Exceptions

Non-Profit and Governmental Sponsors

The University will grant an exception to charging full F&A costs for non-profit sponsors and governmental agencies that have explicit, published policies limiting F&A recovery.  A copy of the published restriction or their F&A rate must be attached to the proposal in RAMSeS.  The reduced F&A rate will be applied to total direct costs unless the sponsor’s published guidance states otherwise.

For-Profit Sponsors

They are charged the full F&A rate appropriate for the project activity.  A subsidy of any cost of the project would constitute a use of public funds for private benefit and would be an improper use of university resources.

Other Exclusions and Exceptions to the full recovery of F&A costs will be made on a very limited basis.

Requesting an F&A Waiver

When an F&A exception is requested for a sponsor who does not have a published restriction, the submitting department should adequately explain and justify the request using the OSR F&A waiver forms.  The request must be attached to the RAMSeS IPF, and the request must be signed by the PI, the Department Chair and the Dean/Director of the School, Center or Institute.   The Executive Director of the Office of Sponsored Research will consider the justification and approve/disapprove the waiver request.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.10 – Just-in-Time Submission Requirements

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Represents the roles of Principal Investigators (PI) and the Office of Sponsored Research (OSR) in reporting Just-in-Time (JIT) information to reinforce OSR as the designated signatory authority regarding the University’s commitment to prevent scientific, budgetary, or commitment overlaps regarding funded research.  Reporting JIT information requested by the funding agency is a twofold process, where the PI provides the JIT information and OSR officially approves the accuracy of the information prior to submitting it to the sponsoring agency. In particular, the National Institutes of Health (NIH) requires submission and approval of JIT documentation electronically through its monitoring system, eRA Commons.

The PI is responsible for notifying OSR when JIT information has been uploaded and is ready for final review and approval.

For other funding organizations that require post-submission information, the PI must provide the following to OSR for approval and routing to the sponsoring agency:

  • Cover letter signed by the PI
  • Post-submission documentation submitted to OSR for signature and approval
  • Copy of the notification from the sponsor requesting post-submission information

Reason for Standard

This standard establishes the expectations for post-submission requests that need to be submitted to the sponsor.

Exclusions and Exceptions

The University does not allow for approvals after submission of JIT documentation.  All approvals must be completed and entered into NIH eRA Commons prior to submission by OSR to the sponsoring agency.

The Sponsored Programs Office (SPO) is responsible for JIT submissions emanating from the School of Medicine.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu. For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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300.10 Procedure 1 – Completing JIT Requirements for NIH Proposals

Corresponding with:

Procedure Statement

The Office of Sponsored Research (OSR) approves Just-in-Time (JIT) Requirements for National Institutes of Health (NIH) awards through eRA Commons.*  The Principal Investigator (PI) first supplies the information in eRA Commons and in RAMSeS, then notifies OSR, who then reviews and approves the information before submitting the approval to NIH and updates University records.

*The Sponsored Programs Office (SPO) approves JIT requirements for proposal and award management administered by the School of Medicine (SOM).

Forms and Instructions

I. PRINCIPAL INVESTIGATORS

  1. In response to the request for JIT information, logon to eRA Commons, click the “Status” tab to locate the proposal in question.
  2. Select the JIT link and provide the required information and select “Save.”
  3. To notify OSR that the information is ready for approval, logon to RAMSeS, locate the proposal from the list of “Submitted” proposals and select the “Approved” link, a pop-up box will appear, from the box, select “Just in Time Received.”
  4. The request is electronically sent to OSR for final approval

II. OFFICE OF SPONSORED RESEARCH

  1. Reviews JIT information in eRA Commons and either approves or refuses the request in eRA Commons.
  2. Updates the status in RAMSeS to “Just in Time”

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC Chapel Hill’s Division of Finance.

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Award Acceptance and Establishment

400.1 – OSR Award Management Responsibilities

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The University conducts research financial and program management in accordance with the Federal regulations of  2 CFR §200 Subpart C and 2 CFR §200 Subpart D, which governs the requirements of pre and post-award administration of grants and agreements at Universities.

The Research Administration unit in the Office of Sponsored Research (OSR) is the designated University unit responsible for the administration of contracts, grants, and cooperative agreements

Each Research Administration unit acts as a liaison among University business offices, sponsoring agencies, Principal Investigators (PIs) and project directors to ensure that sponsored research or training is properly authorized and conducted in conformity with administrative and fiscal requirements.   Research Administration teams consist of the following components:

Preaward Management – Each department is assigned a Sponsored Projects Specialist (SPS) to assist in preparing proposals, reviewing and providing institutional approval for completed proposals and submitting completed proposals to funding agencies.

Award Management – Each department is assigned an SPS for sponsored research projects, from the time the proposal is funded until its ends.  The SPS provides oversight for issues that may arise during the life of the project and serves as a liaison with the sponsor.   These teams facilitate a range of research administration needs, from contract negotiation to issuing subrecipient agreements, or implementing certain budget revisions.

Reason for Standard

The Office of Sponsored Research’s Research Administration unit delineates specific tasks regarding award establishment and financial administration to maintain accurate, current award records and other requirements of sponsored program management, as mandated by Federal, state and University regulations.

Contacts

The Office of Sponsored Research’s Research Administration unit delineates specific tasks regarding award establishment and financial administration to maintain accurate, current award records and other requirements of sponsored program management, as mandated by Federal, state and University regulations.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC Chapel Hill’s Division of Finance.

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400.2 – OSR Communications with Sponsors

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Communications between the University and sponsoring agencies related to administrative management of projects are to be coordinated through the responsible Sponsored Projects Specialist (SPS) in the Office of Sponsored Research (OSR).

The SPS serves as the liaison between the administering award department and the funding agencies to ensure University compliance with 2 CFR §200 Subpart E requirements and agency guidelines.  The Principal Investigators (PIs) and Departmental Administrators (DAs) are required to consult with and inform their assigned SPS regarding award adjustments that require institutional approvals and authorizations, particularly changes affecting the budget, effective dates, funding revisions and effort reporting.

Exclusions and Exceptions

Technical or programmatic communications between PIs and program officials of the sponsoring agencies are authorized and encouraged. However, agency program officials (technical or scientific representatives) do not have approval authority regarding contractual matters.  Any activity that may affect contractual agreements requires coordination between authorized agency personnel, the appropriate SPS, and the PI.

Reason for Standard

The purpose of this standard is to reinforce the prohibition on administrative communications with sponsors without involvement by a central office.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC Chapel Hill’s Division of Finance.

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400.3 – PI & DA Responsibilities at Project Setup

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

I. Principal Investigators

The Principal Investigator (PI) is responsible for reviewing the award document to familiarize him/herself with the terms, conditions and project expenditure restrictions.  Also, when the award is initiated, the PI must ensure compliance issues are properly managed. Departmental Administrators (DAs) of award Project IDs also review the award document to identify restrictions on cost allocations for spending, as well as agency reporting requirements.

Since DAs work in conjunction with PIs for various aspects of research administration, including personnel funding, purchasing, and other similar matters, they must pay careful attention to award terms and conditions, effective dates, and any restrictions, in consultation with the Office of Sponsored Research (OSR).

Transactions must adhere to the attributes, structure, and accounting methods established by the University, and display Project IDs accordingly on forms for routing, approval, and electronic data processing.

II. Department Administrators

  • Conduct Review of Award Documents
    • Identify restrictions
    • Note reporting requirements
    • Check for purchasing/spending authorizations under the award terms and conditions
    • Initiate, monitor, and maintain current financial information regarding the award
  • Setup a System for Monitoring Post-Award Activities
    • Prepare personnel transactions upon assignment of a Project ID number. Include information that affects salary, such as salary caps, cost sharing, rate of pay compensatory to amount of full-time effort (FTE), etc.
    • Create tracking for direct costs, indirect costs, subrecipient costs, and consultant expenditures.
    • Establish reminders for deadlines of financial, progress and technical reports.
    • Monitor spending, IPAs and prior approval requirements in light of the award funding.
    • Communicate regularly with those responsible for project activity to prepare requirements in a timely fashion.
    • Handle transactions and reconciliations by anticipating end-of-budget periods and other changes.

Reason for Standard

This standard is to properly inform Principal Investigators and Departmental Administrators of their responsibilities when receiving sponsored projects and the steps required at project setup.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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400.3 Procedure 1 – Establishing Departmental Post-Award Monitoring

Corresponding to:

Procedure Statement

Completing successful award management is dependent on establishing a solid monitoring mechanisms maintained by the department receiving the award. Monitoring is an essential activity throughout the life of the project and is particularly important for financial management. These processes should be established for each award at the receipt of funding. Departments may use the monitoring mechanisms that work best for their department to maintain financial and personnel data for each sponsored project.

Forms and Instructions

I. MONITORING ELEMENTS

Award Notice Review

  • Award Restrictions
  • Financial and Scientific Reporting Requirements
  • Spending Authorizations
  • Funding Amounts

Personnel Records

  • Prepare personnel actions once a Project ID is assigned
  • Set effort to match levels as proposed or awarded

Graduate Students

  • Properly setup payments for student tuition, salary, and stipends

Reporting Requirements

  • Confirm responsibilities for reporting requirements
  • Maintain a calendar to track known due dates

Tracking Select Expenditures

  • Subrecipients
    • Establish performance measures
    • Track subrecipient direct costs by invoices submitted
    • Obtain PI signature on invoices and process payments through ConnectCarolina
    • Confirm receipt of a final invoice
  • Consultants
    • Confirm compliance with agency guidelines when dealing with consultants
    • Identify expense fees and rates
    • Complete University required forms and procedures to pay consultants
    • Track expenditures
    • Check invoices to confirm services performed
  • Services
    • Confirm services are required to be established as a Subrecipient
    • Review service agreements
    • Track expenditures
    • Monitor specialized facilities and use of Research Service Centers

II. HELPFUL SYSTEMS FOR MAINTAINING PROPER MONITORING

Successful sponsored award monitoring requires the knowledge of basic University systems — RAMSeS, the University’s financial system, ConnectCarolina, and InfoPorte.  All three systems require access privileges, which can be obtained through the authorized role managers within each department.

RAMSeS

Award data access in RAMSeS allows the user to view the awards administered by the department.  In the Award Administration window, the user can view the various elements of the award by clicking on specific tabs, which resemble hard file tabs.  From these tabs, the user can access uploaded documents, such as the original proposal and IPF, notes, and attachments in making determinations about award management and reporting requirements.  Under the “attachments” tab (indicated by a paperclip icon), any of the following documents can be uploaded and reviewed for possible effects on financial management and reporting requirements.

ConnectCarolina

ConnectCarolina is the University’s official electronic financial system.  Each month project expenditures should be reconciled to confirm all expenses are correct.  Accounting Services provides services and instructions on how to manage financial transactions in ConnectCarolina.

InfoPorte

InfoPorte is a platform that works with ConnectCarolina that delivers administrative reports for the Finance, Human Resources, and Student Administration functions. InfoPorte also includes small applications that support administrative functions for some schools and units.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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400.4 – Award Notification and Acceptance

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The terms and conditions of any award notification from a funding agency require review by the Office of Sponsored Research (OSR) Research Administration unit before OSR’s acceptance of the award on behalf of the University.

Principal Investigators (PIs) do not have the authority to accept awards. Awards to the University may be accepted only by the Chancellor or those he has delegated signatory authority to.  No other individuals are authorized to commit or otherwise bind the University.

Also, OSR is responsible for negotiating appropriate terms if an award:

  • Contains provisions incompatible with University policy and operating standards
  • Is inconsistent with Federal regulations regarding sponsored research at universities
  • Fails to include all elements agreed upon before the award
  • Requires modifications to conform to the PI’s needs

Upon formal acceptance of an award, the University becomes legally bound to abide by the terms and conditions as outlined in the executed agreement.  Following acceptance, OSR informs the PI and Department Administrator of the award notification, which is uploaded to the award module in RAMSeS.

Project directors and PIs are responsible for conducting the sponsored effort in accordance with award terms and conditions and within the funds allocated for such effort.

Deans, directors, and department heads have corollary responsibility for assuring that all sponsored research and training conducted within their jurisdiction is consistent with University operating standard and available funds.

Reason for Standard

This operating standard establishes the Office of Sponsored Research as the designated division responsible for accepting, administrating, negotiating and managing sponsored awards on behalf of the University.

Exclusions and Exceptions

  • If the PI receives an award notification directly from an agency, he/she is required to notify OSR and forward the award notification to OSR Research Administration for any required signatures and set-up. Likewise, if any award funds are received by the department or PI, they must be sent directly to OSR for deposit.
  • Industry awards or other awards with non-standard patent, copyright or licensing terms are reviewed in conjunction with the Office of Technology Commercialization (OTC) or other appropriate University units.
  • If the award is for less than the University-proposed amount, the amount may be prorated across budget categories to establish the award within the budget restraints. This can include a request to the department to prepare revisions to the budget

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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400.5 – Establishment of Project IDs for Sponsored Projects

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The determination of how a Project ID is established is dependent on the award notification, applicable University policies, sponsor policies and guidelines in 2 CFR §200.

Following receipt and acceptance of an awarded grant or cooperative agreement, the Office of Sponsored Research (OSR) will create an individual Project ID for the award and any necessary additional Project IDs, in the University’s financial system, ConnectCarolina.

The department is notified electronically when the fund authority has been prepared by OSR, thereby indicating the Project ID has been activated

Assignment of a Project ID number may be delayed if the following conditions exist:

  • Agreement requires negotiation
  • Award Documentation not submitted to OSR
  • Unapproved Project Financial Guarantee for establishing Preaward spending on a project that is expected to be funded
  • Regulatory compliance information has not been completed
    • Conflicts of Interest
    • IRB Approvals
    • IACUC Approvals
  • The amount awarded is significantly less than the amount proposed, and a revised budget is required
  • The amount awarded is significantly higher than the amount proposed, and a supplemental IPF is required for the difference
  • Prior Approval actions have not been completed

Reason for Standard

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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400.6 – Preaward Spending

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

With proper approval, project costs may be incurred before the receipt of an award and the start date of an award, provided each of the following criteria are met:

  • Costs are underwritten by the department administrating the award
  • Costs are deemed necessary to the establishment of the project.
  • Costs meet the allowability requirements of 2 CFR §200 – Subpart E and 2 CFR §200.209 and specific sponsor regulations

Once these criteria are met and the necessary approvals obtained, the Office of Sponsored Research (OSR) establishes a Preaward spending Project IDs for essential expenditures.  In the event that the award is not funded the department is responsible for any costs incurred.

Upon receiving official notification that an award is forthcoming, a Preaward spending Project IDs is validated for a set period of 90 days but is not assigned a budget.  All charges are processed through OSR’s pre-audit department before approval of essential expenditures.

When the actual award notification is received from the sponsor by OSR, the Project ID is established in ConnectCarolina.  If the award notification is not received within a 90-day period, the department must request an extension or OSR will send a summary of expenditures to pay from departmental accounts.  Since some award notifications may take longer than 90 days to arrive, the timing of notifying departments of expenditures are adjusted accordingly.

A Preaward spending Project ID may be established using one of the following methods:

I. FINANCIAL GUARANTEE

When a sponsor agrees to fund an award, but the award notice has not been received and officially approved by the University, the PI can initiate the project and incur necessary set-up costs by generating a financial guarantee request in RAMSeS, obtaining the proper electronic signatures, and submitting it to OSR.  Assurances of funding (such as a letter of intent from the funding agency) and other applicable supporting documentation must accompany the request in RAMSeS.

By approving the Financial Guarantee, the dean, director, or department head agrees to underwrite all expenses on behalf of the applicable unit or department, should the award be rescinded for any reason.

II. PRIOR APPROVALS

Projects may require sponsor approval in advance of select activities such as Preaward spending.

Most Federal sponsors allow the university through expanded authorities to allow the University to incur Preaward costs 90 days before the start date of the award. Requests under expanded authorities still require OSR approval. Other sponsors may require formal requests submitted to the sponsor, requiring OSR submission and approval, to request Preaward spending.

It is important to be aware of the sponsor’s prior approval requirements before taking action.

Reason for Standard

This operating standard protects the University from fraud and misuse of funds by defining the instances where pre-spending may be allowable.  It also establishes the Office of Sponsored Research as the authorized University office responsible for establishing Preaward spending.

Exclusions and Exceptions

  • No Preaward funds can be expended for any research involving human and animal subjects until OSR has received the certification of IRB and/or IACUC approval. Preaward spending in other areas of research (those that do not involve human and animal subjects) is allowed.
  • A Preaward spending Project ID may be extended by 90 days through a written request. However, this may require a second Financial Guarantee approved by a higher administrative level.
  • Non-personnel transactions will not be approved after the expiration of the Financial Guarantee period unless an award notification has been received or an extension granted.

Procedures and Related Policies

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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400.6 Procedure 1 – Submitting a Financial Guarantee Request

Corresponding to:

Procedure Statement

A Financial Guarantee is prepared and submitted electronically through RAMSeS.

Forms and Instructions

  1. Locate the submitted proposal in RAMSeS for which you want to request a financial guarantee
  2. Click on the proposal number to reach the “Proposal Routing Status” screen
  3. Select the tab entitled “Financial Guarantee”
  4. Select the link “Add Financial Guarantee to Proposal,” and a pop-up form will appear requesting Financial Agreement Information
  5. Fill out the form and click the “Submit” button. Include sufficient justification to support the likelihood of the award and the necessity for an early account
  6. The form is electronically routed for internal departmental approval and forwarded to OSR for review and approval

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Award Management

500.1 – Federal and University Award Management Guides

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The University manages sponsored awards according to the mandated requirements of 2 CFR §200 and the University’s Cost Accounting Standards Board Disclosure Statement (DS-2) published by the Office of Sponsored Research (OSR). 2 CFR §200 Subpart E mandates the Federal guidelines applicable to allowable costs in research grants, contracts and cooperative agreements in colleges and Universities nationwide.  In conjunction with compliance with the Cost Accounting Standards provided in 2 CFR §200 Subpart E, the DS-2, which is required by law, presents the University’s cost accounting practices in maintaining:

  • Consistency in estimating, accumulating and reporting costs
  • Consistency in allocating costs incurred for the same purpose
  • Accounting for unallowable costs
  • Accounting period

University faculty and staff involved with procuring and managing sponsored funding are required to abide by the standards presented in both documents.

Reason for Standard

This operating standard serves to inform researchers and research administrators at the University of the legal standards mandated by the Federal government, to which faculty, staff, and students must adhere.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.2 – Departmental Award Management Responsibilities

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The department receiving the sponsored research award is responsible for the daily management and administration of the related accounts.  This requires closely monitoring expenditures to assure that the terms and conditions of the award are being followed and that funds are being expended in accordance with 2 CFR §200 Subpart E requirements for allowability, allocability and reasonableness, and in accordance with University policies.

It is the dual responsibility of the Principal Investigator (PI) and the Department Administrator (DA) to monitor and approve all expenditures related to the sponsored project.  Any unallowable expenditures or deficit balances become the responsibility of the administering department to pay from other departmental funds and not from a sponsor award account.

The original records and supporting documents of expenditures should be maintained by the department for three years or more depending on sponsor requirements.

Once the award is established in RAMSeS, DAs are responsible for reviewing the award document, reconciling it with the information in ConnectCarolina, and communicating any corrections or inconsistencies to the Office of Sponsored Research (OSR) Research Administration division.

Transactions must adhere to the attributes, structure, and accounting methods established by University Accounting Services, and display Project ID numbers accordingly on forms for routing, approval, and electronic data processing.

DEPARMENT ADMINISTRATORS:

I. Conduct Review of Award Documents

  • Identify restrictions
  • Note reporting requirements
  • Check for purchasing/spending authorizations under the award terms and conditions
  • Initiate and maintain current financial information in ConnectCarolina

II. Setup a Post Award Monitoring Process

  • Prepare personnel transactions upon assignment of a Project ID.  Include personnel information that affects salary, such as salary caps, cost sharing, rate of pay compensatory to amount of full-time effort (FTE), etc.
  • Create tracking for direct costs, indirect costs, subrecipient costs, and consultant expenditures.
  • Establish deadlines for financial, progress and technical reports.
  • Monitor spending, IPAS and prior approval requirements in light of the award funding.
  • Communicate regularly with those responsible for project activity to prepare requirements in a timely fashion.
  • Handle transactions and reconciliations by anticipating end-of-budget periods and other changes.

III. Use Post-Award Monitoring to Review Financial and Programmatic Transactions throughout the Life of the Project

  • Perform cost transfers.
  • Perform budget revisions.
  • Compare and balance award expenditures using ConnectCarolina.
  • Circumvent unallowable expenditures and overdrafts.

Reason for Standard

Providing such general responsibilities clarifies expectations and specific tasks of award management that are ascribed to Principal Investigators and Departmental Administrators.

Exclusions and Exceptions

Sponsored research often generates program income, such as fees for laboratory services, conference fees, third-party patient reimbursements, etc.  Treatment of program income varies by agency therefore, the appropriate OSR Sponsored Projects Specialist should be notified in cases where program income is foreseeable or accumulates to establish the proper accounting method to maintain such income in accordance with Federal requirements.

Procedures and Related Policies

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.3 – Prior Approval Requests

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Unanticipated changes to a sponsored project are sometimes needed after it has been proposed and awarded. Sponsors may require different methods of requesting approval to make such changes. These Prior Approval Requests may be able to be approved internally by the Office of Sponsored Research (OSR) through expanded authorities. Other types of changes require formal authorization from the sponsor.

I. IDENTIFYING CHANGES FOR PRIOR APPROVAL

Prior Approval requirements depend on the sponsor and the individual project’s terms and conditions. It is important to identify the guidelines for each project before requesting approval. Standard types of project changes include the following:

  • Additional Funding Requests
  • Alterations and Renovations Costs
  • Budget Revisions that need Sponsor Approval
  • Change to the Project’s Scope
  • Changing the administrative institution of a project
  • Equipment purchases not proposed or at the end of the project
  • Foreign Travel
  • Changes to Key Personnel and their effort
  • Establishing a new foreign component or foreign subrecipient
  • Establishing a new subrecipient collaborator
  • Requests for No Cost Extensions
  • Changes to Patient Care Costs or Participant Costs
  • PI Changes or disengagement
  • Pre-Award Spending
  • Requesting carryover of unobligated funds from a previous budget period

II. APPROVAL METHODS

Prior Approval Requests have two approval methods. The request can be internally approved by the OSR or it must be externally approved by the sponsor. Both types of requests must be submitted through OSR. Principal Investigators and Departmental Administrators are not authorized to communicate Prior Approval Requests directly to the sponsor.

Many Federal sponsors allow the University to approve select types of unanticipated changes internally for grants and cooperative agreements. This is commonly known as expanded authority, issued through 2 CFR §200.308 and the Federal Research Terms and Conditions. OSR is the designated unit that reviews, approves, and documents such types of prior approvals.

Changes that require external approval require a formal request submitted to the sponsor. This should detail, what the change is, how this impacts the project programmatically and financially, and why it is necessary to the project.

Assistance is available to help determine which method of approval applies to a project. OSR is able to provide guidance on the appropriate method. They are also authorized to make the final determination on which method is required.

III. SUBMITTING A PRIOR APPROVAL REQUEST

Prior Approval Requests are created by submitting a Prior Approval Request Form and any additional documentation to OSR (ResAdminOSR@unc.edu). The form allows the user to select the needed project change and gives instructions on what documentation is needed. OSR will return any requests that are not complete or do not include the required documentation.

Complete requests will then be directed to the appropriate OSR Sponsored Projects Specialist (SPS). The SPS will review the request and all relevant guidance. Once the review is complete, the SPS will either approve or deny the request. Requests for internal approval will then be documented in RAMSeS. Requests for external approval will then be submitted to the sponsor by the SPS.

External approvals will be monitored by the SPS pending the sponsor’s decision. The final approval or denial from the sponsor will then be communicated to the PI and Departmental Administrator once it is received. This response will be documented in RAMSeS.

Reason for Standard

This operating standard is established to adhere to the University’s obligations as a recipient of sponsored projects specifically under 2 CFR §200.308 and the Federal Research Terms and Conditions.

Exclusions and Exceptions

Federal agencies may provide additional restrictions on prior approvals included in expanded authorities. Such restrictions will be identified in the Award.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.4 – Pre-Audit Approval of Transactions

Responsible Officer: Director
Responsible Unit: Cost Analysis and Compliance
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

During the life of an award, the pre-audit unit of the Office of Sponsored Research (OSR) reviews expenditures (except personnel) for approved budgeted items to assure appropriate spending according to Federal regulations 2 CFR §200 Subpart E and 2 CFR §200 Subpart D and the specific award terms and conditions.  To avoid possible spending and accounting errors, the Principal Investigator (PI) and Departmental Administer (DA) should interact and advise OSR when considerations arise that may affect the allowability of expenditures.

When requesting information about allowable expenditures, providing the following award details helps OSR provide a timely response:

  • ConnectCarolina Project IDs
  • Funding Agency Award Number
  • Name of Principal Investigator
  • Any applicable subrecipients or consultants, applicable project numbers, contacts and phone numbers.
  • Detailed explanation of the request.

Reason for Standard

The reason for this standard is to detail the compliance activities that are conducted for expenses on sponsored projects.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.5 – Personnel Expenditures

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Significant variations in policy directives from sponsoring agencies mandate that each is consulted for authoritative guidance on acceptable expenditures.  The guidelines provided in this and subsequent operating standards are not all-inclusive, nor do they consistently apply to every sponsored project.  However, they do serve to inform researchers of the University’s common approaches for managing several types of expenditures.

Careful consideration is required in planning budgets to account for each expenditure.  Budgetary cushions or allowances for unexpected expenditures (commonly known as “padding”) are not allowable on sponsored projects. This does not preclude the utilization of reasonable escalation factors applied to personnel costs such as salaries and wages.-

I. EXPENDITURES REGARDING PERSONNEL

Salaries and Wages All personnel commitments are handled in conformity with established University salary and wage policies.  Budgetary data contained in a proposal does not in any way supersede such policies.

Salaries, wages, and related costs are allowable as a direct cost to the extent that they are reasonable, conform to the established University salary and wage policy, and are certified in the Effort Certification and Reporting Technology (ecrt) system according to the percent of the employee’s FTE (full time equivalent) effort.  Amounts charged to contracts and grants are based upon the University payroll. After-the-fact effort certifications are also required by the Federal government to sustain the distribution of effort for professional and staff members.

Overtime for professional personnel is not permitted. Overload, or one-time, payments for additional duties unrelated to an employee’s regular responsibilities are governed by the Office of Human Resources (OHR).  Overtime for non-professional personnel is allowable to the extent approved by the awarding agency.  The Office of Sponsored Research (OSR) is to be notified immediately of any situation which may require incurrence of significant overtime.  In cases of salaries charged partly to grant or contract funds and partly to institution funds, overtime premium costs must be proportionate to that of the funding sources.

Congress has imposed a limitation, or cap, on the amount of annual reimbursement of direct salary for individuals on grants, cooperative agreements, and contracts awarded from some Federal agencies.  This salary cap is an annual requirement that is subject to change with each congressional appropriation.  If an individual’s annual salary is greater than the Federal salary cap(s), the difference in effort must be cost-shared by the department.

Due to the inconsistent nature of possible exclusions and exceptions, allowability of any deviations from the general guidelines is determined on an individual, case-by-case basis, in concert with the assistance of the administrating Sponsored Project Specialist in OSR.

Unallowable Honoraria

An honorarium payment is characterized by the primary intent to confer distinction upon an individual. Payments of this nature are unallowable charges to sponsored research.  Also, the term “honorarium” should not be used to refer to consultant services.

Stipends

Stipends for fellows and trainees are permissible only on training or fellowship grants.  Payments to individuals working on Federal research projects, including graduate students, are considered salary payments and must be reflected as such on the personnel activity report.

Reason for Standard

The purpose of this standard is to identify the guidelines for handling personnel costs on sponsored projects.

Procedures and Related Policies

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.6 – Institutional Base Salary for Sponsored Project

Responsible Officer: Director
Responsible Unit: Cost Analysis and Compliance
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The Institutional Base Salary (IBS) is the annual compensation paid by the University for an employee’s appointment. This is independent of whether the individual’s time is spent on research, teaching, patient care, or other activities. IBS does not include bonuses, one-time payments, or incentive pay. Salary paid directly by another organization is also excluded from the IBS. This includes income, such as consulting activities, that an individual may earn outside of an individual’s University appointment as provided under the University’s Policy on External Professional Activities for Pay.

I. INSTITUTIONAL BASE SALARY DEFINITION

The University’s Institutional Base Salary:

  1. is set in advance by the University and is consistent with University compensation policies;
  2. may not be increased simply as a result of the receipt of additional sponsor project funds;
  3. is based on a full-time workload and guaranteed by the University regardless of the source of funding;
  4. includes regular salary and any compensation related to a second assignment such as chairing a department, Institute Director, service on University Committees, and;
  5. excludes bonuses, honoraria, and incentive pay.

II. INSTITUTIONAL BASE SALARY IN SPONSORED PROJECT PROPOSALS

The anticipated effort is measured in person-months or percent effort and must be calculated using the individual’s IBS. Budgeting for an individual’s salary charges is determined by applying the amount of an individual’s proposed effort to the individual’s IBS. This applies when requesting salary support from a sponsor or providing effort on a sponsored project in the form of mandatory or voluntary committed cost sharing.

III. WORKING WITH SPONSOR SALARY CAPS

Certain sponsors impose a limit or cap on the amount of salary charged to a sponsored project. The salary cap may or may not apply when preparing the proposal depending on the submission type. However, the salary rate cap will apply once an award is issued. Please read sponsor proposal guidelines to identify if such requirements apply.

IV. NINE-MONTH ACADEMIC APPOINTMENTS

Faculty compensated by 9-month academic appointments are available to earn up to three months of additional salary for that effort, subject to sponsor policies. This is applicable during the period between spring and fall semesters. If a faculty member has administrative or other non-research responsibilities, including vacations, during the summer period, they may not be allowed to devote 100% effort to sponsored projects for the period. Faculty members who have administrative or other non-research responsibilities, including vacations, during the summer period may not be allowed to devote 100% effort to the sponsored projects. In such cases, faculty members are not able to request three full months of summer salary. Salary charges to sponsored projects must accurately reflect how the faculty member spent their University effort during the effort reporting period of performance.

V. ROLES AND RESPONSIBILITIES

These units are responsible for the following components of working with and appropriately managing Institutional Base Salaries.

Chairs, Deans, Provost, Vice Chancellors, and other Supervisors

  • Offer Letters for new hires clearly indicate the approved IBS
  • Any subsequent salary adjustments are documented with the approved, revised IBS

Principal Investigators

  • All requests for salary support in sponsored project proposals are based on the individual’s approved IBS

Department, School, and College Administrator

  • Proposal budgets include salary requests based on the individual’s established IBS and anticipated effort to the sponsored project
  • ConnectCarolina HR/Payroll entries are correctly based on the individual’s IBS
  • Retain copies of appointment and salary adjustment notifications for audit purposes

Office of Sponsored Research

  • Proposal budgets include accurate salary requests based on an individual’s approved IBS
  • Review and approve proposals, including budgets, requesting funding from external sponsors

Reason for Standard

This policy defines Institutional Base Salary (IBS) for sponsored research projects and effort reporting purposes. The University of North Carolina at Chapel Hill is committed to ensuring that personal compensation charges on sponsored projects are based on an individual’s IBS, consistent with the requirements of the Office of Management and Budget – Uniform Guidance, 2 CFR §200.

The Federal government requires recipients of Federal funds to establish an institutional policy that documents the work covered by the University’s set IBS. The University applies these Federal requirements consistently to all sponsored projects.

Failure to accurately propose, charge, and document salaries may result in financial penalties, expenditure disallowances, and harm to the University’s reputation.

Procedures and Related Policies

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.7 – Cost Sharing

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Mandatory cost sharing may be imposed on the University by a sponsor as a condition of research or training support.  Cost-sharing obligations must be kept within reason and capable of being fulfilled from acceptable resources available to the Principal Investigator (PI), department, school, or center involved.  There must be no doubt concerning the ability of the University to meet the commitment from acceptable resources.

Voluntary cost sharing from the University results in unfavorable financial conditions and is strongly discouraged.  A proposal containing voluntary cost sharing that is accepted by the sponsor can be a financial liability since the University becomes legally bound to adhere to the cost-sharing terms and conditions throughout the life of the award.

I. CRITERIA FOR ALLOWABILITY

Cost sharing involves the commitment of University funds or resources and can constitute mandatory, voluntary, matching, contributed effort and in-kind methods.  To be considered acceptable as Federal cost-sharing or matching costs, contributions to a project must meet each of the following criteria:

  • Verifiable from University records
  • It must be defined as an acceptable form of cost sharing for that specific project, and it cannot share duplicity with any other program
  • Necessary and reasonable for proper and efficient accomplishment of project objectives
  • An allowable charge according to applicable cost principles
  • Not chargeable to any other grant or contract

II. TYPES OF COST SHARING

Matching involves a University contribution of hard dollars, or funds, specifically appropriated for and allocated to the project.  The allocation and billing of project costs are processed according to the terms of the sponsored agreement.

In-kind contributions are often encountered in public service-oriented projects, usually involving the contribution of services from outside the University, such as a donation of time.  Although the University does not pay for such services, they still require documentation.  Records should contain the dates worked and the hours donated by the individual.  The value of such services is calculated at the usual and customary rate for the area unless otherwise specified by the sponsor.

Since the contribution of resources under an in-kind agreement is not under the University’s control, much care must be exercised before entering into such agreements. Once active, in-kind contributions are frequently monitored to ensure that the cost-sharing agreement is fulfilled.

Failure to meet or adequately document in-kind contribution requirements could result in the disallowance of a pro-rated portion of University-incurred costs, which could prove to be detrimental. OSR should be notified immediately if such problems are encountered.

The Appropriations Act of the Department of Health and Human Services places a salary limitation, or cap, on grants and contracts from the National Institutes of Health (NIH) and Substance Abuse and Mental Health Services Administration (SAMHSA). Under this limitation, the amount of direct salary of an individual that can be charged to the grant is limited to the rate approved by the agency.  Individuals charged to these programs earning more than the limitations for that fiscal year require a cost sharing commitment by the department to document that the rate does not exceed the limitations.

III. CONTRIBUTED EFFORT

While various approaches to cost sharing are often used in combination with a particular project in satisfying a cost-sharing obligation, the most commonly used at the University is contributed effort.

Faculty and Staff Funded by Non-Sponsor Sources
As a matter of practicality, where cost sharing is assumed and when circumstances permit, the University recommends the use of non-Federal sources to fund faculty and staff time contributed to the project. This is the method most frequently used, as it is the most practical for record keeping.  With the acceptance of a properly annotated personnel action form, cost-sharing dollars are automatically accumulated on the associated expenditure report and embodied in the effort certification.

Documentation of Established Criteria
All cost sharing is documented in accordance with established criteria under Federal cost principles for educational institutions, 2 CFR §200.306.  Therefore, it is crucial to accurately delineate an individual’s participation or involvement on a project in the proposal.  This helps to avoid any misunderstandings regarding cost-sharing obligations intended by the University. Effort Must Be Documented through ecrt Specific commitments of effort must ultimately be embodied in a cost-sharing budget and documented in the Effort Certification and Reporting Technology system (ecrt).  Regardless of the selected approach, faculty and staff for whom contributions of effort are volunteered are responsible for awareness of and concurrence with those commitments as they are required to fulfill them.

Reason for Standard

The University offers this operating standard to provide clarification and guidance as to University practices regarding cost-share for sponsored projects, in conjunction with Federal regulations governing allowability.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.8 – Capitalized Equipment

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The Office of Sponsored Research (OSR) is responsible for establishing and maintaining accountability for capitalized equipment acquired under research grants, contracts, and subrecipient agreements in accordance with sponsoring agency directives, Federal guidelines defined in  2 CFR §200 Subpart E, 2 CFR §200.313, and University policy.

Equipment purchases are required to meet criteria for effective utilization as defined by the sponsoring agency, to prevent cost disallowances or exceptions by auditors.  Also, to be considered “effectively utilized,” purchases of authorized equipment must be made well in advance of the end date of the project period.

I. PRINCIPAL INVESTIGATORS RESPONSIBILITIES

Principal Investigators (PIs) are required to coordinate with the sponsoring agency, OSR and Asset Management in obtaining, controlling, and managing equipment for their research projects.

The PI is also responsible for:

  • Ensuring the equipment is in good condition and as ordered upon receipt
  • Reporting discrepancies or damages to Procurement Services
  • Maintaining physical control of all equipment acquired
  • Safeguarding equipment against loss, damage, or unauthorized use
  • Notifying Asset Management of major changes in the location of equipment
  • Instructing subrecipients of compliance and requirements regarding equipment

II. SPECIALIZED/FABRICATED EQUIPMENT

Requests to build or fabricate research-specific equipment must have been previously identified in the proposal budget and justified with sufficient documentation to identify the costs of individual items that, when fabricated, make the capitalized functional piece of equipment.

Costs associated with the fabrication process are incurred in a sub-Project ID established to capture them as direct costs.  Upon completion of the fabrication, a description of the equipment is provided to Asset Management to provide for tagging and inclusion in the University’s capitalization program.

While individual components composing a piece of fabricated equipment may cost less than $5,000, the finished piece as a whole is often worth more than the $5,000 capitalization threshold defining capitalized equipment, which is allowable as a direct cost.  Therefore, all costs associated with the fabrication process must be transferred to the prime Project ID and coded as equipment within 30 days, or risk the possibility of component items valued below the $5,000 threshold being allocated as Indirect (F&A) costs.

Reason for Standard

The University offers this operating standard to provide clarification and guidance as to University practices regarding expenditure inquiries regarding equipment, in conjunction with Federal regulations governing allowability and allocability.

Procedures and related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.9 – Transfer or Sale of Capitalized Equipment

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

I. EQUIPMENT LOANS

It may occasionally be necessary to loan equipment purchased with contract and grant funds to organizations or institutions participating jointly in a sponsored project. When State or Federally-owned equipment is loaned or transferred, it must be coordinated according to the procedures of Asset Management in conjunction with the Office of Sponsored Research (OSR) and the sponsoring agency.

Although Asset Management is the unit responsible for final decisions on capital equipment management throughout the University, when questions arise regarding capital equipment purchased or paid for with sponsored funds, OSR serves as the primary contact.

II. TRANSFER OF EQUIPMENT OR SPONSOR PROPERTY TO OTHER INSTITUTIONS

After a researcher’s decision to transfer to another institution, equipment purchases should be limited to those necessary to complete research at the University.  That institution should purchase additional equipment necessary to continue research at the receiving institution.

Equipment owned by the Federal government or other sponsors can be transferred to another institution when approved and directed by the sponsoring agency.  Researchers transferring to another institution may submit a request for the transfer of such property in the pursuit of continuing research.

A transfer request originated by a faculty member requires the advance approval of the appropriate department head, dean, the Executive Director of OSR, the Director of Asset Management and the sponsoring agency.

Agency-originated disposition or transfer instructions do not require such approval. However, if agency-directed or contemplated transfers are likely to impair continuing research or training projects at the University, such considerations should be promptly brought to the attention of the agency through OSR.

III. TRANSFER OF EQUIPMENT TO UNC-CHAPEL HILL

When new faculty members are transferring equipment to the University, the department should promptly advise Asset Management.

IV. TRANSFER OF UNIVERSITY PROPERTY

Property acquired or transferred to the University regarding research or training awards is owned by the State.  Therefore, disposition or transfer of such property is subject to University and State policies.

V. SALE OF PROPERTY

Proceeds from the sale of equipment purchased in whole or part from Federal funds should be credited to the Federal research project from which purchased was made or to an active award from that agency.

Reason for Standard

This operating standard assists University researchers supported by sponsored funding in determining the appropriate action with transfers, loans, or sales of capital equipment.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.10 – Travel

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Reimbursement of travel expenses is based on the allowability of the expenditure as determined by the terms and conditions of the award, in accordance with applicable regulations.

Travel expenses are usually considered allowable if authorized and in direct support of the project.  All travel reimbursements for University and non-University employees are subject to State, and University travel policies, except when the funder allows for higher rates or in cases when more restrictive policies and limitations are imposed by a specific award.

Federal travel regulations will apply when required by Federal contracts.  This includes, among others, adherence to the Fly America Act, which mandates the use of a U.S. flag air carrier for air travel related to projects supported by Federal funds.

Reason for Standard

The University offers this operating standard to provide clarification and guidance as to University practices regarding expenditure inquiries regarding travel, in conjunction with Federal regulations governing allowability.

Exclusions and Exceptions

State and Federal definitions of foreign travel sometimes differ.  The State of North Carolina considers all travel outside the contiguous 48 states to be foreign travel.  The Federal definition normally is less restrictive.

I. FOREIGN TRAVEL

To facilitate the review, justification, and approval of foreign travel requests, a copy of the meeting brochure or letter of invitation to travel must be attached to the request.

Some Federal agencies have delegated approval of foreign travel to the University.  The Office of Sponsored Research (OSR) can assist departments in identifying agency-specific requirements.

II. TRAVEL REQUIRING SPONOSR PRIOR APPROVAL

Foreign Travel
Failure to adhere to the approved itinerary can result in delayed reimbursement, pending the sponsor’s approval of the changed itinerary.  If the change is not approved, associated costs will not be reimbursed to the traveler. Additionally, U.S.-flagged air carriers should be used whenever possible.

Travel by individuals not paid from sponsored award funds.
Without an explanation on file to establish the individual’s involvement in and contribution to the project, the Federal auditors question the propriety of such travel.

Procedures and Related Policies

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.11 – Outgoing Subrecipient Agreements

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Subrecipients are collaborating institutions that participate on sponsored projects received by a different institution known as the Pass-through Entity. The University serves as the Pass-through Entity on all Outgoing Subrecipient Agreements. The working relationship between the Pass-through Entity and a collaborator is established through a formal agreement. This Subrecipient Agreement is legally binding and details the roles and responsibilities of both parties.

This differs from work with a contractor (vendors) who only provide goods or services. A Subrecipient completes work that influences a project programmatically for a significant portion of the work.

I. SUBRECIPIENTS VERSUS CONTRACTOR

Subrecipients have substantive, programmatic participation in a sponsored project. This is most easily identified by their involvement in designing, directing, and conducting the research as proposed. Subrecipient identifies a representative to manage the project at their institution and they are considered key personnel on the University’s project. They are given some flexibility to conduct their portion of the research.

Contractors, also known as vendors, are not directly involved with the scientific direction of the project. They are providing goods or services in a consistent manner for all of their business customers. There is also no independence in how they complete the activities being purchased.

II. REQUIREMENTS OF SUBRECIPIENT AGREEMENTS

Period of Performance
The Subrecipient Agreement must clearly state the period performance for the collaboration. Agreements are able to be issued for periods shorter than the project’s performance period as issued to the University by the sponsor. However, it cannot extend past the University’s performance period.

Terms and Conditions
Any agreement must include the requirements placed on the subrecipient by the sponsor or the University. The sponsor requirements applied to a project received by University regularly apply to the subrecipient.

Statement of Work
Subrecipient Agreements are required to have a detailed description of what work will be completed by the subrecipient institution. This includes details on tasks, scheduling, and how they will actively collaborate with the University.

Budget and Budget Justification
The University requires all Subrecipient Agreements to include a subrecipient budget detailing the amount of expenses and a budget justification that explains the necessity of those expenses. The subrecipient’s indirect cost rate agreement is also collected if applicable. These are used to determine the amount of funds that will be provided to the subrecipient under the Agreement.

Subrecipient Commitment Form
All subrecipients must complete a questionnaire that is used to assess the University’s risk in conducting work with the subrecipient. The document is used as the basis to begin subrecipient monitoring throughout the life of the Subrecipient Agreement.

Other Sponsor Requirements
Particular sponsors may require additional information for Subrecipient Agreements. It is important to always consult the University’s sponsored project, sponsor terms and conditions, and any other regulations that apply.

III. ISSUING SUBRECIPIENT AGREEMENTS

Subrecipient Agreements are created by the Office of Sponsored Research (OSR) in conjunction with the administrating department. Agreements are created using the relevant documentation identified by the administrating department. This is commonly the subrecipient information included in the proposal or what is revised at time of the award. A draft agreement is provided to the Subrecipient for review and execution, if there are no further changes needed. The partially executed agreement is returned to the University for signature. Once the agreement is fully executed, the subrecipient agreement is considered finalized and any internal financial setup is completed.

Reason for Standard

This standard is to establish the methods and means the University establishes Subrecipient Agreements. These agreements are legally binding and constitute the method to enforce the requirements of collaborative relationships with other institutions.

Roles and Responsibilities

 
PI
DA
OSR
Determine the need for a Subrecipient    
Identify and selection of Subrecipient
   
Collection of Subrecipient Documentation for Proposals and Agreements
Review of Subrecipient Documentation for Proposal and Agreements
Review eligibility of Subrecipient Institution and Project Personnel
Obtain Sponsor approval to work with Subrecipient
Administer creation through execution of a Subrecipient Agreement
Executes Subrecipient Agreements, Modifications, and Amendments
Monitoring programmatic activities of the Subrecipient
Monitoring the Subrecipient Expenditures
Approval of Subrecipient Invoices
Processing Subrecipient Invoices for Payment
Notifying OSR of any changes needed to the Subrecipient Agreement
Obtaining Subrecipient Documentation for Progress Reports
Issuing Modifications and Amendments to Subrecipient Agreements

Definitions

Subrecipient
A subrecipient is an institution that collaborates with the University to carry out part of a sponsored project. They may receive a legal agreement from the University to cover these duties or receive an award directly from the sponsor.

Contractor
An entity that receives a contract for the purposes of providing goods or services through their normal business operations on a competitive basis. These are ancillary to the operation of the sponsored project and do not involve programmatic input on how the project is conducted. This is sometimes referred to as a Vendor.

Pass-through Entity
The institution that provides a subrecipient agreement to another collaborating institution to complete a portion of a sponsored project. The University serves as the Pass-through Entity for Outgoing Subrecipient Agreements created by OSR.

Subaward
A type of subrecipient agreement issued under a Grant or Cooperative Agreement.

Subcontract
A type of subrecipient agreement issued under a Contract.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.12 – Consultants

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Consultant costs are permitted by the Federal government if budgeted in advance and supported by documentation of the essential nature of the service.  Also, the application must show such services will be obtained from the most qualified person at reasonable and normal rates.

It is essential to budget services and justify them in the proposal budget, as prior approval by the sponsoring agency is required before actual work can begin.

The University is exempt from requiring certain North Carolina approvals and State of North Carolina purchasing policies when expending contract and grant funds for instructional services, curriculum development or academically oriented research.  However, additional University policies and procedures regarding contractual services and purchasing still apply.

Department Administrators (DAs) are responsible for monitoring expenditures and collecting invoices from consultants for payment.  A written contractual agreement between the award administrating department and each consultant is strongly encouraged.  Principal Investigators (PIs) are required to review and sign each invoice to indicate approval of the expenditures before submitting the invoice for reimbursement.

CONSULTANT TRAVEL REIMBURSEMENTS

Consultants traveling on behalf of a research project are subject to University and State travel subsistence allowance limitations.  Professional fees and travel expenses may be combined in one payment to consultants, as long as the sponsor permits it and travel and associated allowances can be reasonably estimated.

However, separation of consultant travel allowances is necessary on the request for payment of an independent contractor to substantiate compliance with award limitations or guidelines for consulting fees.

Reason for Standard

This operating standard assists faculty and staff in ensuring that independent contractors conduct their portions of research projects in compliance with applicable regulations and their expenses are reasonable and allowable.

Exclusions and Exceptions

As independent contractors unaffiliated with the University, consultants are hired to provide specifically defined services on a given sponsored research project for a limited period.  University employees are not eligible to receive compensation as a “consultant” to a sponsored project conducted on behalf of the University.

Consultants differ from Service Agreements, which are products or services that indirectly support sponsored research without affecting its components.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.13 – Tuition Remission on Sponsored Projects

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

As with other salaries supported by sponsored funding, eligible graduate students of research project teams may be compensated with a partial tuition waiver based on the percentage of effort the individual will work on the project.  The tuition rates differ depending on the applicable graduate program.

In conjunction with 2 CFR §200.466, tuition remission and other forms of compensation may be allowable provided the individual’s participation in the research meets the applicable criteria. The Graduate School at the University provides Graduate Tuition Incentive Scholarships (GTIS) for eligible doctoral and masters students who receive external funding through sponsored research.

Reason for Standard

The purpose of this standard is to document the Federal and University requirements for tuition remission costs on sponsored projects.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.14 – Cash Advances

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The University can advance cash for activities related to a sponsored project utilizing unrestricted, University funds. Cash Advances are to be made only for business expenses incurred by or on behalf of an employee in their capacity as such.  The Cash Advance is reconciled to project funds once the cash has been utilized and the expenses are reviewed for allowability.  Advances are strictly limited to two types of activities: circumstances requiring cash payments of dollar amounts that are too small to justify the use of an imprest bank account and are intended for a one-time purpose and short periods of time; or, providing advanced funds to collaborating institutions unable to support a system of cost-reimbursement for payment.

These types of payments are only for business expenses incurred by or under the supervision of employees in their capacity of completing work on behalf of the University.  The request for a Cash Advance must be authorized by the Principal Investigator (PI) or their designee.  Examples of such types of expenses include study subject compensation, extended field work in remote locations, certain travel expenses, collaborating institutions requiring advanced payment, and other exceptional circumstances.

The Cash Advance process is owned by UNC Finance Division (Finance). However, any advances involving a sponsored project require additional oversight by the Office of Sponsored Research (OSR).  For policy on non-sponsored project Cash Advances, please see the Finance Policies and Procedures Manual.

Expectations of Cash Advance Management:

  • All advances for domestic use must be reconciled within 60 days after receipt of the advance.
  • All advances for foreign use must be reconciled within 90 days after receipt of the advance, unless required sooner for reporting purposes.
  • A project may only request a third advance if the other advances are in compliance with this policy.
  • Advances to a third-party institution or University foreign facility should not exceed two months of that institution’s operating cash required for the project.
  • Advances must be reconciled in a timely manner after the end date of the project as required by the reporting requirements of the agreement and OSR.

I. CASH ADVANCE REQUEST

Requests for a Cash Advance are created by selecting the appropriate transaction based on the method of payment.  Options include a voucher transaction and wire transfer.  A payment is then provided leveraging unrestricted, non-project resources.  The advance is made payable to an individual or institution and is considered a loan.

The requestor and the project’s PI are responsible for management of open Cash Advances.  All required documentation for the transaction must be submitted with the request.  Projects are limited to three open Cash Advances at a time.  Additional advances will only be approved once one of the three outstanding Cash Advances has been reconciled.

II. CASH ADVANCE RECONCILIATION

Reconciliation is the responsibility of the Departmental Administrator, PI, and the recipient of the Cash Advance.  Open advances are reconciled once the funds have been spent and the open advance had been reconciled in the University’s financial system.

The department submits documentation for the use of the cash, detailed receipt information for the expenses, and any other required documentation.  Any unspent cash is to be returned to the University during this process.  OSR reviews the documentation and transaction details to confirm that expenses meet all applicable regulations regarding allowability.  OSR Pre-Audit technicians provide the final approval for the reconciliation transaction.  If approved, the Cash Advance expenses are reconciled to the correct expense account, and the advance is closed.

Reason for Standard

Cash Advances are required to allow for business to be conducted in specific situations. It is necessary to determine the acceptable circumstances to use this process and the methods which they must be managed.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

02/28/2018       Revised operating standard to clarify reconciliation expectation of foreign advances and to allow for a third advance.
08/28/2017       Revised operating standard to clarify expectations of cash advance management, updated hyperlinks to Procedures and Related Policies, and Contacts.
01/06/2011       Revised operating standard to clarify authorization required by Principal Investigator.
05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.14 Procedure 1 – Cash Advance Requests & Reconciliation

Corresponding with:

Procedure Statement

This procedure details the steps to request and reconcile a Cash Advance related to a sponsored project. The UNC Finance Division’s Policies and Procedures Manual should be followed for requesting and reconciling cash advances for non-sponsored activities.

Expectations of Cash Advance Management:

  • All advances for domestic use must be reconciled within 60 days after receipt of the advance.
  • All advances for foreign use must be reconciled within 90 days after receipt of the advance unless required sooner for reporting purposes.
  • A project may only request a third advance if the other advances are in compliance with this policy.
  • Advances to a third-party institution or University foreign facility should not exceed two months of that institution’s operating cash required for the project.
  • Advances must be reconciled in a timely manner after the end date of the project as required by the reporting requirements of the agreement and OSR.

Forms and Instructions

REQUESTING A CASH ADVANCE

I. Transaction Creation

Create a Campus Voucher in ConnectCarolina Finance Menu > Accounts Payable > Vouchers > Add/Update > Campus Voucher Entry

Wire Transfers in Foreign Currency

II. Approval Process

  • Assigned OSR Pre-Audit Technician receives Cash Advance request
  • The request is reviewed for completeness and allowability on the project by the assigned Sponsored Project Specialist
  • OSR Pre-Audit Technician approves or rejects the request
    • The transaction will be subject to rejection without all required documents
  • If approved, the request is submitted to UNC Disbursement Services for approval and processing
    • For Foreign wires, the voucher is created by Accounting Services
  • Payment is submitted to the Cash Advance recipient by Accounting Services

RECONCILING A CASH ADVANCE

I. Transaction Creation

Create a Campus Journal in ConnectCarolina Finance Menu > UNC Campus > Campus Journals > Campus Journal Entry > Cash Advance Settlement

  • Create reconciling journal moving expenses from account code 559510 to the appropriate account code for the type of expense
  • Complete and attach the following documents to the journal transaction:
  • Mail all applicable documents (note: receipts, invoices, and or other expense documentation must be ORIGINAL) as listed on the Cover Sheet to OSR Pre-Audit
  • Submit journal for OSR Pre-Audit approval with sufficient time to meet reconciliation deadline

II. Approval Process

  • OSR Pre-Audit Technician reviews the journal documentation for completeness and allowability
    • The transaction will be subject to rejection without all required documents
  • OSR Pre-Audit Technician approves or rejects the reconciliation journal
  • If rejected the advance may be reconciled to non-sponsored funds

Revision History

02/28/2018       Revised operating standard to clarify reconciliation expectation of foreign advances and to allow for a third advance.
08/28/2017       Revised operating standard to clarify expectations of cash advance management, updated hyperlinks to Procedures and Related Policies, and Contacts.
01/06/2011       Revised operating standard to clarify authorization required by Principal Investigator.
05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.15 – Additional Non-Personnel Expenditures

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The following non-personnel expenditures, which are not all-inclusive and can be classified as either “direct” or “indirect” costs are described below:

I. OFFICE EQUIPMENT, MATERIALS, AND SUPPLIES

Office equipment, materials, and supplies that do not meet the criteria for capitalized equipment are allocated as Indirect (F&A) expenditures.

Examples of such costs include but are not limited to:

  • General Office Equipment (costing less than $5,000)
  • Office Supplies
  • Postage
  • Memberships
  • Computers

Grant and contract funds can be used to purchase appropriate lab, and project-specific research supplies delivered on or after the begin date and received sufficiently in advance of the end date of a project period.  Purchases made during the latter part of a project are subject to particular audit scrutiny and therefore require proof of sustainability from the viewpoints of relevance and usefulness to the project.

Supplies received following the budget end date of an award or contract is generally charged to a continuation award or another active project that requires and can effectively utilize the supplies.  If the usage and charges for such supplies cannot be legitimately absorbed by another active project or departmental budget, outstanding orders must be canceled to avoid the incurrence of a financial obligation not covered by an authorized budget.

II. RESEARCH PATIENT CARE COSTS

Research patient care costs are the routine and ancillary services provided by hospitals to individuals participating in research programs.  The costs of these services are normally assigned to specific research projects through the development and application of research patient care rates or amounts.

They exclude:

  • Otherwise allowable items of personal expense reimbursement, such as patient travel or subsistence, consulting physician fees, or any other direct payments related to all classes of individuals, including inpatients, outpatients, subjects, volunteers, and donors.
  • Costs of ancillary tests performed in facilities outside the hospital on a fee-for-service basis (for example, an independent, privately owned laboratory) or in an affiliated medical school/university based on an institutional fee schedule.
  • Data management or statistical analysis of clinical research results.

Reason for Standard

The University offers this operating standard to provide clarification and guidance as to University practices regarding expenditure inquiries about non-personnel issues in conjunction with Federal regulations governing allowability.

Exclusions and Exceptions

Because of the inconsistent nature of possible exclusions and exceptions, these are broached on an individual, case-by-case basis.  However, there are some general guidelines for specialized non-personnel costs listed below:

I. ALTERATIONS AND RENOVATIONS (Remodeling)

Such costs are authorized only for specialized facility requirements and exceptional cases, not for general-purpose space.

II. RENTAL SPACE

In some cases, a University department, school, or center may require rental space to house a sponsored project. If the rental space is within a ten-mile radius of the University campus, the rent is paid from F&A receipts, and the on-campus indirect cost rate applies.  If the rental space lies outside the ten-mile radius of the campus and is not owned by the University, the rent is included as a direct project charge, and the off-campus indirect cost rate applies.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.16 – Cost Accounting Standards Exemptions

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

In extremely exceptional circumstances, expenditures generally considered Indirect Costs (F&A) may be treated as direct costs under the directives of the University Cost Accounting Standards (CAS) Board Disclosure Statement (DS-2) and compliant with  2 CFR §200.420-475.

The Office of Sponsored Research (OSR) must grant prior written approval before encumbrances and expenditures may be claimed as direct charges to sponsored project accounts for items consistently reimbursed as F&A costs.  Such requests are considered only when overwhelming support is furnished.  OSR closely scrutinizes any justification provided to support the direct charging of costs that represent inconsistent treatment from that described in the University DS-2.

Exclusions and Exceptions

If a research program meets the criteria of a “major project” according to 2 CFR §200.413, direct charging of administrative or clerical staff salaries may be appropriate.

Reason for Standard

The purpose of this standard is to document Federal and University practice involving CAS exemptions.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.18 – Changes to Award Terms and Conditions

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Terms and conditions of an award can be adjusted with amendments, modifications, change orders, supplements, carryovers, or continuations of the agreement.  All adjustments must be approved by the University and in most cases, the sponsor.

Principal Investigators (PIs) do not have authority to make or execute changes or modifications in terms of contracts or grants and may not negotiate such changes without the prior knowledge and approval of the appropriate Sponsored Projects Specialist (SPS) in the Office of Sponsored Research (OSR).

Reason for Standard

This operating standard establishes the Office of Sponsored Research as the appointed authority in accepting and initiating changes to the terms and conditions of any research contract, grant, or cooperative agreement on behalf of the University.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.19 – Budget Revisions

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Budget revisions for sponsored awards must be approved by the sponsoring agency, provided for either through budget revision provisions in the terms and conditions of the award notification or by agency approval of a budget revision request coordinated through OSR.

Budget revisions are to be based upon the financial plan and cost trends for the designated award budget period. To the extent possible, budget revisions must reflect all necessary reallocations of resources foreseeable to the end of the budget period.

Because the University is legally bound to operate within the terms and conditions of each award accepted by the Office of Sponsored Research (OSR) on its behalf, the following actions must be taken prior to submitting a budget revision:

  1. Review of the award notification is imperative prior to submitting a budget revision, as it specifies restrictions on budget revisions.
  2. Review of restriction codes to the award account. Restriction codes, which indicate the types of allowable budget revisions for the applicable award account, are based on the award terms and conditions. They are applied to the account when it is first established in the University’s Financial Reporting System (FRS).
  3. Preparation of a written request for permission to make a budget revision that is currently restricted in FRS or differs from those presented in the award notification. Written requests for such revisions must be signed by the Principal Investigator (PI) and submitted to the Pre-Audit Department in OSR. OSR is the sole designee that may officially accept approvals from a sponsoring agency on behalf of the University. Receipt of approval of budget revisions must be made to OSR before revisions can be completed.

The Pre-Audit Department of OSR requires a minimum of three (3) business days to process budget revisions that do not require prior sponsor approval. Sponsor-approved budget revision requests often require a longer processing period unrelated to actions taken in OSR. Thus, PIs and DAs are encouraged to complete requests in a timely manner.

Reason for Standard

This policy defines and emphasizes the actions necessary for completing budget revisions to sponsored accounts.

Exclusions and Exceptions

  1. The transfer of funds between award accounts is strictly prohibited.
  2. Revisions solely for the purpose of coping with near-term problems (e.g., a $35.00 overdraft in the supplies category) should be avoided. If resources in all categories are already substantially committed to known requirements, a budget revision can only serve to defer and likely complicate, not resolve, a financial problem. In such cases, reduction of the project scope and effort may be the only viable solution.
  3. Under the Federal Demonstration Partnership (FDP), the National Science Foundation (NSF), the National Endowment for the Humanities (NEH) and the National Institutes of Health (NIH) have delegated prior budget revision approval authority to certain grant recipients.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.20 – Cost Transfers

Responsible Officer: Director
Responsible Unit: Cost Analysis and Compliance
Effective date: July 1, 2008
Last revised on: May 15, 2018

Background

The University has stewardship responsibility for all sponsored funds, and proper management of sponsored project expenditures is essential to meet this obligation. The University recognizes that cost transfers may be necessary to correct bookkeeping or clerical errors and to allocate closely related work that may support more than one project.

Frequent, late, and inadequately explained transfers, raise serious questions about the propriety of the transfers and call internal fiduciary controls into question. This is especially the case with such transfers that involve projects with cost overruns or unexpended balances. These activities may result in audit disallowances and monetary paybacks, including penalties and fines.

The University is committed to ensuring that all cost transfers, including labor distribution adjustments and non-salary journal entries, are appropriate and conducted in accordance with sponsor terms and conditions, Federal regulations and University policy. The following is the operating standard regarding cost transfers associated with sponsored projects.

Operating Statement

Timeframes for Cost Transfers:

  • Non-Salary cost transfers: must be prepared and submitted within 90 days from the date the transaction is charged to the project.
  • Salary cost transfers: related to the effort certification process must be prepared and submitted within 30 days after the end of the effort certification period to reconcile the salary expenditures to the individual’s certified effort.

University policy does not supersede sponsors’ policies that require a shorter period for cost transfers and or corrections to effort.

  • The Office of Sponsored Research (OSR) expects that all costs directly charged to Federally sponsored awards will comply with the cost principles outlined in Uniform Guidance 2 CFR Part §200, Subpart E.
  • Cost transfers are allowable only where there is a direct benefit to the project being charged. Under no circumstances is it acceptable for a cost to be charged to a project that it does not benefit. This practice is inconsistent with applicable cost principles and will result in improper financial reporting and inappropriate reimbursement from the sponsor.
  • All Principal Investigators (PIs) and their Department Administrator (DAs) are responsible for ensuring that cost transfers to correct errors on sponsored projects are made within the timeframes outlined in this operating standard.
  • Any cost transfers submitted after the applicable time frame identified in this operating standard will require review by OSR. Approval for such cost transfers will be granted only under extenuating circumstances.  Additional documentation and justification must accompany a cost transfer request outside the applicable period.
  • Cost transfers to remove charges that do not meet the cost principles outlined in Uniform Guidance 2 CFR Part §200, Subpart E must be completed regardless of timeframe.
  • Cost transfers must be supported by documentation which contains a justification of why the error occurred, how the expense relates to the project being charged, and a plan to prevent similar errors in the future.
  • Cost transfers are not to be used as a means of award management.

Roles and Responsibilities

PIs and Delegated Authorized Personnel Responsibility:

  • Reviewing and reconciling sponsored projects on a regular basis (at least monthly) to ensure that all expenditures are correct and appropriate
  • Managing projects effectively to minimize the need for cost transfers
  • Submitting and approving cost transfers in compliance with this operating standard and associated procedures
  • Retaining all supporting documentation of the cost transfer in accordance with applicable record retention requirements
  • Ensuring that all personnel engaged in the financial administration of Federally funded projects are familiar with this operating standard and procedure

OSR Responsibility:

  • Developing and implementing cost transfer procedures in accordance with Federal regulations
  • Assisting in interpretation and implementation of this operating standard
  • Providing training to campus on this operating standard
  • Providing final approval for cost transfers greater than 90 days from the accounting date of the original transaction
  • Periodically reviewing cost transfers to ensure compliance with University and Federal regulations

Internal Audit Responsibility:

  • Independently evaluating compliance with this operating standard and associated cost transfer procedures

Definitions

Allocable: Costs that benefit the award charged. Costs shared by more than one project should be allocated in proportions that can be approximated with a high degree of accuracy through actual use.

Allowable: Costs allowable under the terms and conditions of the award, including the authorized budget and applicable regulations.

Consistent: Application of the cost is given consistent treatment within established University policies and procedures; costs for the same purpose are treated and classified the same way under like circumstances.

Cost transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project within a 90-calendar day period from the original accounting date.

Late cost transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project greater than 90 calendar days from the original accounting date.

Original Charge: The first posting of a cost to the general ledger.

Reasonable: The nature of the goods or services acquired, and the amount paid to reflect the action that a prudent person would have taken at the time the decision to incur the cost was made.

Reason for Standard

The purpose of this standard is to provide guidance on the treatment of cost transfers and document Federal and University expectations.

Procedures and Related Operating Standards

Operating Standard 500.20 Procedure 1 – Creating Justification for Cost Transfers

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

12/1/2017         Revised operating standard to clarify expectations on timely cost transfers 05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.20 Procedure 1 – Creating Justification for Cost Transfers

Corresponding with:

Procedure Statement

The following cost transfer procedures have been established to comply with the requirements of OMB Uniform Guidance, 2 CFR Part §200, Subpart E, the National Institute of Health (NIH) Grants Policy Statement, and the requirements of other Federal sponsors.

Operating Standard Reminders – Timeframes for Cost Transfers:

  • Non-Salary cost transfers: must be prepared and submitted within 90 days from the date the transaction is charged to the project.
  • Salary cost transfers: related to the effort certification process must be prepared and submitted within 30 days after the end of the effort certification period to reconcile the salary expenditures to the individual’s certified effort.

University policy does not supersede sponsors’ policies that require a shorter period for cost transfers and or corrections to effort.

Forms and Instructions

I. Cost Transfers within the 90 Day Time Period

For cost transfers initiated within the 90-day period, a journal entry must be submitted with justification to include the following:

  • A detailed explanation of the reason for the transfer; explanations such as “to correct an error” or “to transfer to correct project” are not adequate.
  • An explanation of the allocation of the cost if only a portion of the original cost is being transferred.
  • Why the charge(s) are allowable, allocable, consistent, and reasonable, based on the terms and conditions of the project being charged

Adequate documentation related to the transfer and original expense must be attached to the journal and kept on file within the department until the applicable record retention requirement has been satisfied.

II. Cost Transfer after the 90 Day Time Period

For cost transfers initiated outside of the 90-day period, additional justification must accompany transfer requests to include the following:

  • Why the original expenditure did not charge appropriately·
  • How this expense benefits the project being charged
  • Why the charge(s) are allowable, allocable, consistent, and reasonable, based on the terms and conditions of the project being charged
  • Why this cost transfer is being requested more than 90 days after the original transaction date·
  • The steps that will be taken to prevent this type of error from happening in the future

Adequate documentation related to the transfer and original expense must be attached to the journal and kept on file within the department until the applicable record retention requirement has been satisfied.

Cost Transfer Examples

ALLOWABLE UNALLOWABLE
  • Transferring Preaward costs from a University fund to the sponsored project, if Preaward spending is allowable per the sponsor guidelines
  • Correcting clerical errors, transpositions, or mistyped entries
  • Reallocating costs originally charged to a central administrative location, or when multiple projects benefit
  • Reallocating salary expenses to match effort distributions
  • Transfers for purposes of fiscal expediency without regard to whether the cost is appropriate on the receiving project (g., reallocation of expenses from a project in deficit to a project with unexpended funds to clear the account in deficit)
  • Transfer of post-term expenses to another project
  • Transfer of an expense that was previously transferred

Revision History

12/1/2017         Revised procedure to align with updates made to the related operating standard. 05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.21 – Carryover of Unobligated Balances

Responsible Officer: Director
Responsible Unit: Research Administration
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Sponsored research funds are subject to numerous variables that can affect financial reporting accuracy and subsequently, full recovery of research expenditure costs.  It is essential for Principal Investigators (PIs) and Departmental Administrators (DAs) to carefully consider these variables when determining financial expenditures and discuss inquiries about them with the Office of Sponsored Research (OSR).

I. CARRYOVER

Carryover funds are not automatically added to the total amount budgeted for the subsequent year.  Therefore, it is imperative that PIs and DAs familiarize themselves with the nuances of the carryover process to accurately monitor and report expenditures.

A formal request for carryover of unspent funds from one funding period to the next must be made via OSR and requires approval from the sponsor.  Requests for carryover must also be made for awards under the Federal Demonstration Partnership (FDP).  Since carryover is specific to each awarding agency and is addressed in the award terms and conditions, inquiries regarding carryover must be made to the appropriate Sponsored Projects Specialist (SPS) in OSR.

II. APPLYING SPLIT F&A RATES

When there is a change in the Federally-negotiated F&A rates, OSR implements a timeline for bridging old F&A rates to current F&A rates, depending on the official start date of a given award.  When working with award expenditures, this timeline serves as the foremost guide in determining the applicable F&A rate.  This also applies when planning new proposal budgets.

III. FRINGE BENEFITS RATES

Fringe Benefit rates are reviewed and adjusted annually.  It is important that DAs remain aware of annual rate adjustments applicable to awards under their administration.

Reason for Standard

Careful consideration of reporting variables combined with scrupulous accounting practices is necessary to safeguard the University’s integrity and provide maximum recovery of F&A costs.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.22 – Unallowable Expenditures and Overdrafts

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Principal Investigators (PIs) and Departmental Administrators (DAs) are responsible for tracking expenditures to prevent unallowable expenditures and overdrafts on sponsored projects.  PIs and DAs must immediately resolve unallowable expenses and cost overdrafts as soon as they are identified.  These expenses will not be billed to the sponsor and must be removed from the project.

The Office of Sponsored Research (OSR) monitors sponsored projects to ensure resolution of unallowable expenditures and overdrafts in conjunction with the administrating department.  If the unallowable expenses and overdrafts are not removed within the timeframe indicated in OSR’s communication, the expenses will be charged to the administrating department’s unrestricted chartfield string.

Roles and Responsibilities

PI AND DA RESPONSIBILITIES:

  • Reviewing and reconciling sponsored projects on a monthly basis to ensure that all expenditures are correct and appropriate
  • The PI is responsible for authorizing direct charges in accordance with Uniform Guidance 2 CFR §200.413 and applicable funding agency guidelines
  • The DA is responsible for removing all unallowable expenses or correcting overdrafts immediately

OSR RESPONSIBILITIES:

  • Managing regulatory compliance with Federal, University, and sponsor guidelines
  • Maintenance of individual Project IDs for sponsored projects
  • Review of transactions on sponsored funds
  • Removing any unallowable or overdraft charges from a sponsored project if not completed by the department

Definitions

Expenditures:
All charges made to a sponsored project.

Unallowable:
Expenditures that do not meet the Cost Principles and are not able to be charged to a sponsor based on applicable Federal, Sponsor, or University regulations.

Overdraft:
All charges more than the obligated funds provided by the sponsor; a negative balance.

Reason for Standard

The University must adhere to Federal, State, and University guidelines regarding financial oversight of sponsored projects to receive funding.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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500.22 Procedure 1 – Unallowable Expenditures & Overdrafts

Corresponding with:

Procedure Statement

After the Office of Sponsored Research (OSR) notifies the department of unallowable costs or an overdraft on a sponsored project, the department will be given an opportunity to resolve the issue before expenditures are moved to the administering department’s unrestricted chartfield string.

Forms and Instructions

I. TRANSACTION CREATION

Create a Campus Journal in ConnectCarolina Finance Menu > UNC Campus > Campus Journals > Campus Journal Entry > Correcting JE

  • Create a journal moving expenses off the project chartfield string and onto unrestricted departmental funds. Unallowable costs may not be transferred from one sponsored project to another sponsored project.
  • Complete and attach the following documents to the transaction:
    • OSR communication requesting charges be moved off the project

II. APPROVAL PROCESS

  • OSR Pre-Audit Technician reviews the journal documentation for completeness and allowability

III. UNTIMELY CORRECTIONS

  • OSR processes a journal moving expenses off the project and onto unrestricted departmental funds.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Reporting

600.1 – Reporting Overview

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The University is mandated to comply promptly with Federal, State, and sponsor reporting regulations regarding programmatic, regulatory, fiscal, personnel and property stewardship requirements of sponsored research as established in 2 CFR Subpart D.

The Office of Sponsored Research (OSR) works in partnership with Principal Investigators (PIs) and Departmental Administrators (DAs) to provide accurate, timely reports to sponsors.  To that end, OSR monitors reporting requirements and other deadlines to ensure compliance to the terms and conditions of the award and to provide a continuous exchange of accurate, current information among the University, the PI and the sponsoring agency.

PIs and DAs play a critical role in keeping the University in good standing with sponsors by maintaining day-to-day financial and technical information essential for accurate reporting.

Reporting compliance falls into three basic categories:

  • Project Performance Reports
  • Financial Status Reports
  • Effort Reporting

In addition to these elements, final reporting on property stewardship and technology transfer/intellectual property may also be required.  The frequency of performance and financial reports are determined by the sponsor and is specified in the terms and conditions of the award or contract.

Reporting increment outline:

  • Interim reports for smaller increments within a longer budget period (monthly, quarterly, or semi-annual reports)
  • Annual reports covering a 12-month period
  • Final reports prepared at the end of project funding
  • Effort reports prepared every two pay periods for SPA personnel and quarterly for EPA personnel

Record retention requirements of 2 CFR §200.333 state that financial records, supporting documents and any other records pertinent to the award must be retained for three (3) years from the submission date of the report, regardless if it is an interim or a final report.

I. PROJECT PERFORMANCE REPORTS

These programmatic or technical reports are prepared by the PI and contain a comparison of actual accomplishments to established goals, the findings of the project, and any other pertinent information regarding the research for the period being reported.

In accordance with 2 CFR §200.328 Performance Reporting Requirements, the following guidelines apply to the frequency of reporting unless otherwise stated in the terms and conditions:

  • If significant developments that impact the performance of the award occur, a report must immediately be submitted to the funding agency
  • If the funding agency requires quarterly or semi-annual reports, the reports must be submitted to the agency within 30 days after the reporting period end-date
  • If the funding agency requires an annual report, it must be submitted to the agency within 90 calendar days after the grant year end-date
  • The final report is due to the agency within 90 calendar days after the date of award termination

I. FINANCIAL STATUS REPORTS

The sponsor’s financial reporting requirements and frequency will also be spelled out in the award terms and conditions.  Typically, these reports include a summary of program expenditures during a stated period.  For every financial report (interim, annual, and final), OSR relies on award data in ConnectCarolina and information provided by the PI and DA.  Therefore, the awarding department must work closely with OSR to provide expenditure data that meets the requirements of the sponsor.

In accordance with 2 CFR §200.327 Financial Reporting Requirements, OSR prepares financial reports according to specific guidelines as determined by the awarding agency.  The awarding agency will also prescribe whether reporting will be based on a cash or accrual basis as well as the frequency of reporting.  The reports must be submitted to the agency within 30 days after the specified reporting period.  Annual and final financial reports must be submitted within 90 calendar days from the award budget end date.

III. EFFORT REPORTING

Effort reports are prepared by the department and submitted to OSR for approval and processing.  University employees are mandated by Federal regulations to report the official effort they expend on sponsored research activities in compliance with 2 CFR §200.430.  These reports are based on the total percentage of time applied to a given sponsored research project, independent of the notion of a finite work week (i.e., a 40-hour work week).

Reason for Standard

Timely compliance to reporting requirements sustains the University’s integrity in research, maintains continuity of sponsor support, prevents the threat of debarment to the University research community, and protects the University-Sponsor-Research Team relationship from being compromised.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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600.2 – OSR Financial Reporting

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The Office of Sponsored Research (OSR) prepares and submits official financial reports to the sponsor on behalf of the University and the Principal Investigator (PI).  This includes:

  • Monitoring sponsor reporting requirements in compliance with  2 CFR §200 Subpart D
  • Depositing checks and initiating drawdowns for all sponsored research accounts
  • Preparing invoices and financial reports of expenditures to sponsor agencies
  • Serving as the University’s liaison with agencies and auditors on financial matters in accordance with Federal regulations provided in 2 CFR §200 Subpart F

PIs and Departmental Administrators (DAs) provide OSR with the current, accurate financial information necessary to complete financial reports.  OSR provides access to submitted reports to each administering department.

Reason for Standard

Financial reporting is significantly important to assist the University in avoiding non-compliance issues.
This operating standard defines the responsibilities of the Office of Sponsored Research in partnership with the PIs, DAs and sponsoring agencies, and cultivating positive relationships with sponsors for continued support for research at the University.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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600.3 – PI & DA Financial Reporting Responsibilities

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The Principal Investigator (PI) is responsible for submitting programmatic reports by the deadlines established in the award agreement or contract, providing an explanation of the research progress, a summary of results, any publications stemming from the research, and other pertinent information, including an explanation of cost overruns or high unit costs.

Also, the PI provides information about program performance to the Office of Sponsored Research (OSR) when it is needed for preparation of financial reports to the sponsor.

PIs and Departmental Administrators (DAs) must establish reliable departmental accounting practices for day-to-day financial monitoring of sponsored research projects in compliance to Federal regulations established in 2 CFR §200 Subpart E. The award document terms and conditions detail the financial data that must be reported.  The department establishes a tracking system (also known as a “shadow system”) that reflects the sponsor’s requirements at the onset of the award.

The DA is responsible for performing a monthly comparison of the department’s records to the University records in ConnectCarolina and monitoring items that are not reflected there.  Since the data reported in ConnectCarolina serves as the basis for financial reporting to the sponsor, it is critical that the department maintain current and accurate records.  As a general rule, expenses should be incurred immediately, and on a regular basis once a Project ID is assigned to a project.  This practice helps to ensure that expenses align with the progress of the project, therefore providing an accurate report to the sponsor.

PIs and DAs are also responsible for tracking cost sharing commitments as well as effort reporting using the University’s Effort Certification and Reporting Technology system (ecrt).  They also oversee subrecipient accounts and activities to ensure compliance and timely reporting as established in the award terms and conditions.

Reason for Standard

This operating standard describes general responsibilities for PIs and DAs in maintaining essential data for reporting requirements.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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600.4 – Sponsored Project Expenditures Accounting

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Since sponsored research utilizes funds belonging to organizations other than the University, the Office of Sponsored Research (OSR) and the administering department work in tandem to provide fully-defined financial information to the sponsoring agency for all required financial reports.
Departments are expected to stridently follow the terms and conditions of the award when spending and recording expenditures.  For reporting purposes, the following general standards apply:

  • All expenditures must follow the protocols for direct and indirect costs as established 2 CFR §200 Subpart E
  • Each line item must be described precisely to ensure funds are being expended properly.  This is a requirement of the final report at closeout and is best practiced throughout the life of the project by use of a shadow system.
  • No spending is allowable after the end date of an award period.  Expenditures must occur within the assigned project period.
  • The amount of funding for an established award is finite; thus, overspending a project is unacceptable.

Financial reports are reviewed by OSR and sponsoring agencies for consistent spending behavior throughout the life of a project.  Irregularities in spending habits are susceptible to questioning.  To avoid the appearance of erratic or improper spending, it is critical that departments begin incurring expenses immediately and on a regular basis, once a Project ID is assigned to a project.

Also, departments are responsible for maintaining and tracking current financial data in ConnectCarolina and also for items that do not yet appear in the system.  This includes maintaining accurate job titles, expensing to the correct categories for specific supplies and coordinating accurate personnel forms, including the number of hours worked.

OSR is responsible for preparing and submitting financial reports when they are due to the sponsor on behalf of the PI by utilizing the financial information tracked by the department.  OSR submits financial reports to the sponsor and makes these reports available to the administering department.

Reason for Standard

An awareness of the co-dependent relationship between departments and the Office of Sponsored Research underscores the significant impact each has in producing accurate, timely reports to sponsors, and helps maximize expenditures efficiently.  Also, this operating standard provides common protocols for maintaining sponsored award accounts that uphold the integrity of research at the University.

Exclusions and Exceptions

  • Overdrafts are unallowable on sponsored award accounts.  In such cases, the administering department will be required to pay for overdrafts from departmental accounts.
  • Program income, the gross revenue earned from sponsored activities, which is borne as a direct cost toward meeting cost sharing or matching requirements, must be disclosed following specific agency requirements on periodical and final financial reports.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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600.5 – Effort Reporting

Responsible Officer: Director
Responsible Unit: Cost Analysis and Compliance
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

As a recipient of Federal funding, the University is required to comply with 2 CFR §200 Subpart F requirements for certifying time spent working on sponsored projects.  Therefore, University faculty and staff must comply with this operating standard.  Employees must certify effort if any portion of his or her compensation is paid from a sponsored project or committed cost-share relates to a sponsored project.  Failure to comply with this operating standard may result in suspension of proposal submission privileges for the Principal Investigator (PI); material non-compliance, which includes but is not limited to, refusal to complete effort reports and consistent inaccuracies in time allocation, and may result in the need to suspend work on sponsored projects.  Non-compliance may also lead to other disciplinary actions in accordance with University policies.

Reason for Standard

2 CFR §200 Subpart F contains regulatory requirements for acceptable methods of certifying time worked on sponsored projects.  The University utilizes the electronic Effort Certification and Reporting Technology (ecrt) system for employees having sponsored or cost sharing salary sources from sponsored sources.  Effort reporting documents the proportion of time an eligible individual spends on all University activities as a percent of total effort.

The University utilizes ecrt as an after-the-fact reporting system for employees to certify that their salary distribution, including salaries charged or cost-shared to sponsored projects, are reasonable and consistent with the work performed.  The individual’s effort is identified to specific cost centers in the payroll system based on anticipated activities.  Effort is certified by the employee at the end of specified reporting periods.  In rare cases when an employee is unable to certify his or her own effort due to extenuating circumstances (such as termination, protracted illness or no reasonable access to the University email system), a responsible official that has suitable means of verification that the work was performed by the employee may certify.  Any significant differences between the actual work performed and the salary distribution must be documented on the effort report and the individual’s payroll distribution must be adjusted accordingly.

An effort certification should be a reasonable estimate of how time is spent.  2 CFR §200.430 states, “It is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting.  When recording salaries and wages charged to Federal awards for IHEs, a precise assessment of factors that contribute to costs is therefore not always feasible, nor is it expected.”

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

03/14/2011       Operating standard and Procedure revised to correspond to on-line ecrt system
07/31/2010       Operating standard and Procedure revised to clarify the institution’s anticipated transition to a planned confirmation system.
12/15/2009       Operating standard and Procedure revised to reflect the development of new effort reporting system standards.
05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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600.5 Procedure 1 – Certifying Effort

Corresponding with:

Procedure Statement

PAYROLL VS. EFFORT DISTRIBUTIONS

A payroll distribution reflects the activities to which salary is charged in the payroll system. The ecrt system uses actual payroll charges as the basis for the certification. The final certified effort distribution should reflect an individual’s actual activity regardless of where or how the salary is charged. If the salary distribution and the actual activity are not congruent, the salary distribution in the payroll system must be changed during the certification process.

WHO IS SUBJECT TO EFFORT REPORTING?

Faculty, staff (including postdocs) and students who receive compensation from sponsored projects are subject to effort certification. Individuals receiving stipend payments charged to account code 568700 under National Research Service Awards (NRSA) are not subject to effort reporting procedures.

Reportable Activities on Effort Certification Reports

  • Institutional effort relates to work required to meet an individual’s employment obligation to the University and may include both sponsored and non-sponsored activity. Institutional effort does not include external consulting.
  • Non-Institutional effort is performed outside the context of the individual’s University employment contract. Non-institutional effort is not a part of Institutional effort and is not documented by the system. Employees who perform non-institutional activities for pay must observe required procedures for external professional activities for pay and conflict of interest. The Conflict of Interest Officer may be reached at 919-843-5328.

PERCENT EFFORT

Effort is measured as a percent of the individual’s total University employment obligation. Percent effort represents the proportion of time an individual spends on each University activity and is expressed as a percent of the individual’s total University activity. Total University activity = 100% effort.

The percent effort is not based on a typical 40-hour workweek. Total University effort for an individual is 100% regardless of the total hours worked. Total effort must equal 100% and should include only those activities for which an individual receives University compensation, including work performed on sponsored projects, whether reimbursed by a sponsor or University. An individual may not report effort that is less than or in excess of 100% (with a +/- 0.5% rounding variance allowed).

EFFORT REPORTING STANDARDS

  • The institutional effort reporting system will reflect only the activity for which the employee receives University compensation and will include all actions required to fulfill the employee’s University obligations.
  • The system must be inclusive of all University effort, including sponsored and non-sponsored activities.
  • The individual’s effort for each activity will be expressed as a percent of 100% total effort. The salary distribution should be modified on a timely basis by the appropriate departmental personnel when there is a significant change in anticipated workload.
  • Professorial and professional staff will certify a statement every six months, using appropriate means of verification that the work was performed, ensuring that charges are reasonable in relation to the work performed. Effort reports for other employees will be prepared quarterly.
  • The system is subject to independent internal evaluations on an ongoing basis to ensure effectiveness and compliance with Federal standards.

EFFORT REPORTING CATEGORIES

Personnel with effort reporting administrative (ecrt effort coordinators) and certification (ecrt certifiers) responsibilities should be familiar with 2 CFR Subpart E definitions of types of effort. Effort categories are divided into two major groups, sponsored (extramural sponsor funded) and non-sponsored (University funded).

  • Sponsored Project Effort includes activities paid by sponsored research, sponsored instruction and training, Federal and commercial clinical trials and all other sponsored projects including cost sharing committed to sponsored projects. The system identifies each sponsored project separately with the commensurate percent effort. Cost sharing activities must be identified with a separate percent to the sponsored project they support. Cost sharing is effort associated with an identifiable sponsored agreement which is not reimbursed by the sponsor and is funded by the University. Sponsored project effort does not include activities funded by start-up funds or general department research funded from non-sponsored sources.
  • Non-Sponsored Project Effort (University funded) includes all University activity that is funded by non-sponsored operating and discretionary accounts, such as activities related to instruction, departmental research, department administration and other institutional activities.
    • Department Administration refers to administrative activities in academic dean’s offices, departments divisions, and organized research units that jointly benefit all department activities. Department administration is supported by University funds and is not charged directly to sponsored projects. Examples include: time on academic and research committees, such as human subject review, bio-safety, animal care, and academic planning, administering personnel policies, interviewing and hiring, planning programs and preparing sponsored proposals.
    • Non-sponsored instruction and other academic activity relates to the University’s teaching and training mission. Non-sponsored instruction includes university funded teaching and training activity, whether for credit or not, lectures, independent study, thesis preparation supervision, academic advising, curriculum development, seminar/workshop lecture presentations, and non-sponsored research and scholarly activities.
    • Non-sponsored clinical activity refers to the treatment of clinical patients and the delivery of clinical services in a patient-care environment. Clinical activity includes teaching or supervising residents, interns, and clinical personnel when such non-sponsored teaching effort does not properly belong in the Instruction category. Clinical activity also includes administrative and support services that solely benefit clinical patient care. Non-sponsored clinical activity excludes Federal and commercial clinical trials sponsored agreements.
    • Other Institutional Activity relates to University activities that are not classified under any other category. Examples include: institutional advancement, service centers, alumni relations, athletics, museums, auxiliary services, theatres and concerts.

AUTHORIZED SIGNERS

The following individuals are authorized to certify employee effort.

  • EHRA and SHRA (including students and post docs) employees certify their individual effort.
  • In the ecrt system authorized signers are referred to as “certifiers.”
  • In the event extenuating circumstances make it impossible for an employee/certifier to certify his or her individual effort, the PI or other responsible official with first-hand knowledge or suitable means of verification that the work was completed must certify on behalf of the unavailable employee.

SIGNIFICANT CHANGES IN EFFORT

When comparing an employee’s activities to his or her payroll distribution charges, differences may be noted. Payroll action adjustments are required when there is a significant change in activity from the current pay distribution. Changes in salary sources should be made on a timely basis and include the following circumstances:

  • A sponsored project expires, continues under another account number or a new project is awarded.
  • The degree of effort an individual expends on a particular activity changes.
  • The individual experiences a prolonged sick leave, compensation base change, status change, or leave with or without pay.

Significant changes to an effort distribution must be recorded in the payroll system. If a significant change is indicated on the effort report, the department must initiate the appropriate payroll action, and should attach a copy of the action with an effort note to the ecrt system. All significant retroactive changes indicated and certified on the effort report are therefore appropriately updated in the payroll system.

Retroactive adjustments initiated more than 90 days after the effective date and retroactive adjustments approved subsequent to the certification due date must have an Office of Sponsored Research (OSR) approved letter of justification attached to the restated effort certification. In addition, retroactive adjustments must conform to the OSR cost transfer policy.

EFFORT CERTIFICATION PROCESS

Effort reports are generated after the payroll information is processed for the applicable reporting period. By the initial routing to designated departmental personnel, department Effort Coordinators (EC) are provided the opportunity to review and edit the reports during a pre-certification period. When this review is complete and the certification period begins, ecrt releases the reports to the authorized signers for certification.

After review, adjustments are made by the certifier to enter any significant changes in the certified effort column; the individual certifies and attests the effort card and ecrt routes the report to the Primary Effort Coordinator (PEC).

After certification, the PEC reviews the certifications and if accepted, processes certified effort reports on behalf of the department. The PEC may review the changes with the certifier. When final certification indicates a significant variance between certified and calculated effort, department management must ensure the appropriate payroll action is processed so the changes are updated in the payroll system.

A copy of the payroll action (along with an effort note) that causes payroll to match to the significant certified changes should be attached to the certified effort card in ecrt and processed by the PEC to meet the deadline shown on the report. Typically, certification and departmental processing should be completed within 30 days of the initial report distribution.

EFFORT REPORTING PERIODS AND CERTIFICATION DUE DATES

EHRA employee effort reports are certified twice a year, in 6-month cycles. The periods of performance and pay cycles for EHRA employees occur as follows:

Period of Performance Pay Cycle Dates
First Half of Fiscal Year
M01-M06
7/1 – 12/31
Second Half of Fiscal Year
M07-M12
1/1/ – 6/30

SHRA employee effort reports are certified 4 times a year (quarterly). The periods of performances and pay cycles follow the UNC bi-weekly pay schedule as follows:

Period of Performance Pay Cycle Number of Paychecks
First Quarter – Fiscal Year
B01-B06
6
Second Quarter – Fiscal Year
B07-B13
7
Third Quarter – Fiscal Year
B14-B19
6
Fourth Quarter – Fiscal Year
B20-B26
7

The current fiscal year SPA bi-weekly pay schedule can be accessed from the Helpful Links provided on the ecrt Home Page.  Effort reporting pre-certification periods typically last for approximately two weeks.  At least one payroll cycle subsequent to the final period of performance must post to payroll before the pre-certification period begins.

The certification period typically lasts approximately 30 days and commences immediately after the pre-certification period ends.  Effort cards should be properly certified and processed during the certification period.

COMPLETING CERTIFICATION

  • OSR ensures that complete and accurate effort reports are prepared and distributed.
  • Departmental Effort Coordinators review the reports, make adjustments if necessary, and release the report to the authorized signer for certification. Departmental PEC process certified reports on behalf of the department.
  • Authorized certifiers review salary distributions, make adjustments if necessary, and certify the effort. EPA and SPA employees (including students and post docs) certify his or her individual effort. In unusual cases a responsible official may sign the certification in lieu of the individual. When the certification is complete, ecrt routes the effort report to the departmental PEC for final review, acceptance and processing on behalf of the department.
  • The PEC performs a post review of the certification. If significant changes were made department management must ensure a payroll action is processed that adjusts the payroll distribution to the certified effort. A copy of the action and an effort note should be attached to the certified effort card and processed with the certified effort report by the certification deadline.
  • OSR reviews certifications and will contact the PEC if policy deviations or processing problems are noted.

SYSTEM CONTROLS

Internal Controls and Responsibilities

Effort reporting distribution totals from ecrt are created based on salary and wage distributions from the payroll system. Prospective and retroactive changes are made using the appropriate HR payroll action management system. Changes must be made on a timely basis in accordance with the University Cost Transfer Policy.

Responsibility for continued maintenance and operation of the various controls rests with specific offices:

Office of Sponsored Research

  • Ensuring the ecrt system is operating properly and effort reports are distributed in a timely manner.
  • Ensuring effort reports include all effort-eligible pay sources and are prepared correctly.
  • Reviewing certifications and verifying that payroll records are modified when a significant change in certified effort has been noted on the effort report.
  • Monitoring and administrating ecrt in accordance with provisions of 2 CFR Subpart E.
  • Training OSR and departmental staff in effort reporting requirements, processes and ecrt reporting capabilities; providing ecrt access and reporting capability to campus units.
  • Investigating non-respondents and other policy deviations; contacting department and other appropriate personnel for resolution.

Department Effort Coordinators (EC) & Authorized Certifiers

  • Ascertaining that the reported distribution of effort is a reasonable estimate of the effort expended for the reporting period.  The employee (or in rare circumstances a supervisory official having suitable means of verifying the employee’s work) should certify his or her individual effort.
  • Ensuring that all appropriate effort is reported in the certification.
  • Ensuring that the effort reports are reviewed, certified and processed on a timely basis.
  • Initiating, attaching ecrt documentation and appropriately routing any required corrections to payroll distribution based upon known changes identified in the certification process.

SALARY DISTRIBUTION PROCESSING

Authorized salary distribution processes used to create and update payroll information:

  • Payroll actions processed via the HR management systems:
    • New hires and re-appointments, (initial employment EPA/SPA, and EPA re-appointments) payroll actions.
    • Ongoing salary source administration processed via payroll action on a timely basis.
    • Retro-active adjustments.
  • The EPA Annual Raise Process (ARP) and SPA legislative salary increase (LSI) may also be used to process source changes during the annual State of NC budget update.

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

03/14/2011       Revised to correspond to ecrt system updates.

07/31/2010       Revised to clarify the institution’s anticipated transition to a planned confirmation system.

12/15/2009       Revised to reflect development of new effort reporting system standards.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Project Closeout

700.1 – Overview of Project Closeout Responsibilities

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Abiding by the terms and conditions of the award agreement, the Office of Sponsored Research (OSR), the Principal Investigator (PI), the Office of Technology Commercialization (OTC) and other central offices must complete and submit various final reports to the sponsor before an award can be closed-out.  These reports include, but may not be limited to:

Type of Deliverable for Final Reporting Responsible Party:
Project Performance Report PI
Final Report of Expenditures PI and OSR
Patents, Inventions, Technology Transfer Issues PI, OSR, and OCED
Real Property and Equipment ownership OSR and Asset Management
Contract Release/Contractor Assignment OSR

In meeting 2 CFR §200.327-329 requirements, the PI must submit the final performance report after completion of the project following the terms and conditions of the award.  OSR is to be notified via OSRBilling@unc.edu when the final performance report is completed.
The University is required to submit a final report of expenditures for the project to the sponsoring agency following the terms and conditions of the award.  OSR relies on the PI and department to complete the Closeout checklist in RAMSeS to identify any expenses that occurred before the project end date which are not reflected in the University’s financial system, ConnectCarolina.

As part of final reporting OSR, along with OCED, prepares documentation for the PI to sign, which reports whether or not patents, inventions or technology transfers are included as a result of the project.  In addition, OSR provides the funding agency information regarding title to any real property and equipment acquired during the project.  When necessary, OSR will also certify and submit any contractor release/assignment forms at the conclusion of a project.

In accordance with the record retention requirements of 2 CFR §200.333, financial records, supporting documents and any other records pertinent to the award must be kept for three (3) years from the submission date of the report, whether it is an interim or a final report.

The PI is ultimately responsible for overseeing the proper closeout of a sponsored project.   While the central offices prepare and submit final administrative reports, including financial and property reports, they do so on the basis of documentation created in the department.  PIs must assure that such documentation is adequate and readily available.  Also, PIs are responsible for ensuring that any necessary final financial adjustments and documentation (e.g., final invoices from vendors or subrecipients) are received and recorded in a timely manner.

Reason for Standard

This operating standard presents various types of final reports requested at the end of an award period to close out a sponsored project, with emphasis on collaboration amongst central offices, OSR and the PI in providing and reconciling all pertinent information to do so.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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700.2 – Project Closeout

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

Sponsored award accounts are officially closed when their balance in ConnectCarolina equals zero dollars, and the project status is inactive.  The project status in RAMSeS will also be changed to Frozen/Inactive.  The Office of Sponsored Research (OSR) supplies the administering department a copy of the Final Report of Expenditures (FROE), which serves as official notification that an award is moving toward closeout, pending reconciliation of any outstanding expenditures.
Outstanding balances will continue to appear on reports until those balances are resolved.  It is, therefore, imperative for the administering award department to scrupulously monitor accounts that are closing to ensure expenditures are necessary and acceptable under the terms and conditions of the award.

I. CORRECTED PROJECTS BY THE DEPARTMENT AND PI

Continue to monitor outstanding obligations as well as personnel encumbrances to see that the transactions are recorded in ConnectCarolina.  Also, any transactions that were not reported that post to the account, must be removed.

II. UNDERUSED FUNDS

When the total amount of awarded funds is not used, the unused portion is returned to the sponsoring agency following the award termination.  Should the agency allow the University to retain any unused funds, the department is responsible for preparing a request to OSR for the transfer of such funds into a departmental residual account for fixed price agreements only.

III. PROJECTS IN OVERDRAFT

When a project is overdrawn, corrective action must be indicated and promptly initiated by communications with OSR and the administering department.  Expenditures incurred too late to be of use during the award period will be diverted for use by and payment from another funding source.  Irreconcilable items will be returned to the department for payment from another source, inclusive of departmental accounts as necessary.

Reason for Standard

This operating standard encourages reconciliation of sponsored award accounts in a timely, accurate fashion and places responsibility for irreconcilable accounts with the departments.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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700.3 – Inactive Standard

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

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700.4 – Residual Fund Balance

Responsible Officer: Director
Responsible Unit: Sponsored Projects Accounting
Effective date: July 1, 2008
Last revised on: May 15, 2018

Background

Accepting a fixed price agreement involves a degree of risk because the University must complete all work even if the costs exceed the amount of the agreement. In addition to mitigating the risks associated with accepting fixed price agreements, the University must also ensure that relevant costs are assigned to the appropriate project and that the necessary processes are in place to assure consistency in estimating, accumulating, and reporting costs.

Consequently, Principal Investigators (PI) must budget carefully to ensure that the amount of the agreement is sufficient to cover project costs, ensure that all allowable and allocable costs are assigned to the appropriate project, and provide adequate documentation to justify large residual balances.

Operating Statement

A residual balance on a sponsored project is defined as the unobligated cash that remains at the end of the performance period after all deliverables and financial obligations have been fulfilled, and final payment has been received. Residual balances may be used to further University academic, research, and service missions.

At the end of the performance period, residual balances on sponsored projects will be transferred to the administering department when all of the following conditions are met:

  • All direct charges and project revenue have been accounted for properly
  • All project deliverables have been provided to the sponsor
  • All project payments have been received from the sponsor
  • The amount of indirect costs generated by the project’s expenditures have been recovered
  • The sponsored agreement terms do not require the University to return the residual balance
  • Justification is provided for residual balances greater than 25% of the Total Project Budget

INDIRECT COST APPLICATION EXEMPTION

Indirect costs will not be applied to residual balances except in the following rare instance: When fixed price projects receive a full or partial F&A waiver, full indirect costs will be collected from the residual balance, up to the amount that would have been applied to the incurred expenses if the waiver had not been approved and full F&A had been allowed from the start of the budget period.

Reason for Standard

The purpose for this standard is to detail the University’s requirements for residual funds.

Procedures and Related Operating Standards

Operating Standard 700.4 Procedure 1 – Requesting Residual Balance Transfer

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

10/17/2017      
Operating standard revised so that indirect recovery is based on incurred expenses (exclusions apply), justification threshold increased to 25%, and operating standard now applies to all sponsored projects.
05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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700.4 Procedure 1 – Requesting a Residual Balance Transfer

Corresponds to: Operating Standard 700.4 – Residual Fund Balance

Procedure Statement

Residual balances on a sponsored project may be transferred to an unrestricted department residual fund account to be used to further University academic, research and service missions. Reminders — All of the following conditions must be met to process a transfer:

  • All direct charges and project revenue have been accounted for properly
  • All project deliverables have been provided to the sponsor
  • All project payments have been received from the sponsor
  • The amount of indirect costs generated by the project’s expenditures have been recovered
  • The sponsored agreement terms do not require the University to return the residual balance
  • Justification is provided for residual balances greater than 25% of the Total Project Budget

Forms and Instructions

Transaction Creation

Create a Campus Journal in ConnectCarolina Finance Menu > UNC Campus > Campus Journals > Campus Journal Entry — Select “Office of Sponsored Research” for the Transaction Group and then select “RESIDUAL.”

  • Journal entries should debit the residual amount from the project chartfield using account code 582110 and credit the same amount to an unrestricted department chartfield using account code 482110.
  • The following journal attachments must be included:
    • Award terms that do not require the University to return the residual balance.
    • Email from OSR confirming the residual balance remaining on the project.
    • Justification signed by the department head if the remaining balance exceeds 25% of the total project budget.
  • If the journal has an error in budget checking, contact OSRHelp@unc.edu to request an override. Please include the journal ID, error message, and your contact information. Once the journal and budget check are valid, you may submit the journal into workflow approval process.

Approval Process

  • OSR Pre-Audit Technician reviews the journal documentation for completeness.
    • The transaction will be subject to rejection without all required documents
  • OSR Pre-Audit then has an Assistant Director of Sponsored Projects Accounting review the journal to confirm allowability and the correct residual balance amount before submitting final system approval in the journal workflow.

Revision History

10/17/2017       Procedure revised to match changes made to Operating Standard.
05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Audits

800.1 – Audits and Reports

Responsible Officer: Director
Responsible Unit: Cost Analysis and Compliance
Effective date: July 1, 2008
Last revised on: May 15, 2018

Operating Statement

The Office of Sponsored Research (OSR) is responsible for coordinating all audit matters and responses relative to sponsored research, training, and public service activities of the University.  Federal, State, and public firm auditors must make initial contact with OSR when conducting periodic audits or special inquiries relative to contract and grant matters.

OSR will coordinate Federal or public firm audit visits with departments to ensure that necessary personnel are available for discussions and to facilitate audit access to required records.  Depending upon the nature of the audit subject matter, OSR may elect to be represented in audit discussions at the departmental level.  Departmental personnel needing guidance at any time should contact OSR without hesitation.

The Executive Director of OSR is responsible for coordinating the University’s responses to those audits concerned with sponsored research, training, and public service awards.  This responsibility in no way relieves the Principal Investigator or department concerned from providing necessary input promptly, or from resolving financial liability that may ultimately be assessed as a result of audit exceptions. The Executive Director of OSR or an authorized designee will participate in and coordinate audit exit briefings.  Other University representatives will be requested to attend exit briefings as deemed necessary by the significance and nature of the audit findings and recommendations.

Financial responsibility for audit disallowances ultimately sustained rests with the department, school, or center having primary responsibility for the project on which costs are questioned.  Personal liability may be considered and assessed should circumstances show that an audit disallowance stemmed from a result of gross negligence or malfeasance on the part of an employee or staff member.

Reason for Standard

All performance under sponsored award agreements at the University is subject to internal and external audit according to the guidelines published in 2 CFR §200 Subpart F.  This operating standard establishes general foundations for audits of sponsored awards at the University.

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Research Service Centers

900.1 – Research Service Centers

Responsible Officer: Director
Responsible Unit: Cost Analysis and Compliance
Effective date: July 1, 2008
Last revised on: May 15, 2018

Background

Research Service Centers (RSCs), also known as cores or core facilities, recharge or service centers, support the research enterprise by providing researchers and scientists with access to infrastructure, scientific technologies, and services that are normally beyond the technical or financial capability of individual investigators.  Universities that perform Federally-funded research are required to have costing policies that comply with 2 CFR §200 Subpart E.  This document describes the process for creating RSCs that will provide services to sponsored projects and gives guidance for fiscal operations and administrative procedures.

REGULATORY INFORMATION

Cost Accounting Standards Board (CASB) regulations referenced in 2 CFR §200 Subpart E apply to RSCs that charge sponsored projects. Cost Accounting Standards address consistency in estimating, accumulating, and reporting costs, as well as consistency in allocating costs incurred for the same purpose.  Federal auditors may review procedures for establishing and monitoring RSC rates to ensure that proper accounting procedures are in place.  If procedures are not observed, reimbursements may be disallowed and may result in repayment, fines, and other adverse consequences.

Operating Statement

The University administers RSCs according to Federal costing standards, as well as State and University policies.  RSCs are created, operated, and administered by University business units with central review and oversight of Cost Analysis and Compliance in the Office of Sponsored Research (OSR).  RSCs may also be subject to additional policies and procedures at the discretion of the business units’ school or college.  This operating standard provides institutional guidance and procedures for rate-setting methodology, equipment replacement and upgrades, University subsidies, treatment of unallowable costs, use of cash reserves, and equipment depreciation.

I. RESPONSIBILITY HIERARCHY

Academic and Research Business Units
These campus units are responsible for determining appropriate billing rates and operations, submitting rate proposals to OSR for rate reviews at least once every two years, fiscal accountability, and subsidies as required.  Ultimate responsibility for operational oversight rests with the department head and the dean.  The school or college may provide additional supplemental guidance, policies, and procedures pursuant to this oversight so long as those guidelines do not conflict with this operating standard.

Office of Sponsored Research
OSR provides institutional oversight by approving operating and reserve account requests, rates, and rate-setting methodology.  It also performs periodic rate reviews, monitors charge-back operations, and reviews fund balances.  OSR provides consultation on rate-setting methodologies and financial compliance.
University Internal Audit
RSCs are subject to selection by University Internal Audit in its work plan to ensure compliance with University policies.

II. GUIDELINES FOR COST RECOVERY

General

  • RSCs are separately budgeted and accounted for in the University’s financial accounting system.
  • RSCs should recover operating costs over an operating cycle, generally a single fiscal year.
  • RSCs should apply a break-even costing concept to develop rates for Federally sponsored projects.
    • Operating at break-even means there is no significant profit or loss resulting from charging for usage in an operating cycle, zero profit or loss over the long-term as any excess surpluses, and deficits are eliminated by adjusting future rates.
    • All usage must be included in the break-even rate calculation and charged out or subsidized in accordance with the OSR-approved rate schedule.

Rates

  • OSR performs the institutional review, approval, and oversight function that allows RSCs to charge fees for services.
  • Departmental management must submit proposals to OSR for periodic rates and financial compliance review every two years and more often if necessary.
  • OSR-approved rate schedule should be applied consistently to all sponsored projects and departmental users, and rates may not discriminate against Federally funded projects to the benefit of other users.
  • Federal government must not subsidize other RSC users through rates that do not reflect all RSC usage. RSCs may elect not to charge a University user, but this usage must be subsidized by internal University sources.

Billing

  • RSC services must not be incurred after the end date of the sponsored project being charged.
  • RSCs must exclude unallowable costs from their Federal billing rates and may not charge Federal sponsored agreements in advance of the performance of any services (advance charges or pre-billings).
  • RSC should bill customers on a monthly basis since charges are unallowable on a sponsored award if not billed promptly.
    • Charges incurred during the performance period of an ending project must be billed within 60 days of the end date of a project.
    • The department that owns the sponsored project will not be responsible for the charges if the RSC has not billed their customers promptly.
    • The lost revenue related to the unallowable charge must be covered by the RSC’s owning department.

Definitions

RSCs provide specialized services for University users for a predetermined fee.  The costs are separately accounted for and recovered on a break-even basis by charging a fee to users in proportion to services rendered.  The RSC’s primary purpose is to support University researchers; however, services may also be provided to external users.  Examples of RSCs include instrumentation, scientific equipment and computing centers and educational media services.  RSCs vary in size, complexity, and rate structures.  Services provided may not be readily available from external sources or be subject to external market forces.

Reason for Standard

The purpose of this standard is to document the expectations and treatment of Research Service Centers.

Procedures and Related Operating Standards

Contacts

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.  For questions regarding Preaward management or Post-Award administration, please contact the assigned Sponsored Programs Specialist. For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

References

Revision History

10/31/2017       Operating standard updated to reflect updated Guidelines for Cost Recovery and Contacts.
04/27/2010       Operating standard updated to reflect revised Guidelines for Cost Recovery.
05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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900.1 Procedure 1 – Research Service Centers

Corresponding with: Operating Standard 900.1 – Research Service Centers

Procedure Statement

Instructions

I. ALLOWABLE RSC OPERATING COSTS

All costs recovered by established RSC recharge rates must be allowable under Federal and University guidelines. Charges must meet all Cost Principles and be allowable as Direct Costs.

Direct Costs
Direct Costs are recovered through the rates charged to users.  These costs are beneficial and easily be attributed to RSC activities with a high degree of accuracy.  Direct costs include both personnel and non-personnel costs.

Indirect Costs
Any costs incurred for a common or joint purpose are not considered direct costs. Costs not specifically attributed to the RSC are also not direct costs. These are categorized as indirect costs and should not be budgeted into RSC recharge rates or charged to the RSC.

Unallowable Costs
Select cost types are considered unallowable from being be paid from RSC operations funds and cannot be included in the RSC recharge rate calculation:

  • Scholarship/Fellowships
  • General Office Supplies
  • Entertainment Costs/Alcoholic Beverages
  • Bad Debts
  • Advertising and Publicity/Public Relations
  • Goods or services for personal use
  • Fines and penalties resulting from violations of (or non-compliance with) Federal, state or local laws and regulations
  • Donations and Contributions
  • RSC operations costs used as a source for Cost Sharing

II. RSC RATE DEVELOPMENT

RSC rates charged should be designed to achieve a break-even operation over a long-term period, usually two years.  Rates should be formally reviewed at least annually at the department level and every two years by the CA&C office.  Written approval by CA&C is required whenever a new rate or fee is added, revised or deleted.

This rate is determined as follows:


Break-even Direct Cost Rate = Total Estimated Annual Direct Cost ÷ Total Estimated Annual Usage

Internal Users
These users are generally charged the break-even direct cost rate.  This rate should include all the appropriate allowable direct costs associated with providing the service.  Examples include personnel costs for individuals conducting the RSC usage activities; materials and supplies for RSC usage activities; maintenance and repairs for equipment used for RSC usage activities; select cases of equipment; and other costs allocable and directly benefiting RSC usage activities.

Internal user or sponsored agreement are to be charged the break-even rate.  Subsidies are only allowed when pre-identified groups are provided a reduced fee, and the subsidized portion is charged to a prescribed and appropriate funding source when services are invoiced.

External Users
Research Service Centers are established primarily to meet the needs of the University’s research community.  However, it is possible the external users may wish to use RSC services.  External users are defined as entities governed and administered independently from UNC-Chapel Hill. This includes UNC Hospitals, UNC General Administration and its other constituent institutions, other institutions of higher learning, state and local governments, non-profit organizations and commercial enterprises.  External users are charged the higher of the prevailing market rate or the internal break-even direct cost rate.  External users are also charged the applicable negotiated on-campus organized research Indirect Cost rate.

Sales to external customers fall under special scrutiny due to the NC Umstead Act which addresses government agencies conducting business operations, and also the IRS Unrelated Business Income regulations which deal with nonprofit organizations (including schools and universities) realizing gross income from regularly conducted business that is not substantially related to its educational and other exempt purpose. CA&C can help the RSC determine whether they comply as to its external sales.

Other Pricing Models
Volume discounts or other special pricing mechanisms may be allowable. However, they must be equally available to all users who meet the criteria and must not be subsidized by other users of RSC services. The RSC must be able to demonstrate that the Federal government is not paying more than the cost of the service it is receiving.  The sources and nature of RSC subsidies must be fully documented and disclosed in the operating plan.  Discount rate calculations must be presented on the rate development schedules.

III. REQUIRED RATE DOCUMENTATION

RSC Rates and revision to rates must be submitted to the OSR CA&C for institutional approval.  OSR reviews rate proposals and rate revisions to ensure compliance with federal regulations.

The proposal submission materials should include:

  • RSC Operating Plan documenting key personnel, a description of operations, and the resources used for RSC operations
  • Rate Development Worksheets and supporting documents which are used to calculate rates for each service or product.  An updated operating plan and related rate calculations and support schedules must be submitted to Cost Analysis & Compliance (CA&C) for review with each rate proposal.

IV. RATE PROPOSAL REQUIREMENTS

Infrastructure Details RSC key contacts and management personnel, moveable equipment, space resources, funding subsidies, and potential customers. Services List A description of all services to be provided and rates for services based on the type of user. Annual Operating Budget

  • Documentation for all direct costs by account group including salaries and benefits of RSC staff, materials, and supplies needed for services, equipment maintenance and repairs, equipment lease or rental costs, machine and lab supplies and other direct expenses.
  • Unallowable costs must be specifically excluded from the RSC direct cost budget (entertainment, bad debts, non-recruitment advertising, public relations, alcohol, etc.).
  • Total budgeted direct cost for each account group must be distributed to the proposed rate or service category that the cost item benefits, accurately reflecting the causal and beneficial relationship between the budgeted cost, proposed service, and rate to be charged.
  • Identify costs that benefit more than one service. Provide a list of the costs and benefitting services or an allocation plan accurately measuring the relationship between the budgeted cost and service category.

Estimated Services Usage
Estimated usage or output for each service such as a number of units for each service category. Documentation of historical usage rates can be used to inform these estimates.

Rate Calculations

  • Calculate the direct-cost based rate for services provided for each type of user as appropriate.
  • Include supporting information, usage logs, objective calculations, and other documentation to support rate and costing compliance.

Administrative Unit Approval The proposal should be signed by the responsible department chair, dean of the school, or director of the center or institute and provide a default chartfield as a guarantee to cover operating shortfalls. In the event deficit funding is required, OSR will consult with the school or college to identify the actual source of deficit funding.

RSC Administration and Operations
RSCs must maintain separate accounting records for operating expenditures and revenue collection.  OSR will request a new ConnectCarolina chartfield string for newly established RSCs and will provide them when created by Accounting Services.  For revised rate plans, OSR will provide updated documentation to Accounting Service and notify the RSC when they can institute the newly approved rates.

The break-even rate is meant to recover the total direct cost required for RSC activities over the operating cycle.  It is important that operating unit new RSC fund balances frequently to ensure the accuracy of the estimated rate.  New RSCs are to monitor and improve their cost structure moving forward.  This will reduce variance between budget estimates and actual costs.

V. RSC REQUIREMENTS

Records and Reconciliation

  • RSCs are required to maintain sufficient documentation for operations which may be required for period RSC review. Financial and operational records must:
    • Capture all equipment usage and RSC output
    • Identify the rate charged for all activities performed
    • Adequately track charges and identify the customer paying for the service
    • Reconcile billed amounts with payments made by customers
  • RSC monthly activity must be reconciled to ensure all services and output are accounted for and invoiced to customers per the approved rate schedule.

Internal Billing

  • RSCs must invoice for all services to internal and external customers on a monthly basis. Invoicing RSC customers on a regular and timely basis ensures that revenue is appropriately recovered.
    • Allowable activities incurred on a project scheduled to end during the billing period must be charged within 60 days of the end date of the project. Relevant charges not billed by the RSC within this period are not the responsibility customer and must be covered by the RSC.
    • RSCs may not charge Federal sponsored agreements in advance of the performing the services
    • RSCs are not responsible for charges if the internal customer has provided an incorrect chartfield string for billing.
  • Record internal revenue at least monthly in ConnectCarolina

External Billing

  • For external customer billing, please refer to the required special monitoring and documentation procedures for external revenue located in the Special Costing Issues section of this procedure.
  • Invoice external customers no less frequently than monthly at approved external rates.
  • Invoices for external use should specify a “due date” no more than 30 days from invoice date. Deposit payments with the Student Accounts and University Receivables Office. Credit external revenues to account 441911 (Sales – Other Outside).
  • The UNC Finance Division Policy 503 – Accounts Receivable specifies that accounts receivables should be billed monthly and a “concerted effort should be made to collect all accounts.”  For guidelines regarding the collection of unpaid billings due to the University, please refer to the UNC Finance Division Procedure 503.1 – Collecting Past Due Accounts Receivable.
  • Uncollected external revenue is the responsibility of the departmental unit.  The original revenue transaction must be reversed and charged to a departmental chartfield. The cost of uncollected revenues cannot be charged to or absorbed by other RSC customers or sponsored projects.

Reviews and Proposal Submissions Notify OSR CA&C when RSC rates should be revised and forward the rate materials, including the proposed new rate schedule, for review.

VI. SPECIAL COSTING ISSUES

Capital Equipment and Equipment Depreciation Capital equipment is defined as equipment with an acquisition cost of $5000 or more and a useful life of more than one year.  Generally, capital equipment may not be included in RSC rates; however, in certain circumstances, equipment depreciation may be included in RSC rates.

  • Depreciation must be included in the OSR approved RSC rate structure
  • The depreciation is not related to equipment purchased with sponsored funds
  • The RSC must maintain a strict accounting of the operating surplus generated from charging the depreciation component of the approved RSC rate
  • Depreciation reserves must be used solely to purchase capital equipment
  • All depreciation funded equipment purchases must be approved by OSR in advance
  • Surplus operating account fund balances that are not generated by an approved depreciation rate component may not be used to purchase capital equipment

Incorporating Equipment Depreciation An RSC may include annual equipment depreciation in the break-even rate calculation when all of the following apply:

  • The equipment is tagged and accounted for by University Asset Management.
  • The annual depreciation amount is in accordance with the University’s schedule of annual depreciation
  • The equipment was not purchased with sponsored funds
  • The equipment item is used only by the RSC, or a usage log accurately supports the proportion of the use being proposed
  • An allocation plan for the annual depreciation is created to benefit activities/services
  • The amount generated from charging for depreciation must be tracked as a separate reserved portion of the RSC’s balance. Department management accepts responsibility to set up, generate, monitor, and account for the equipment depreciation balance.

External Revenue Special monitoring and documentation are required when carrying out transactions with external parties.  External revenue is comprised of two components: break-even portion of external revenue and above-cost portion of external revenue. Both components of external revenue must be monitored and separately documented by the operating unit.

  • Break-Even External Revenue The break-even portion of external revenue is defined by the applicable internal rate multiplied by the quantity of service output supplied to the external patron: Break-even External Revenue = Approved Internal Rate * Quantity Supplied
  • Above-Cost External Revenue The above-cost portion of external revenue is determined by multiplying the service output provided to the customer by the difference between the approved external rate and the applicable internal rate:

Both the break-even and above-cost components of external revenue must be documented to monitor financial compliance and reconcile balances for rate adjustment purposes.  The external revenue operating surplus is not subject to rate carryforward adjustments and can be set aside to be used by RSC management solely for the benefit and improvement of the RSC’s operations.

Fund Balances The book fund balance is provided as a line item of the RSC’s budget in ConnectCarolina at any point in time.  This balance is the difference between recorded revenues and expenditures from the time the RSC was first established to the present:

The delay of time between billing and when customer payments are received is referred to as timing differences.  Accordingly, book fund balance must be adjusted for timing differences to reconcile book fund balance to actual fund balance.

Any external revenue or depreciation components contained in approved service center rates will cause a planned surplus. Depreciation and the amount charged to external customers above the break-even rate will exceed the actual direct cost. Reconciling

Book Fund Balance = Posted Revenues – Posted Expenditures

RSCs should not accumulate large surpluses or deficits.  Federal regulations specify that rates should be established to achieve a break-even operation over an operating cycle. An operating RSC surplus is identified by a credit fund balance. Surpluses are generated when revenues exceed expenditures over time.  An operating RSC deficit is identified by a debit fund balance.  Deficits are generated when expenditures exceed revenues over time.

RSC management should monitor transactions and operating balances to ensure the operation is breaking even over time.  Break-even is achieved when the operating account’s fund balance results in zero after all outstanding revenues and outstanding expenditures have been recorded and posted to the financial system as of a given point in time.

The delay of time between billing and when customer payments are received is referred to as timing differences. Accordingly, book fund balance must be adjusted for timing differences in order to reconcile book fund balance to actual fund balance.

Any external revenue or depreciation components contained in approved service center rates will cause a planned surplus. Depreciation and the amount charged to external customers above the break-even rate will exceed the actual direct cost. Reconciling book fund balances to actual fund balance reconciliations must include adjustments for external revenue and depreciation.

The actual fund balance is the book fund balance that has been analyzed and adjusted for timing differences, equipment depreciation, and external revenue reserves contained in book fund balance.


Actual Fund Balance = (Book Fund Balance ± Timing Differences) – Conceptual Reserves

RSC reviews the actual fund balances and billing rates to avoid the accumulation of unallowable surpluses and deficits.

Fund Balance Ratio and Working Capital
Actual fund balance should not exceed 60 days of working capital or approximately 17% fund balance ratio surplus or deficit.

First, determine the fund balance ratio percentage:


Fund Balance Ratio % = Actual (Reconciled) Fund Balance ÷ Average Annual Expenditures

Next, calculate days of working capital (stated in number of days):


Days of Working Capital = Fund Balance Ratio * 360

Reconcile the fund balance and calculate the fund balance ratio and days of working capital regularly. Actual fund balance should be zero after allowing for timing differences and reserves.  Pay particular attention to actual surplus and deficit fund balances and the trend.  The RSC should understand the possible causes of fund balance trends: timing differences, depreciation, external sales, rates are too low, rates are too high.

An excessive surplus fund balance is eliminated by reducing current rates in future periods or crediting overcharges back to users.  An operating fund balance surplus may not be reduced by purchasing equipment or incurring other expenditures which would not be reasonably expensed in normal operations.

An excessive deficit fund balance is eliminated by increasing rates in future periods, back charging users, or charging the default or other designated departmental chartfield.

Rate adjustments are made by submitting a proposal to OSR for rates review and modification at least every two years and more often if necessary before the actual fund balance surplus or deficit consistently exceeds 60 days of working capital.  If the RSC has a surplus or deficit book fund balance that is consistently greater than 60 days of working capital, OSR may request that an interim proposal (between biennial reviews) to modify rates be submitted for review and carryforward adjustments.  OSR targets a fund balance ratio of 10% surplus or one month of working capital when establishing new rates to eliminate excessive surpluses or deficits.

OTHER COMPLIANCE REQUIREMENTS

Conflict of Interest and External Professional Activities for Pay – Policies and procedures must be observed by all employees performing activities associated with a research service center.

Value of Year-end Inventory and Accounts Receivable – The University’s annual financial statements must be prepared in accordance with Generally Accepted Accounting Principles.  Therefore, any units that have unrecorded accounts receivable or normally carry or anticipate having on hand at the end of the fiscal year a two month or greater prepaid supplies or commodities inventory, must contact the Accounting Services Department to arrange fulfilling year-end financial reporting requirements.

Unrelated Business Income (UBI) from External Revenue – The University is required by the Internal Revenue Service to monitor and report unrelated business income.  Units conducting relationships with outside parties to generate external revenue should complete and submit the questionnaire developed by UNC Finance Controller’s Office for that office to review and determine if UBI exists.

Percentage of Effort – The amount of salaries for any employee charged to the RSC operating chartfield must be commensurate with that individual’s percentage of effort expended in direct support of the RSC.

Document Retention – Document all operating activities and usage and maintain records according to University record retention guidelines to support expenditures, billings, and transfers. These records include:

  • Documentation on how the rate was calculated
  • Published rate schedules
  • Usage logs supporting equipment utilization and level of activity
  • Time cards for hourly staff used to allocate time to multiple services
  • Billing records

Revision History

11/30/2017       Revised procedure to align with operating standard updates that reflect updated Guidelines for Cost Recovery and Contacts.

05/15/2018       Revised to coincide with the release of the new OSR Website.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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