Ask an expert: tips and tools of the trade.
The editors of The Journal of Research Administration are excited to announce the addition of a new column called "Ask an Expert: Tips and Tools of the Trade." The author, Chuck Chermside, CRA, has been a highly involved member of SRA (and many other professional societies) since 1969 and retired last year from serving as director of Sponsored Programs Administration at Virginia Commonwealth University for 22 years. This new column will consist of questions and answers on a wide range of topics in research administration and is guaranteed to be interesting and thought-provoking to research administrators just starting out in their career, as well as for more seasoned administrators. Chuck has compiled these frequently asked questions over many years and has presented them in part at both the international and Southern Section meetings. Some of them clarify regulatory policy while others offer seasoned advice on how to handle many of the situations we face every day. The new column will be a welcome addition to our growing Journal.
1. "Patient-Care" costs
Q: My question concerns "patient-care" costs. At our university, "patient-care" costs are defined by function and whether the function is being performed by our affiliated hospital, and not by whether there is truly any element of patient care involved. The following example will help. If we draw blood from a research subject who is not receiving treatment as a patient and the blood is analyzed in a laboratory of our affiliated hospital, that is considered to be a patient-care cost. But if the blood is sent to an outside laboratory for analysis, it is not patient care. We have the same situation with MRI scans. If they are done in the affiliated hospital facility, they are considered patient-care costs even when the individual's only association with the university and hospital is as a research subject.
A: "Patient Care" has a unique and not obvious meaning in budgeting/costing under A-21 cost principles. This category of costs is intended to cover those costs from the institution's health care delivery system that are priced to include the health care system's F&A costs. It would be inappropriate to "double charge" for F&A costs on the same good/service within the organization. Health care system costs are expected to, and should, include their F&A costs in their pricing to all comers, so that the pricing is equitable. Therefore, for all practical purposes, the definition of "Patient Care" is that group of object codes in your accounting system that cover services through the health care system that is part of, or associated with, your institution. This also clarifies why patient-care costs do not earn F&A. This definition is not easily understood by those unfamiliar with how F&A costs are calculated and levied. "Patient Care" has a much broader meaning to most individuals involved in delivering health care, so watch carefully for its correct use.
2. Little or No Effort Proposed
Q: A PI or Co-I will have zero effort on a proposal or, perhaps 1% effort on a $1 million project. What should you do?
A: Zero effort is hard to justify, but might be acceptable in some cases, for example, a nominal PI proposing ex officio, e.g., a department chair on an institutional training grant. Low effort on a big project is similar; it is acceptable only if it is clearly realistic. The thing to avoid is "larding" a proposal with "big names" in hopes of attracting funding. Proposers should realize that reviewers, too, are aware of this ploy and look on it with disfavor. Of course, you should differentiate this from proposing 10% of a leader's time and requesting only 1% paid by sponsor, which results in cost sharing of 9%. Also, institutional and sponsor policies about how much of a PI's effort may/should be charged vary. Note that NIH policy states that zero effort or as-needed effort for key personnel is not acceptable.
3. Human Subjects Not Flagged
Q: The proposal involves human patients, but human subjects is not flagged on the internal approval sheet or application. What should you do?
A: Clarify with the department or PI. More often it is departmental error or PI failure to understand, in which case it should be corrected before moving the proposal forward. Ideally, academic management (department and dean) will catch the error before the central office sees it. If human subjects are involved, the internal approval sheet and electronic record should at least be marked "IRB Pending." IRB approval usually needs to be completed before an award is issued, and the sponsor will require certification before completing the award process, for example, during the NIH Just-In-Time process. Sometimes an award will be made without IRB approval, but the award is made with restricted terms and human research activities cannot start without approval; in this case, special effort must be taken to ensure everyone knows of the restriction.
4. "Exempt" Human Subjects
Q. Are any situations exempt from human subjects regulations?
A. The six categories specified at 45CFR46.101(b) cover the six categories of human subjects research exempt from IRB review because they present minimal risk to the subjects. Some institutions allow the PI to make that determination. Others require the central human subjects protection system to concur with the PI's judgment because a greater risk might exist than is perceived by the PI.
Q: The proposal refers to an infectious disease in another country. The Biohazard Committee has been notified, but it is not clear how the faculty here will get the infectious materials. What should you do?
A: Clarify before approving the proposal. Use the biohazard expertise of your faculty as a resource. The institution cannot accept the risk that the PI will do something contrary to regulations or institutional safety practices. Usually you will discover that the PI meant well but did not know the regulations or processes. A little education goes a long way, particularly if the PI understands the personal liability of violating regulations.
6. Confusing or Incomplete Proposal
Q: Some aspects of the proposal do not seem consistent and the proposal is a bit confusing. It is directed to a private for-profit. What should you do?
A: All aspects of the proposal must be internally consistent. The institution, as represented by authorized official, must be assured that everyone clearly knows the scope of work and the deliverables and also that institutional resources are being used appropriately. It is preferable for a departmental research administrator to resolve these issues before sending the proposal forward, but we all know that there may be political reasons why the departmental RA cannot insist on clarification, so the central RA may have to be the "heavy." Sometimes this situation arises because the PI and the sponsor know, from extensive discussions, the details of the proposed project and don't realize the written proposal doesn't make sense. Other times it can be a signal that something really inappropriate is being considered.
7. Administrative Costs in the Proposal
Q: Administrative personnel, postage, and office supplies are included in the direct costs on a federal proposal. What should you do? Suppose it is a proposal for a foundation grant, or for a for-profit contract, or for a subcontract with a federal prime?
A: If the proposal is federal or a federal flow-through, for example, A-21 states that you should make sure the proposal justifies these costs in relation to the conduct of the specific project. For example, postage is seldom appropriate for a laboratory research project (except shipping samples) but is critical and costly for a mail survey project. F. 6. b. was written to prevent the abuse of allocation of departmental administrative costs across all the grants in a department. Therefore those administrative costs that are necessary to the project and not merely incidental should be carefully identified and justified in the proposal and justification. Federal sponsors have pushed the limits as a way of cutting their costs, so you must justify your needs very carefully. Many people expressly use the term "project costs" to emphasize their need. Foundations seldom pay full F&A, so any direct recovery of these costs makes sense, if the sponsor will accept it. For-Profits should always pay the full amount. Also, be watchful that overly cautious accountants do not try to comply with F.6.b. by prohibiting all costs in these categories automatically.
8. Confusing Proposal Budget
Q: The budget is 21 pages long, with many sections and subsections. At first glance, the numbers do not tie together or seem consistent and it is hard to tell if the $3 million total is accurate. What should you do?
A: The sponsor's reviewers must understand the budget, as well as the institution. The budget figures MUST all add up. You should require appropriate summaries with references to detail backup. Be very clear about which detailed budgets are assembled as line item costs and which are program effort costs. However, remember that a proposal budget is part of a "sales" document. Some reviewers will want to see line item budgets, and the institution will too, as the institution records costs that way. However, some reviewers will want to see program segment costs; for example, the survey will cost $X, the analysis will cost $Y, the evaluation will cost $Z. If you have budgets organized both ways, make sure that they both add up to the same total. Carefully selecting phraseology to provide maximum flexibility--the word "approximately" is useful, especially on program-based budgets--can help if you cannot get the dollars to balance exactly.
9. Cost Sharing Commitments
Q: The cost share has not yet been secured, so what should you do when submitting the proposal? And what should you do when you receive the award?
A: Proposal: Mandatory and committed cost sharing (these terms mean the same thing with federal or non-federal sponsors) require internal commitments from individuals with the budgetary authority to commit funds, unless the proposal is specific that cost sharing is being sought but not yet in hand. Central reviewers should always insist that a commitment for cost sharing is documented. Nothing is more disastrous to a project than to make a commitment for cost sharing in the proposal and then find at the time of award that the promise has evaporated.
Award: Read the terms of the award and act accordingly. The award may require that the proposed cost share is actually spent, or it may merely encourage cost sharing. If cost sharing is required and not met, the award will not be fully paid, and someone is responsible for those costs. In my experience, usually the department is responsible for these funds, so the chair needs to be brought into discussions about setting up the award, limiting parts of it, or whatever best fits the circumstance. Chairs hate surprise costs so keep them informed when any uncertainty exists.
10. Effort Commitment Over 100%
Q: The PI is committing 120% total of her time across four different proposals, at 30% effort each. What should you do?
A: No one has successfully cloned PI's so make the department(s) involved adjust or plan for a total of 100% effort. However, a proposal is not a sure thing until it becomes an award. If this PI has four proposals under consideration, consider what is the likelihood of funding for each. Have a plan in case all the wishes come true. For four federal grant proposals at 30% each, the PI could drop the effort commitment to 25% each without needing to go back to the sponsors for permission. If the proposals originally committed 50% each, you would need to negotiate with sponsors and perhaps decline one or more awards. Effort planning is a departmental or school issue, even though the central office may be where the problems are observed.
11. Cost Sharing
Q: The proposed cost share on a federal proposal appears to come from effort on other federal funded projects, and they also have cost sharing requirements. What should you do?
A: You cannot cost share against federal funds with other federal funds. (This does not preclude noting that project X and Project Y are mutually supportive but not offered as cost sharing.) Nor can you count any dollar, including effort, as cost sharing for more than one cost sharing requirement. The question sounds like it presupposes several separate awards that add up to a broad project, with cost sharing required for each. This is simple in theory, even if complicated to administer: Set up a plan for all awards with clear indication of the source of cost sharing for each, ensuring no overlap. By the way, a $10K foundation grant might meet two separate $5K cost sharing requirements for a federal grant, but you should document carefully. Don't forget that cost sharing must occur during the course of the funded project unless other arrangements are clearly agreed in writing.
12. Foreign Travelers
Q: The proposal includes bringing foreign travelers into the U.S. for meetings. What problems would you face?
A: There are several headaches here, but all can be cured. Most are departmental, but a central office may have special knowledge that is applicable. Will making the travel payments cause difficulties? State universities have at various times had state travel regulations that cause problems, such as making payments to individuals without a social security number. Does the award require using U.S. Flag carriers? Sometimes it is easier for the institution to buy travel tickets and arrange and pay for housing. Watch out for little complications such as state universities not wanting to buy tickets for any person not an employee. A real kicker is ensuring that individuals are not blocked from traveling to the U.S., or that you do not send funds to blocked countries or individuals; refer to the U.S. Treasury Office of Foreign Assets Control at http://www.treas.gov/offices/eotffc/ofac/ sdn/index.html. Visas are generally the traveler's responsibility, but don't buy non-refundable tickets until you know the visas are in hand. Your International Students office may have advice on visas, and remember that the time needed to obtain visas has increased since 9/11.
13. Equipment Going to A Foreign Country
Q: The proposal includes taking equipment to another country. What do we need to watch for?
A: Problems involve whether the equipment will stay in the foreign country or not, so make sure the proposal/award clearly specifics. And when purchasing the equipment, make sure if it is to stay in the foreign country that title vests there; you don't want an auditor looking for it in your office. Find out about customs costs and whether equipment can be returned to the U.S. Some countries have specific customs regulations. Find out about how to get it there. Often carrying it as personal luggage, even at an extra cost, is the most efficient and secure. The foreign location can be critical in regard to all this. Also review carefully if these arrangements will violate ITAR or EAR.
14. Reduced F&A
Q: The PI wants to reduce the F&A costs on a proposal. What should you do?
A: What is the PI's reason? "To be competitive" is often a PI misconception, or a decision/precedent the institution does not want to make. "Sponsor prohibits/limits" may fit within your institutional policy, especially if the sponsor is a foundation or voluntary health agency. For a commercial sponsor, you create the problem that receiving less than the full cost is a private for-profit subsidy of the institution; this is not acceptable for a state institution. Basically, this is an academic management question but administrators should have clear policies to guide them, which include requiring special attention and approval from academic managers on a case-by-case basis.
15. No-Cost Extension
Q: The PI wants a no-cost extension and sends you an email saying that the sponsor has already approved it. What should you do?
A: You must require the PI to follow sponsor and institutional policy. Usually a no-cost extension requires formal sponsor approval through their grants office, but some federal agencies allow the PI to obtain approval directly from the program officer. In all cases, document the approval in writing. This may be done by email, but it must be between the authorized officials of the sponsor and the University. Exceptions include the Department of Education, which deals with the PI, and NSF, which allows approval from the program officer. E-mails will document the request and approval.
16. When to Set Up an Award Account, Part I
Q: The PI wants an account set up for an award she claims was issued three months ago. The agreement, when you see it, refers to the budget and scope of work in a proposal dated nine months earlier, but you do not have a copy of the proposal. The PI has not provided the proposal and is going back to the sponsor and the federal prime to complain. What should you do?
A: Let the PI complain. The institution must have the award in hand before setting up an account, and as the proposal is referred to and made part of the award, you must have a copy. In fact, you may want confirmation from the sponsor of the proposal text; it is perfectly reasonable to ask the sponsor for a copy of the text they are referring to, if no institution-approved proposal was submitted to them. An underlying question is why the proposal wasn't routed properly so that your institution had a copy. It might be worth touching base with the chairman or dean suggesting that this PI is drawing ill will upon the institution by avoiding normal procedures. Be sure that you are not simply missing copies of the approved activities.
17. When to Set Up an Award Account, Part II
Q: The PI wants to start work now, on the proposed start date, but the award has not come in yet. What should be done?
A: It depends on the likelihood of getting the award. Most institutions have a system for setting up pro-spending accounts prior to award receipt with a guarantee by an academic budgetary authority for costs not covered by an award. At times that budgetary authority might rely on a central office's note, such as: "This award is in negotiation and will be awarded with a start date of XX. YY days pre-award costs allowable."
18. Reporting by Individual Subject
Q: The award documents ask for reporting by the PI at the individual subject level. What should you do?
A: You could refer to the IRB or Research Subjects Protection office for guidance. In particular, consider whether that individual subject data reporting is isolated from personal identifiers of the subjects. Also consider the experimental design and what summarizing or aggregating conclusions will be drawn. A clinical trial requires that each subject's de-identified record be submitted; in fact, if it is a multi-site clinical trial, your PI will not provide aggregated data. The situation might call for special negotiation by the central office. In some cases you might tell the sponsor that the PI will be unable to comply. Most sponsors will ask for this only if there is some reasonable need because they know the rules as well as we do. I have had an unusual situation where personal identifiers were necessary (evaluation of individuals), in which case we made special arrangements regarding the confidentiality of results and reports and of review and approval of publications for methodology to ensure that the published data avoided any individual identifiers.
19. Project Cost Deficit
Q: The project is in a deficit with more expenditures than the sponsor budget, and the PI wants to move cash from another grant to this one. How do you resolve this?
A: First, never move cash between accounts. The proper way to resolve a deficit is to move expenses off the account that is in deficit. PI's frequently don't understand this. Certainly, you cannot move costs that are unrelated to the project receiving them. The institution should have policies regarding documentation for cost transfers, and often that includes a time limit. After-the-fact transfers should never be a way to cover inattentive project management. If an individual shows consistent mismanagement, the chair should know about it (often informally and unofficially). Cost transfer policies might be set up so that the chair knows about them and can determine that the investigator is not a good fiduciary manager. Be aware that the most recent NIH Grants Policy Statement has tightened language regarding transfer of costs solely to avoid cost overruns, but it also has language making it easier to declare two or more grants "closely related work."
20. The Disappearing PI
Q: The PI has gone to another institution and you were not notified. What should you do with the partially used award?
A: For cost reimbursable agreements, you often relinquish the award, close the account, and transfer the unobligated funds back to the sponsor. You can also negotiate a change of PI, but if you do, be sure the new PI has all the records from the prior PI. If it was a fixed total cost agreement, it should have a clause that reverts it to a cost reimbursable agreement on early termination. If it was fixed unit cost, you should negotiate to be paid for all units delivered. If it was fixed price and all deliverables were met, the balance belongs to the institution. If all costs were charged to the account (i.e., PI did not "bootleg" costs elsewhere) it is the institution's choice if the funds move with the PI. Too few institutions have a policy requiring departing faculty to get clearance from Sponsored Programs before leaving.
Author's Note: This series of questions and answers grew from presentations at the SRA-Virginia and SRA-Southern Section meetings. Most apply to university research administration. I am indebted to Kobby Hoffman, AICP, CRA, University of Virginia, for a number of questions, and to many members of the RESADM-L@HRINET.ORG mailing list for the rest. Note that solutions may involve both pre-award and post-award matters, and range from a department to central sponsored programs office or even institutional policy. I have tried to be explicit when expressing opinion. If I have failed, please excuse the arrogance!
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|Publication:||Journal of Research Administration|
|Date:||Jul 1, 2004|
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