Purpose

To describe the processing of pre-award costs, budget changes and no-cost extensions for sponsored programs funded by various federal agencies. To identify the federal agencies who have granted OSU expanded authority.

Applicability

Applies to grants and cooperative agreements, but does not apply to contracts. To determine whether an agreement is a grant, cooperative agreement, or a contract either of these banner screens can be used:

FTMFUND – if the predecessor fund ends in a five, it’s a contract.
FRAGRNT – if grant type box is “C”, it’s a contract. If grant type is a “G”, it’s a grant. If grant type is “A”, it’s a cooperative agreement.

Note: There are other grant types that are not covered under expanded authority.

Background

Several federal agencies have adopted expanded authority policies that waive the normally required sponsor prior approval for specific actions.  Expanded authority is intended to reduce overhead costs, increase research productivity, and reduce paperwork.

Definition

Expanded Authority

The authority granted to OSU that waives certain prior approval requirements by a federal sponsoring agency.   Expanded authority is used only for changes that are necessary for the completion of the project within its original scope and original total budget.

Prior Approval Requirements

A Sponsoring Agency's requirement that the Agency approve changes prior to the change occurring.

Policies and Procedures

Federal agencies that have given expanded authority are:

ONR – Office of Naval Research (except no-cost extensions)

NASA – National Aeronautics & Space Administration

NSF – National Science Foundation

USDA/NIFA (formerly CSREES)  Note: Expanded Authority has been delegated for NIFA (formerly CSREES) only, not all branches of USDA.)

US-Ed – US Dept of Education

NIH/PHS – National Institutes of Health/Public Health Service

NOAA/US Dept of Commerce – Nat’l. Oceanic & Atmospheric Administration  

Note: Expanded Authority has been delegated for NOAA only, not all branches of US-Dept. of Commerce. No rebudgeting direct for F&A or vice versa, unless noted in special terms and conditions.

DOE – US Dept of Energy

EPA – Environmental Protection Agency

ARO – Army Research Office

DOT - Department of Transportation  

AID – Agency for International Development

BUDGET CHANGES

A reallocation of budget line items may be requested.  For agencies who have granted expanded authority, such changes are accomplished by a budget JV using journal type 1PBB - include proper justification in the text field; the Office of Post Award Administration (OPAA) must approve the JV. 

PRE-AWARD COSTS

Normally, expenditures may not be charged against sponsored programs before the effective date of a sponsored agreement. However, some federal agencies allow requests for pre-award expenditures to be reviewed and approved within OSU via expanded authority.

NSF, NASA, USDA-NIFA (formerly CSREES), NOAA, NIH/PHS, AID, ARO,DOE, DOT, EPA, US-ED and ONR: Approval may be granted for expenditure of funds up to 90 days prior to the expected start date of a new grant or cooperative agreement. Advance funding must be necessary for the effective and economical conduct of the project.  Pre-award costs will not be approved unless a Department Head/Chair or a Dean/Director guarantees to reimburse the university in the event the grant or cooperative agreement is not received.  Request pre-award costs using Pre-Award Cost form. 

ALL OTHER AGENCIES OR SPONSORS: OSU is not authorized to approve pre-award costs for other agencies. However, it may be possible for OPAA to set up a “pending index” for awards anticipated to be funded, but for which the award document has not yet been received or fully executed. See GCG 105: Cost Accounting Standard Guidelines, #4 in Grants & Contracts section.

NO-COST EXTENSIONS

NSF, NASA, USDA-NIFA (formerly CSREES), NOAA, NIH/PHS, AID, ARO, DOE, DOT, EPA and US-ED: OSU, via expanded authority approve a one-time no-cost extension of up to one year beyond the original expiration date.  The request must be submitted to OPAA at least 30 days prior to the expiration date of the project.  OPAA must notify the agency at least 10 days prior to the expiration date of the project. Review of request will consider summary of progress, estimate of funds remaining, and plans for the completion of the project. Complete the OPAS/No-Cost Extension form and submit to the OPAA Grant Accountant responsible for the specific agency. 

Examples of when such an extension may be requested are as follows:

1. additional time is required to assure completion of the original approved objectives; or
2. continuity of grant support is required while a competing application is under review; or
3.  extension is necessary to permit an orderly phase out of a project that will not receive continued support. The fact that funds remain in the grant is not in itself justification for a no-cost extension.

Specific for: USDA - NIFA (formerly CSREES): up to a maximum potential award period not to exceed five years. The award period will commence as of the effective date cited in the grant; however, if OSU has elected to charge allowable pre-award costs under the grant, the award period will commence, for the purpose of determining the beginning of the maximum potential five year award period, on the date the first pre-award cost is incurred.

Specific for ONR: Complete the OPAS/No-Cost Extension form and forward to the OPAA Grant Accountant for review and processing.  Upon approval, the Assistant Director of Business Affairs/OPAA will forward the request to ONR via e-mail.

No cost extensions cannot be processed under expanded authority if the award is past the end date.  The OPAS/No-Cost Extension form must be completed and the request for extension must be made by the PI, in writing, on letterhead. The letter should be signed by the PI and include a blank line so that it can be countersigned by the Assistant Director of Business Affairs/OPAA.  OPAA will forward to the sponsoring agency.

EXAMPLES OF CHANGES NOT COVERED UNDER EXPANDED AUTHORITY (written agency approval is required to do any of the following):

• Changes to student support 
• subcontracting any portion of the scope of work
• Construction   
• Change in scope of work
• increasing funding levels
• Change of PI - See website for Sponsored Programs for form.  

All persons associated with a sponsored project are responsible for knowing the applicable regulations, principles, standards and policies.  These may include federal polices as well as sponsor, State of Oregon, Oregon University System (OUS), and Oregon State University (OSU) guidelines.   These include, but are not limited to, the following:

104-01 Office of Management & Budgets (OMB) Circular A-21 Cost Principles for Educational Institutions 

This Circular establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. The principles deal with the subject of cost determination, and make no attempt to identify the circumstances or dictate the extent of agency and institutional participation in the financing of a particular project. The principles are designed to provide that the Federal Government bear its fair share of total costs, determined in accordance with generally accepted accounting principles, except where restricted or prohibited by law. Agencies are not expected to place additional restrictions on individual items of cost. See OMB Circular A-21 (Adobe .pdf document) on Cost Principles for Educational Institutions.

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104-02 OMB Circular A-110 Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations 

This Circular sets forth standards for obtaining consistency and uniformity among Federal agencies in the administration of grants and cooperative agreements with institutions of higher education, hospitals, and other non-profit organizations. For additional guidelines see OMB Circular A-110 on Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education

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104-03 OMB Circular A-133 Audit of Institutions of Higher Education and Other Non-Profit Organizations 

This Circular is issued pursuant to the Single Audit Act of 1984, P.L. 98-502, and the Single Audit Act Amendments of 1996, P.L. 104-156. It sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of states, local governments, and non-profit organizations expending Federal awards. For additional guidelines see OMB Circular A-133 on Audits of States, Local Governments, and Non-Profit Organizations 

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104-04 Federal Acquisition Regulations (FAR)

The Federal Acquisition Regulations system is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies. FAR applies to contracts.

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104-05 OREGON UNIVERSITY SYSTEM-FINANCIAL ADMINISTRATION STANDARD OPERATING MANUAL (FASOM)

FASOM covers basic accounting principles of OUS and is now being integrated into the OUS Fiscal Policy manual.

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104-06 OSU FISCAL OPERATIONS MANUAL (FIS)

The FIS Manual provides the user with policies and procedures applicable to accounting-related transactions at the university. The fiscal policies and procedures apply to all university departments.

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104-07 COST ACCOUNTING STANDARDS BOARD (CASB)

The CASB was created by Congress to establish accounting rules and regulations. The Cost Accounting Standards (CAS) Handbook may be obtained by contacting the Office of Post Award Administration at 737-4711.  The CAS most applicable to OSU are:

CAS 501 – Consistency in Estimating, Accumulating, and Reporting Costs by Educational Institutions.
This standard requires that cost accounting practices used for estimating costs in proposals be consistent with the cost accounting practices used in accumulating (recording) and reporting costs. The standard is designed to provide a basis to compare proposal cost estimates with the actual costs. In its simplest terms, the standard requires that if costs are included in the project proposal, they must be accounted for as project costs; this includes cost sharing. When salaries are charged, effort reports must tie with accounting records (including any cost transfers), with proposal budgets, and with all progress reports to the sponsor.

CAS 502 – Consistency in Allocating Costs Incurred for the same Purpose by Educational Institutions.
This standard deals with consistency in accumulating like costs incurred for the same purpose. It requires that each type of cost be allocated only once, and on only one basis to any contract or other cost objective. The institution must identify which costs are charged (1) only as direct, (2) only as indirect, or (3) both as direct and indirect. In its simplest terms, the standard requires that cost coding must consistently identify like costs in like circumstances as always direct or always indirect. If a contract is charged directly for a cost, the same type of costs should not be in the F&A rate, and vice versa.

CAS 505 – Accounting for Unallowable Costs – Educational Institutions.
This standard contains guidelines on consistency in identifying unallowable costs and how they are treated within the cost accounting system. The standard does not provide additional guidance on what is unallowable; educational institutions will still follow OMB Circular A-21. In its simplest terms, the standard requires that costs expressly unallowable under OMB Circular A-21 or mutually agreed to be unallowable under terms of the agreement must be identified and excluded from any billing, claim, application, or proposal applicable to a sponsored agreement. Detailed records should establish and maintain visibility of identified unallowables, including allocation and cost accounting treatments.

CAS 506 – Cost Accounting Period – Educational Institutions.
This standard requires that the cost accounting period and all costing information (both direct and indirect) is based on the same period as the institution’s fiscal year. For OSU that period is July 1 to June 30.

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Cross Reference

See GCG 407: Reference Websites for specific agency information and other website references.

Applicability 

Persons in Oregon State University (OSU) departments who work with financial aspects of sponsored projects – principal investigators, project directors, accountants, and others. 

Procedure 

All Funds:

1. Deposit all income in the same index that is used to accumulate the related expenses of the activity.
2. Charge all fund raising and public relations costs to State funded indexes identified as “Development”.
3. Keep track of all “Lobbying” costs. All trips to Washington, DC are suspect.
4. Use the correct Account Code to record expenditures.
5. Move State budget to index where costs are incurred; don’t move cost to budget.
6. Record cost sharing or matching expenditures in the cost share index associated with the project.
7. Complete Space Inventories accurately and promptly.
8. Cooperate in completing Equipment Inventories accurately and promptly.

 

Grants and Contracts:

1. Budget for all project costs in proposals. See outlined instructions listed in the Proposal Process webpage on the Research Office Website.
2. Budget for and pay GRA tuition/fees on grants (unless specifically unallowed by the sponsor).
3. Request a 90-day OPAS pre-award through the Office of Post Award Administration in those cases where justification exists for starting the project prior to the award date.
4. If agency does not allow pre-award costs, submit a pre-award memo to the Office of Post Award Administration to establish a pending index/fund to account for costs incurred if official award document has not been received.  See GCG 103: Expanded Authority -  Budget Changes, Pre-Award Costs & No-Cost Extensions.
5. Read the award documents so you are aware of all restrictions and reporting requirements/deadlines
6. Pay all allocable project costs on applicable grant index.
7. Make any cost transfers timely and before the project end date. Labor Distribution forms and JV’s both require justification if transfers are retroactive. See GCG 209-08: Cost Transfers/Redistribution. 
8. Prior to submitting subcontractor charges for payment, review invoices for incurred costs in relation to approved project activity and progress.    
9. Initiate project budget changes if necessary and when the agency allows. Use JV journal type “1PBB”. Include proper justification in text of JV.
10. Complete quarterly Effort Reports (PAR forms) required under OMB Circular A-21. Ensure that any change in effort is reflected and is processed through payroll on a revised Labor Distribution form.
11. Complete all progress and final reports called for in the award documents before required due dates.
12. Request a no-cost extension either using OPAS system through the Office of Post Award Administration or directly to the agency if the project cannot be completed by the current end date.  Requests need to be made 45 days prior to end date.

All Funds:

1. Do not promise to make donations – either from State, Federal or sponsored funds. Donations are unallowable.
2. Do not charge proposal preparation costs to grant indexes. Such costs are departmental costs.

Grants and Contracts:

1. Do not pay for administrative support (e.g. clerical, accounting) directly on a grant, unless included as a specific line item in the proposal budget approved by the sponsoring agency. Administrative support refers to type of duties regardless of pay account code.
2. Do not charge telephone unit or line costs to a grant. Only long distance costs are allowable as a direct cost.
3. Do not pay utility costs on grant funds unless the project is at an off-campus location and utility costs are specifically budgeted.
4. Do not pay subcontract invoices unless budgeted and the researcher has assured that the subcontractor is providing the project deliverables as defined in the scope of work.
5. Do not pay for subscriptions or memberships on grant indexes. Unless they are directly related to the project.
6. Do not make expenditures that are not included in the approved budget. Be particularly aware of equipment, international travel, subcontracts and participant support/stipend costs.