Policies & Procedures – Grants
Truman State University
Fiscal Grant Policies
The faculty, staff and administration of Truman State University are encouraged to obtain external funding in the form of grants for various projects and programs. This funding allows the University to carry out its objectives more adequately and to expand and enhance the variety of opportunities available in the University community. The policies shown here should establish responsibility and accountability during the grant program.
Grants for approved research and sponsored projects are the fiscal responsibility of Truman State University and are awarded to the University. The project director/project investigator is held individually responsible by the University for the proper management of the grant and for meeting the objectives of the grant. The University will ultimately be held responsible for the overall administration of funded projects. Therefore, all funds related to grants, regardless of source, shall be administered as University funds in accordance with State of Missouri law, Board of Governor policies and University policies and procedures.
Allocable Cost: A cost is allocable to a sponsored agreement if it is incurred solely to advance the work under the sponsored agreement; it benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods, or it is necessary to the overall operation of the institution.
Authorized Officials: The President and Executive Vice President for Academic Affairs of Truman State University are authorized to accept grant funding and waive indirect costs.
Effort: The amount of time spent on an activity and is expressed as a percentage of time.
Effort Reporting: Effort reporting is a purpose mandated by the federal government to verify that direct labor changes to federally approved projects/agreements are reasonable and reflect actual work performed.
Grantee: The entity receiving the money for the grant (i.e. Truman State University). Truman State University should be listed as the grantee, not the faculty/staff writing the grant proposal because they are the Project Investigator.
Grantor (also known as Awarding agency or Sponsoring Agency): The entity giving the money for the proposed grant. This is the external funding source.
Indirect Costs (also known as overhead or Facilities and Administrative (F&A) costs): Costs associated with conducting sponsored projects that are over and above the direct costs attributed to specific projects.
In-Kind Contributions: Project costs represented by services, equipment, real property or the use thereof that is donated by sponsors other than the grant award sponsor. An in-kind contribution’s value is considered to be what the cost to the University would have been if the University had paid for the item or service itself. In-Kind contributions may also include the cost share borne by the grants subcontractor.
Mandatory Cost Sharing: Cost sharing due to a written requirement of the grantor and the ability to apply for and receive the award is contingent upon the campus’ willingness to comply with this requirement. Mandatory cost sharing requirements will often be stated in the Request for Proposal (RFP), Request for Application (RFA), or Request for Quotation (RFQ). The mandatory match may be stated as a percentage of total costs, a required dollar amount, or may be required due to limitations of costs that the grantor will reimburse, such as grantors that will not pay for researchers’ salaries.
Program Income: Income earned as a result of grant-funded activity.
Project Investigator (also known as Project Director or Researcher) for Grantee: Truman State University faculty or staff member overseeing the grant operations.
Reasonable Cost: A cost may be considered reasonable if the nature of the goods or services acquired or applied, and the amount involved therefore, reflects the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made.
Sponsored Agreement (also known as a Grant or Contract): A written agreement representing the voluntary transfer of money or property by a sponsor in exchange for the specifically enumerated performance of services, often including rights and access to results of this performance, and always including some formal financial and/or technical reporting by the recipient as to the actual use of money or property provided. The agreement is enforceable by law, and performance is usually to be accomplished under time and fund use constraints with the transfer of support revocable for cause.
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) were released on December 26, 2013. The Uniform Guidance streamlines and supersedes guidance that was previously contained in eight different OMB Circulars, including A-110, A-21, and A-133. The new guidance consists of definitions, uniform administrative requirements (both pre- and post-award), cost principles, and audit requirements.
When will the Uniform Guidance apply?
- The Uniform Guidance administrative requirements and cost principles will apply to new funding awarded on or after December 26, 2014. Some Federal agencies will also apply the Uniform Guidance to incremental funding awarded after December 26, 2014.
- Existing Federal awards will continue to be governed by the terms and conditions under which they were awarded.
- Carryover funds may or may not be subject to the Uniform Guidance, depending on the Federal awarding agency.
Purchasing Policies and Procedures
The Uniform Guidance requires full and open competition. Contractors who assist in drafting specifications for requests for proposals (RFP) must be excluded from competing for those opportunities. In addition, RFP specifications cannot have unreasonable requirements that are meant to limit competition. Also, procurements must be conducted in a manner that prohibits the use of geographical preferences in the evaluation of proposals, except in certain case where federal law explicitly requires or encourages geographic preference or when contracting for architectural and engineering services, provided that specifying geographic location leaves an appropriate number of qualified firms.
The Uniform Guidance outlines five methods of procurement:
- Micro-purchase: Purchases where the aggregate dollar amount does not exceed $3,000 (or $2,000 if the procurement is construction and subject to Davis-Bacon). When practical, the entity should distribute micro-purchases equitably among qualified suppliers. No competitive quotes are required if management determines that the price is reasonable.
Micro-purchase means a purchase of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold. Micro-purchase procedures comprise a subset of a non-Federal entity’s small purchase procedures. The non-Federal entity uses such procedures in order to expedite the completion of its lowest-dollar small purchase transactions and minimize the associated administrative burden and cost. The micro-purchase threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions). It is $3,000 except as otherwise discussed in Subpart 2.1 of that regulation, but this threshold is periodically adjusted for inflation.
- Small purchase: Includes purchases up to the Simplified Acquisition threshold, which is currently $150,000. Informal purchasing procedures are acceptable, but price or rate quotes must be obtained from an adequate number of sources.
- Sealed bids: Used for purchases over the Simplified Acquisition Threshold, which is currently $150,000. Under this purchase method, formal solicitation is required, and the fixed price (lump sum or unit price) is awarded to the responsible bidder who conformed to all material terms and is the lowest in price. This method is the most common procurement method for construction contracts.
- Competitive proposals: Used for purchases over the Simplified Acquisition Threshold, which is currently $150,000. This procurement method requires formal solicitation, fixed-price or cost-reimbursement contracts, and is used when sealed bids are not appropriate. The contract should be awarded to the responsible firm whose proposal is most advantageous to the program, with price being one of the various factors.
- Noncompetitive proposals: Also known as sole-source procurement, this may be appropriate only when specific criteria are met. Examples include when an item is available only from one source, when a public emergency does not allow for the time of the competitive proposal process, when the federal awarding agency authorizes, or after a number of attempts at a competitive process, the competition is deemed inadequate.
§200.320 Methods of procurement to be followed.
The non-Federal entity must use one of the following methods of procurement.
(a) Procurement by micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (§200.67 Micro-purchase). To the extent practicable, the non-Federal entity must distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable.
(b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.
(c) Procurement by sealed bids (formal advertising). Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in paragraph (c)(1) of this section apply.
(1) In order for sealed bidding to be feasible, the following conditions should be present:
(i) A complete, adequate, and realistic specification or purchase description is available;
(ii) Two or more responsible bidders are willing and able to compete effectively for the business; and
(iii) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
(2) If sealed bids are used, the following requirements apply:
(i) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicaly advertised;
(ii) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
(iii) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly;
(iv) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and
(v) Any or all bids may be rejected if there is a sound documented reason.
(d) Procurement by competitive proposals. The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply:
(1) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;
(2) Proposals must be solicited from an adequate number of qualified sources;
(3) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and for selecting recipients;
(4) Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and
(5) The non-Federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort.
(f) Procurement by noncompetitive proposals. Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:
(1) The item is available only from a single source;
(2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
(3) The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or
(4) After solicitation of a number of sources, competition is determined inadequate.
[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015]
Indirect (Facilities and Administrative) Cost Recovery
Indirect costs include the University’s general operating expenses that are incurred in support of sponsored activities. For example, buildings, use of equipment that is not purchased by sponsored project budgets, operations and maintenance of facilities, libraries, and administrative support costs (accounting, purchasing, facilities management, etc.).
Most funding agencies recognize the existence of indirect costs and have policies in place to provide for their funding. Truman negotiates indirect cost rates with our responsible federal auditing agency (Department of Health and Human Services), and the negotiations are based upon documented university spending on activities in support of sponsored programs. It is the University’s policy to recover the maximum amount of indirect cost allowable by the funding agency that is consistent with successful grant applications. It is the responsibility of the proposal writer to include indirect costs in the grant proposal. If the sponsoring agency does not allow indirect costs, or allows indirect costs less that Truman’s current rate, then project director must attach documentation requesting a non-standard rate and gain advance approval in writing from the President or Executive Vice President for Academic Affairs. Project Investigators do not have authority to make financial commitments to potential sponsors.
The on-campus rate is currently 41.6% of direct salaries and wages including all fringe benefits. The date of the current rate agreement is from 07/01/10 to 06/30/13. Effective 07/01/13, all rates are “Provisional,” until amended.
Contracts or grants from commercial firms are expected to provide for recovery of full indirect costs (i.e. Facilities & Administrative). Except where explicitly limited by federal statute or other standard written sponsor policy, contract or grant proposals to non-commercial sponsors must include full applicable indirect costs in the proposal budget. In some cases, sponsor policies will limit administrative costs without limiting facilities costs. In those instances, a University contribution toward the administrative costs may be made without a contribution toward the facilities costs.
Cost Sharing and Matching
Cost sharing or matching is the portion of project or program costs not borne by the sponsoring agency. Cost sharing is the process of incurring and documenting direct costs relating to a project that are not reimbursed by a sponsoring agency. Cost sharing is normally a cost paid by the University, but any funding outside of the grantor’s and the University’s funding may count as cost sharing, provided it is stated and approved in the grant proposal documentation. Two primary types of cost sharing are mandatory cost sharing and voluntary committed cost sharing, which are defined in the definition section of this policy. All cost sharing must be recorded in the University’s computerized financial system, if it is part of the negotiated grant agreement.
All matching and cost sharing resources must meet the following general criteria:
- They must be verifiable from the University’s accounting records
- They may not be included as contributions for any other federally assisted project or program in either the current or any prior period
- They must be necessary and reasonable for proper and efficient accomplishment of project or program objectives
- They must be allowable under the applicable cost principles (OMB Circular A-21). A matching contribution must be for something for which the organization or institution could have spent federal funds.
- They must be provided for in the approved project budget.
Unrecovered indirect costs may also be included as part of cost sharing and matching, with the prior approval of the awarding agency. Some sponsoring agencies prohibit this.
Cost sharing and matching met with cash outlays must be from non-federal sources and the outlay must benefit the funded project in some fashion.
For cost sharing and matching met with in-kind contributions, the University must:
- Assert a value of the service or asset provided (current fair market value)
- Volunteer Services-value at a rate consistent with those paid for similar work in the University (the rate should be based on the TYPE of work, not the skill level of the volunteer)
- Donated Supplies-use the fair market value for the supplies, but be careful to base that valuation on the condition and quantity of the assets received.
- Donated Space-use the fair rental value, established by an independent appraisal.
It is the Project Investigators responsibility to ensure that cost sharing is approved by the appropriate person during the proposal, as well as, to periodically follow up with the Grants Accountant or Supervisor regarding the tracking of cost share expenses throughout the life of the grant.
Review and Approval of Revisions of Budget and Sponsored Project Plan
Project Investigators are required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions to the sponsoring agency. Approval must be obtained from the Program Director, or other authorized official, with the grantor agency.
Prior approvals must be requested from sponsoring agencies for one or more of the following program or budget related reasons.
- Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
- Change in a key person specified in the application or award document.
- The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the approved Project Director or Project Investigator.
- The need for additional funding.
- The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the awarding agency.
- All pre-award costs are incurred at the recipient’s risk (i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover such costs).
- Programmatic reasons may require the period of performance of a grant or contract to be extended with no additional funding from the sponsor. This action is called a No-Cost Time Extension and is typically up to 12 months in length. This time extension must be requested of the sponsor. They do not happen automatically.
Truman’s Grant Director and Supervisor of Accounts Payable should be notified of any budget changes as soon as the sponsoring agency approves the change.
Verification of Allowable Costs Charged to Grants
General tests for allowable costs
Costs must be reasonable-Major considerations involved in the determination of the reasonableness of a cost are:
- whether or not the cost is of a type generally recognized as necessary for the operation of the institution or the performance of the sponsored agreement;
- whether or not the individuals concerned acted with due prudence in the circumstances, considering their responsibilities to the institution, its employees, its students, the grantor, and the public at large;
- and, the extent to which the actions taken with respect to the incurrence of the cost are consistent with established institutional policies and practices applicable to the work of the institution.
Costs must be allocable to sponsored agreements under the principles and methods provided in the Circular A-21:
- A cost is allocable to a particular cost objective (i.e., a specific function, project, sponsored agreement, department, or the like) if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship. Where the purchase of equipment or other capital items is specifically authorized under a sponsored agreement, the amounts thus authorized for such purchases are assignable to the sponsored agreement regardless of the use that may subsequently be made of the equipment or other capital items involved.
- Any costs allocable to a particular sponsored agreement may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience.
Equipment is defined as items of non-expendable tangible personal property having a useful life exceeding one year and a unit acquisition cost exceeding $5,000. For sponsored projects, items costing under $5,000 will be considered supplies, but computer equipment will still be tagged for tracking purposes. The award budget must clearly allow for the purchase of equipment before the purchase will be processed, and any equipment should be received at least 90 days prior to the grant’s expiration date.
Minimum standards for the management of equipment purchased with federal funds include the following:
The University is to use the equipment for project purposes as long as it is needed whether or not the project continues to be supported by the federal government. When not needed for the original project or program, equipment may be used in connection with other federally sponsored activities with a priority for those activities sponsored by the federal awarding agency that funded the original project. There is also nothing to preclude the use of equipment purchased with federal funds on other projects or programs which are not federally funded so long as it will not interfere with the work on the project or program under which the equipment originally was acquired. When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of the Federal awarding agency.
Equipment records must be maintained on all grant-acquired equipment and all federally owned equipment:
- Description of the equipment
- Manufacturer’s serial number, model number, federal stock number, national stock number, or other identification number
- Source of the equipment including the award number
- Whether title vests in the recipient or the federal government
- Acquisition date or date received if the equipment was furnished by the federal government and costs if purchased by the recipient
- Information which would permit the calculation of the percentage of federal participation in the cost of the equipment
- Location and condition of the equipment and date the information was reported
- Unit acquisition cost
- Ultimate disposition data including date of disposal and sale price or method used to determine fair market value where a recipient compensates the federal awarding agency for its share of the residual amount.
A physical inventory of equipment must be taken and the results reconciled with the equipment records at least once every two years. The inventory process must verify the existence, current utilization, and continued need for equipment. Any loss, damage or theft must be promptly investigated and fully documented and, if the equipment is owned by the federal government, the recipient must promptly notify the awarding agency. Maintenance procedures must be in place to keep equipment in good working order.
Program income should be used in a manner consistent with program and project purposes and should be expended in accordance with OMB Circular A-21, “Cost Principles for Educational Institutions.” Reporting of the program income is done in accordance with the requirements of the award either as an addition to the award, cost-sharing on the project, or as a deduction from the award.
It is the responsibility of the Project Investigator to verify the effort of all personnel related to his/her sponsored project.
For all sponsored projects with salary expenses, a report will be provided to the Project Investigator on a semi-annual basis to review the salary expenses and percentages charged to a particular grant since the last report. The Project Investigator should review the report and send an e-mail or a signed copy of the report to the Grants Accountant certifying that the expenses are correct or listing any corrections that are needed. If there is a correction to be made, Payroll will be notified via e-mail.
This quarterly certification form is required by OMB Circular A-21 as a means of documenting 100% effort for those personnel whose salary or wages has been either directly charged to grants and contracts, paid from other funds where it has been identified as cost sharing, or paid from other federal sponsored funds.
A cost overrun occurs when the total costs recorded in the grant fund (4-digit identifying number for the grant project) exceed the total budgeted for the project period. If future funding has been awarded, and this is only a matter of timing, no action is necessary. If the overrun is determined to be an error, the excess expenditures need to be identified and transferred to another fund, such as a University department, which will be identified by the Office of Academic Affairs.
The Project Investigator is primarily responsible for monitoring the grant to ensure that cost overruns do not occur and if they do he/she is responsible for initiating corrective action. The Grants Accountant or Supervisor will monitor the grant fund and notify the Project Investigator if they are near or at their budget limit. However, the Project Investigator should reconcile their expenses with the University’s financial system on a monthly basis because they are ultimately responsible for grant staying within its budget.
Reconciling Grant Funds
All financial activity related to a sponsored project shall be reconciled on a monthly basis to ensure that expenditures and revenues are within appropriate limits and guidelines. All expense corrections should be made within 90 days of the activity date. Contact the Grants Accountant or Supervisor to make corrections. More information on limits and guidelines can be found on the appropriate grantor agency websites and in the OMB A-21 Circular.
Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of submission of the quarterly or annual financial report, as authorized by the federal awarding agency.
- When litigation, claim, or audit is started before the expiration of the three-year period, records must be maintained until everything is resolved and final action is taken. Records for real property and equipment shall be retained for three years after final disposition.
- Indirect cost (F&A) rate proposals, cost allocation plans, etc. may have three-year retention periods with different start dates if the rates are, or are not, submitted for negotiation
- Technical and programmatic data (research data) is typically defined as information, regardless of form or the media on which it may be recorded, including computer software. In practice, scientific data generally is defined to include material contained in laboratory notebooks or other media such as computer disks and machine printouts and includes both intangible data (ex. Statistics, findings, conclusions) and tangible data (ex. Notebooks, printouts). Retention of this data is generally delegated to the Project Investigator. The Project Investigator should hand over this data to the University if they leave the institution.
Questions about this policy should be addressed to the Grants Accountant (Terrie Howard) or Accounts Payable Supervisor (Angela Carron). Individuals wishing to recommend changes to the policy should contact the University Controller.