SPA Newsletter - Fall 2015 |MSU Sponsored Programs Administration

Greetings from SPA/OSP/CGA!

We are excited to debut the new Sponsored Programs Administration (SPA) Newsletter! This is a combined newsletter with content from the Office of Sponsored Programs (OSP), Contract and Grant Administration (CGA), and SPA and we will initially plan to publish twice per year.

This newsletter is also available online at www.osp.msu.edu, and may contain extended versions of articles in this issue. Each article includes contact information should you have specific questions related to the corresponding content. For comments related to the overall content of the newsletter, or suggestions for future content, please contact: Jennifer Lafferty, stumpje1@osp.msu.edu or me. We hope you enjoy our first issue and we look forward to hearing your feedback!

Best Regards,
Twila Fisher Reighley, Assistant Vice President of Research and
Graduate Studies

NEW Budget Development Guidelines

Preparing a proposal budget takes a significant amount of time and consideration on behalf of the PI and research administrator. To assist with this process, OSP has posted Budget Development Guidelines, which provides guidance on the standard budget categories, as well as the budget justification, and also includes the start of an expanding list of Frequently Asked Questions. Questions? Contact Laura Johnston at cooklau1@osp.msu.edu.

New Cost Transfer Formby Kristy Smith, CGA

CGA has developed a new Cost Transfer Form that is required with certain high-risk cost transfer requests processed on General Error Correction (GEC) documents or as SAP cost redistributions/payroll transfers. Please note that modifications were recently made to the form; detailed information regarding cost transfers, as well as the most current form and associated documentation can be found on CGA's website at Cost Transfers.

Why was this form developed?

Cost transfers represent the riskiest accounting transaction that can occur on an RC account. They are considered suspect by many of our sponsors because they represent expense errors which could be an indication of a lack of internal controls. Therefore, it is necessary to provide more information/documentation than typically requested in order for a decision to be made regarding the transfer request. The new form was developed to assist campus by streamlining information into a consistent format, minimizing administrative burden and decreasing the number of emails associated with processing such transfers.

Please note that not all transfers are considered cost transfers, and not all cost transfers will require this form. Please see the above link to CGA's website for a more detailed definition of cost transfers and examples of transfers that would be excluded from the Cost Transfer Form requirement.

When is the form required?

A completed Cost Transfer Form will be required with cost transfer requests that meet the following criteria:

Includes the transfer of an expense(s) to an RC account that is funded by a federal or State of Michigan entity, AND
Requests the transfer of expense(s) that was incurred more than 90 calendar days from the date CGA receives the request.

What processes will be changed?

Upon implementation on July 1, 2015, CGA no longer requires that General Error Corrections be ad-hoc routed to a PI for approval. In addition, the amount of time campus has to transfer expenses to a new or recently modified RC account with minimal explanation was extended from 45 days to 60 days from the time CGA sends an email notification of a new award/modification to the Principal Investigator and department administrator.

Questions? Contact CGA's Audit and Compliance Group at audit.compliance@cga.msu.edu

Uniform Guidance Updates & Highlights

Admin/Clerical Salaries may be allowable as direct costs. How does this affect your project?

Although routine admin/clerical salaries should typically be treated as indirect costs (i.e. paid by the General Fund), admin/clerical salaries may now be included in proposal budgets as direct costs. Questions regarding special cases or justifications should be directed to departmental or college administrators and/or OSP. Admin/Clerical salaries must be in the award budget in order to be charged directly to RC accounts for new federal awards received after 12/26/14. Current awards, as well as new federal awards received prior to 12/26/14, will not be impacted until a modification is received. After that point, agency approval of admin/clerical salaries must be obtained.

Computing Devices may be allowable as direct costs when essential and allocable to the federal project. How does this affect your project?

The UG recognizes the advancement of technology and benefit of computing devices to federal projects, providing grantees more flexibility in the direct charging of computers. Although computing devices do not need to be used exclusively for project purposes, the device cost must be allocated based on anticipated use and provide a direct benefit to the project, both of which should be documented with the purchase. This clarification does not result in a significant change to MSU’s Federal Cost Policy.

Questions?
Contact Dan Evon at evon@cga.msu.edu

Grant vs. Contractby Gladys Raymond & David Tuthill, OSP
vs. Gift vs. Fee-for-Service

Someone once said, "If you hate difference, you will be bored to death." There is certainly no chance of boredom in the world of research administration because "difference" is a daily reality. Award mechanisms come in all shapes and sizes and most often with their own set of rules for management. Your last project might have been funded with a National Science Foundation grant (assistance/grant mechanism). The project before that one might have been funded with a federal contract (acquisition/procurement mechanism). Perhaps you have been hired to provide specific services that provide a deliverable that is based on a set fee or a published rate (fee-for-service mechanism). Each of these funding approaches has a personality of its own. Knowing the differences among them, and ultimately embracing these differences, is extremely important to the overall health and well-being of your project.

Resources & Definitions

Michigan State's Manual of Business Procedures, Section 315 (revised March 2015) is an excellent resource for understanding the differences between the various award types. We encourage you to spend a few minutes reviewing the Manual to familiarize yourself with these different mechanisms. It is likely that, at some point in time, your research or the projects you are administrating will be funded multiple times by one or more funding mechanisms.

This topic is far too complex to discuss exhaustively in this newsletter, but we can begin with a few simple definitions:

Grant – The transfer of a thing of value where substantial involvement by the granting agency is not expected; typically for the public good.
Cooperative Agreement – The transfer of a thing of value where substantial involvement by the granting agency is expected (greater agency control).
Contract – The acquisition by purchase, lease, or barter, property or services. A contract is a mutually binding legal relationship obligating the seller to furnish supplies or services and the buyer to pay for them.
Gift – The transfer funds or property without any valuable consideration or compensation to the donor.
Fee-for-Service – The request for a deliverable using known practical applications of standard procedures using special or unique MSU research capabilities and typically involves a set fee or a published rate that is routinely charged to all potential customers.

Terms & Conditions

Each mechanism is unique to the mission and benefit of the funding agency and reflects differently on things such as cost, publication/data review, scope of work, and value exchange. For example, a gift probably would not require a review of publications or data, but a grant or a contract may place restrictions on how those items are handled before being made available to the public. A grant might allow the title of equipment to be vested with MSU, but a Federal contract, typically, would not. There may be no restrictive terms or conditions associated with a gift funding your project, but a Federal grant would be governed by 2 CFR 200 and agency specific terms and conditions, and a Federal contract would be subject to another set of rules entirely -- the famous Federal Acquisition Regulations (FAR).

Fee-for-Service & Gift Distinctions

Sometimes determining the nature of an activity, such as determining if a project nature and mechanism is actually a fee-for-service rather than a research/scholarship or sponsored project, can be an arduous process. Grants, cooperative agreements and contracts are fairly straight forward. But, in the case of fee-for-service it can be a bit more complicated. Section 315, Article 9 of the Manual of Business Procedures provides an excellent set of guidelines designed to help MSU investigators understand the differences between sponsored project activities and fee-for-service projects.

"Research and Scholarship Projects, Other Sponsored Project Activities" is work which the University conducts to uncover new and different trends or facts leading to a discovery. The pathway to discovery and the creativity of new ideas is in the hands of a principal investigator and other University employees and usually starts as a proposal which outlines a promising area of inquiry. Such work is an investigation aimed at the discovery and interpretation of facts, revision of accepted theories in light of new facts, development of new analytical and experimental protocols, or practical applications of such new theories, analysis, data gathering and experiments.

"Fee-for-Service Project" is work where the deliverable requested is generated using known practical applications of standard procedures and established theories, methods and standard experiments. Another form of fee-for-service is work for which the company provides a detailed protocol for the project, which must be performed as received by the university. The results of such work are of specific interest to the sponsor and may involve off-the-shelf tools and established protocols. Fee-for-service projects do not include novel analyses or interpretation of data sets, and the deliverables are limited to the results generated using the standard procedures, established theories, methods and experiments utilized in the performance of the work.

Based on these definitions, the following questions should be asked for clarification and the corresponding determination should be considered:

Question	If "yes," this is probably
Is MSU executing a protocol (statement of work) that was created primarily by the company, and is MSU expected to follow that protocol without variation?	Fee-for-Service, except Clinical Trials
Is the work restricted to the performance of previously published methods that are routinely executed by MSU and/or to methods prepared by the company and for which standardized pricing is typically appropriate?	Fee-for-Service
Will the investigator develop any new methods to generate data for the project?	Research, Scholarship/Sponsored Project
Is the work testing an hypothesis generated by an MSU investigator?	Research, Scholarship/Sponsored Project
Will the investigator analyze the data generated and draw conclusions from those data that will not be used in research but will be used for outreach or extension projects or reports used for such purposes?	Fee-for-Service
Will the investigator use the data generated to recommend additional studies or “next steps?”	Research, Scholarship/Sponsored Project

Just as Fee-for-Service agreements are distinguished from Research agreements, sponsored projects are set apart from gifts. MSU receives funding from a wide variety of sponsors, the vast majority of which would be considered sponsored projects. In some cases, funds may come from a non-governmental agency in which there are no technical reporting requirements and the nature of the award mechanism needs to be considered. In this case the following questions would help make a determination:

Gifts	Sponsored Project
Is the work restricted to the performance of previously published methods that are routinely executed by MSU and/or to methods prepared by the company and for which standardized pricing is typically appropriate?	Funding for a project provided by an external sponsor that typically has defined expectations for activities (whether research, scholarly activity, training, instruction and instructional design, etc.)
Funding does not originate from a government agency.	Funding may originate from government agencies, as well as from corporations, associations, and foundations.
Funding for a general or specific purpose, within a general area of work.	Funding based on a specific statement of work as stipulated in the agreement conveying the award. The sponsor may also predetermine it.
Deliverables typically limited to (at most) reports as noted below, plus use of funds as generally requested and awarded.	Deliverables defined by agreement, e.g., reports, results, IP rights, services, training, equipment prototypes, specific start and end dates, etc.
Pre-approval of expenditures not required unless a change in circumstances requires the University to revisit the purpose of the gift with the donor.	Certain expenditures may require prior approval by the sponsor.
No requirement for return of unexpended funds.	Funder may (or may not) require that unexpended funds be returned if funds are not approved to be carried forward to extend the project.
No technical reports required. Non-technical reports are recommended as a courtesy.	May require technical, quarterly or annual progress reports, and detailed financial reports. May also include right of sponsor to audit project.
No restriction on publication rights. Acknowledgement of donor support in publication is recommended as a courtesy.	Sponsor requires or restricts acknowledgement of support in publications. May request/require minor publication delays.

This snapshot of the variety of award mechanisms illustrates that just as the nature of each project varies, so do the rules and mechanisms that fund them. The fact that you have a grant, a contract, a gift, or a fee-for-service agreement really does matter. This is why the Office of Sponsored Programs (OSP) and Contract and Grant Administration (CGA) play such an important role on campus. “Different” is a daily reality for us and we are here to help with understanding those differences. We look forward to partnering with you administratively to ensure that your award is understood and managed efficiently and accurately.

Note: Section 315 of the Manual of Business Procedures includes the most up-to-date and accurate information related to Sponsored Projects, Fee-for-Service, and Gifts.

Questions?
Contact ContractTeam1@osp.msu.edu OR ContractTeam2@osp.msu.edu

How will I know OSP has received my award?

OSP's target is to notify PI(s) and department administrators (pre & post award) by email within 1 business day of the award receipt in OSP, along with the nature of the award mechanism and a copy of the award. The need to complete any related compliance documents, budget and/or e-transmittal revisions will be communicated if applicable. In some instances, the PI will be asked to review the award, notify OSP of any concerns, and respond via email that he/she is in agreement with the terms as they are stated in the award (contract mechanisms require a PI assurance letter to clarify terms of the award). OSP will enter details on the status of the negotiation in the Activity Log for PI/Department reference.

Questions?
Contact ContractTeam1@osp.msu.edu OR ContractTeam2@osp.msu.edu

Sparty using the "Spartan Selfie" App

Introduction to Subawards at the Proposal Stageby Craig O’Neill & Denise Lator, OSP

A subaward is an agreement that provides sponsor pass through funds to another entity. It is also referred to as a subcontract or subagreement, depending on the type of award and source of funds. When MSU receives an award directly from the sponsor, MSU is called the prime recipient, and the entity receiving a subaward from MSU, is called the subrecipient.

A subaward is needed when MSU’s Principal Investigator (PI) enlists another entity to complete a specific project component. The subrecipient and its PI are responsible for their part of the project’s design and conduct and any reports to the sponsor regarding the research or educational activities within their realm of responsibility. The reports must be compliant with the sponsor’s requirements.

A subaward can be confused with hiring a consultant or purchasing services from a vendor because all three of these categories may provide services under a prime award. MSU’s PI should carefully review the proposed nature of services to determine the appropriate budget category and to understand what proposal documentation is necessary. Reviewing the substance of the services to be provided and the type of financial relationship to be formed is more important than what we call the contractual agreement. Another distinguishing characteristic of subawards is that MSU only allocates Facilities & Administrative (F&A) cost rates on the first $25,000 of each subaward, but allocates full F&A on all consultant and vendor costs. It would not be appropriate to budget a consultant agreement or vendor quote as a subaward simply to avoid having to budget the applicable F&A.

A proposal that includes one or more subawards may require substantial lead and review time. For this reason, MSU’s PI should establish a timetable for completing subaward documents (e.g. statement of work, budget, budget narrative, commitment form signed by an authorized representative, etc.). In general, this information should be provided 2-3 weeks before the proposal submission deadline to allow for incorporation into MSU’s proposal application. Missing this deadline could cause significant delays, prevent the submission of the proposal, or result in removing the subaward from the proposal in order to meet the deadline. Please note that fixed-price subcontracts require additional documentation and may require added time.

Questions? Contact ProposalTeam1@osp.msu OR ProposalTeam2@osp.msu.edu when needing assistance. Information about subawards, consultants, vendor defi-nitions, and how to document the relationship classification can be found at https://www.cga.msu.edu/PL/Portal/DocumentViewer.aspx?cga=aQBkAD0AMgA0ADEA and the FDP "Checklist to Determine Subrecipient or Contractor Classification" form.

What are Participant Support Costs?by Vicki Spencer & Pat Hampton, OSP

When preparing your proposal budget, you may notice that the Sponsor allows a budget category called “participant support costs.” What does this mean?

Participant support costs (PSC) are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

Who are participants? Participants may be students, national scholars and scientists, private sector company representatives, state or local government agency personnel, teachers and others who attend and participate in a conference, symposia, workshop, or short-term training activity supported by a particular award. Participants perform no work or services for the project or program other than for their own benefit; they are not involved in providing any deliverables to the University or a third party and may not be a MSU employee or MSU student that is receiving compensation directly or indirectly from the project.

What may be included as a participant support costs? Some examples include:

Event registration fees
Event support costs for lodging and meal expenses paid directly to the event facility, only if the payment is made on behalf of, or reimbursed directly to the participant
Tuition if required to participate in project
Laboratory or training materials if required
Stipend – predetermined amount to be paid directly to participant
Subsistence allowance – predetermined amount to assist with costs (such as lodging, meals, and laundry) necessary to participate in the project. Note that local area participants are exempt from having these costs covered.
Travel costs when the sole purpose of the trip is to participate in the project activity
Meals and incidentals when on travel status

What costs are not considered participant support costs? Some examples are:

Payments made to research subjects as an incentive for recruitment or participation in a research project. (This is a common budgeting mistake.)
Honoraria for guest speakers
Expenses for the PI, project staff or collaborators to attend meetings, conferences or seminars
Payments to Graduate Research Assistants
Payments to trainees who are receiving compensation, either directly or indirectly, from other Federal government sources while participating in the project.

Why is the participant support cost classification important? There are two main reasons for classifying participant support costs correctly. First, if an expense is incorrectly identified as a participant support cost, the Federal funding agency may not consider it an allowable cost as defined by the Federal Uniform Guidance (2 CFR 200.75). Second, participant support costs are handled differently when assessing Facilities and Administrative Costs (F&A). The Uniform Guidance states that participant support costs are exempt from F&A in federally sponsored projects. Therefore, you need to exclude PSC from the MTDC base so they will not accrue indirect costs. This is why participant support costs are included in their own category in Federal budgets.

For non-Federal awards, sponsor-specific guidelines should be utilized to determine if F&A is allowable on participant support costs. If there are no sponsor-specific guidelines, the Federal Uniform Guidance, which excludes F&A from PSC expenses, should be followed.

What are the post award impacts of budgeting participant support costs? If the project is funded and a PI decides to revise the budget to move costs out of the participant support cost category, the PI must request prior approval from the Federal awarding agency. This prior approval is also required for subaward budgets. For this reason, it is better to classify participant support costs correctly during the proposal stage so you can avoid post award complications.

Budget Tip: When submitting your budget to an OSP Proposal Team for review, it would be helpful to include your budget justification along with the budget so they can determine if participant support costs have been identified correctly.

Where can I find additional information on participant support costs? The OSP Proposal Teams are available to assist with questions related to participant support costs and they can help determine when and how you should include them in your proposal budgets.

Questions? Contact ProposalTeam1@osp.msu OR ProposalTeam2@osp.msu.edu with questions.

Newly Negotiated F&A Rates

MSU has negotiated new Facilities & Administrative rates (F&A, indirect or overhead):

Current Rates

7/1/11-6/30/16

Research - 53.5%
Other Sponsored Activities - 36%
Off-Campus - 26%

Future Rates

7/1/16-6/30/19

Research - 55%
Other Sponsored Activities - 36%
Off-Campus - 26%

These new rates will apply to new proposals and will not be applied retroactively to existing proposals or awards. The increase in the research rate is primarily due to an increase in costs for major infrastructure projects. The other sponsored activities rate and off-campus rates are unchanged.

Other changes that are effective with this new rate agreement are the revised definition of Modified Total Direct Costs (MTDC), i.e. participant support costs will not be charged F&A, and staff vacation payments at retirement or termination will now be included in the Specific Identification (SI) fringe rates.

For additional detail on MSU’s F&A Cost Rates, please visit the "Current Facilities & Administrative Cost Rates" web page on the OSP/CGA website.

Hot Topics

Upcoming Training Opportunities

The Essentials of Research Administration (ERA) series provides on-campus training and certification for research administrators and other support staff who have responsibilities for research proposals, grants, contracts pre– and post-award administrations and related activity at MSU. Please register for sessions in EBS!

11/03—ERA Elective: Hands-On Budgeting
11/17—ERA Elective: Intellectual Property
12/08—ERA Elective: Hot Topics

Summary of NSF PAPPG 16-1 Changes
Effective January 25, 2016

The National Science Foundation (NSF) has released a revised version of the Proposal & Award Policies & Procedures Guide (PAPPG), version 16-1. A summary of the notable policy changes has been posted on the NSF Sponsor Information link on the SPA website: https://osp.msu.edu/PL/Portal/DocumentViewer.aspx?cga=aQBkAD0AMQA5ADcA. Please note, these changes will be effective for proposals submitted, or due, on or after January 25, 2016. For the complete PAPPG including NSF's summary of changes, please visit: http://www.nsf.gov/bfa/dias/policy/papp/pappg16_1/
fedreg/draftpappg_may2015.pdf.

Proposal Questions? Please contact your OSP Proposal Team, based on your unit:

ProposalTeam1@osp.msu.edu
ProposalTeam2@osp.msu.edu

Post-Award Questions? Please contact the CGA Awards Group at awards@cga.msu.edu

NSF Data Analytics Audit Completeby Dan Evon, CGA

A little over two years ago, the NSF Office of Inspector General (OIG) selected MSU as part of a nationwide initiative, to try a new approach to auditing. Under this new approach, the NSF received a complete download of our accounting, payroll, purchasing and vendor systems with 3 years’ worth of all NSF transactions (~$232M). They used this information to pull selected transactions, and then sent an audit team to MSU for two separate week-long site visits. After many, many hours, and lots of documentation including helpful information from your records, the auditors issued an audit report with only one finding. Unfortunately, the one finding was for paid senior key personnel time above the two month cap, which amounted to a lot of money when you add fringe and F&A (in total ~$913K). Because the OIG interpreted the 2-month salary rule in a way that conflicts with the interpretation from the NSF policy office, MSU disagreed with the audit report. After much back and forth, and the eventual escalation to the senior NSF official for resolving audits, NSF decided to close the audit supporting MSU’s position and without sustaining any of the questioned costs! As you can imagine we are very grateful that this worked out in MSU’s favor and wanted to take this opportunity to thank you for your assistance, particularly when we were under pressure for a fast turn-around!

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Greetings from SPA/OSP/CGA!

NEW Budget Development Guidelines

Activity Logby Aimee Wilson, OSPWhat's Happening with My Grant?

Tracking, Transparency & Communication

Activity Log Viewer Guide

SPA Metrics and FAQs