SPONSORED PROGRAM MANAGEMENT

INTRODUCTION 

Funds for sponsored projects are awarded to the University. The funds are to be spent only for the purpose and at the level designated in the final approved proposal budget unless written approval is obtained from the sponsor. The PI is responsible for implementing the sponsored project in accordance with sponsor guidelines, hiring staff, expending project funds, and conducting the project as described in the proposal and agreed to with the acceptance of the award.  The PI is ultimately responsible for the overall success of the project, including adherence to sponsors’ guidelines.  This is emphasized and stressed to the PI, and their responsibility to both the sponsor of the project and MTSU.  The Office of Research and Sponsored Programs is the best source of information if you have any questions or if you need guidance on management of the project.

NEGOTIATION AND ACCEPTANCE OF SPONSORED AGREEMENTS

“Negotiation” is the process of formal discussion between the sponsor and the recipient institution to resolve any conflicts in scope of work, budget, or terms and conditions.  If successful, this process leads to the preparation by the sponsor of a mutually acceptable award document (grant, contract, or cooperative agreement).

 A sponsor’s program officer may contact the PI directly to discuss the proposed budget, investigator’s level of effort, and the scope of work.  Reductions in proposed budgets should be evaluated to determine whether there is a change in the scope of work.  These discussions and evaluations should be relayed to the Office of Research and Sponsored Programs.

When the award document is received, the Office of Research and Sponsored Programs will review the terms and conditions of the award for conformity with university policies and procedures.  Further negotiation between the Office of Research and Sponsored Programs, the PI (as appropriate) and the sponsor may be necessary to eliminate or revise unnecessary or inappropriate terms and conditions.

Once the award document is acceptable to all parties, the Office of Research and Sponsored Programs will have the agreement signed by the authorized university representative and will return it to the sponsor.  PI’s are not authorized to sign award documents on behalf of the University.  Award documents requiring an authorized signature and contracts must be brought to the Office of Research and Sponsored Programs with a completed Document Approval Form (this can be downloaded from the webpage of Research and Sponsored Programs)

The award document will include the dates of the budget period or other specified funding period, the amount of the funds authorized for obligation by the grantee during the period indicated, special terms and conditions binding upon the award, and an outline of all general terms applicable to the award.  Appended to the grant award document, or as an additional notification, will be a schedule for filing technical and financial reports.  Under most circumstances the award document must be received by the Office of Research and Sponsored Programs before the project can begin or anticipated funds can be expended.

Establishing an Account

After a fully executed contract or grant has been received, the Office of Research and Sponsored Programs will contact Accounting Services to obtain a restricted account number. Since Accounting Services is responsible for all financial reporting, a packet of materials is assembled that includes the following:

• Grant Notification Form that includes essential information for accounting purposes.
• Copy of award documents (for the reference file in Accounting Services).  These documents usually contain information that Accounting Services will need for billing and/or financial reporting.
• Documentation of cost-sharing.  Any cost-sharing quantified in the proposal must be documented when the award is received.  The personnel activity reporting procedures provide the documentation for contributed time and salaries.  For other funds contributed from an MTSU source or from external sources a matching account will be established and those funds will be moved into that account.  For in-kind contributions from non-MTSU sources the contributor will be asked to provide written confirmation of the contribution and the value of the contribution.

Grant Notification Form

The Office of Research and Sponsored Programs completes the “Grant Notification Form” which outlines the restricted number, and match number (if applicable), budget breakdown, and position numbers tied to the account.  To notify other offices on campus that this account has been established, the form, along with email notification, is sent to the following:  Project Director/PI, Dean, Chair, Accounting Office, Budget Office, and Human Resources Office

The e-mail will also go to all departments on campus which may incur charges to the account (i.e., bookstore, post office, print shop, LRC, payroll, etc.).

Accounting Reports

On or about the fifth day of each month, fiscal officers of grant accounts (PIs) receive monthly status reports and a report of transactions from Accounting Services.  These reports reflect income and expenditures, requisitions, orders, transfers and indirect costs charges (if applicable) that have been posted to the account through the Financial Records System.  The Office of Sponsored Programs also receives copies of these reports, which are maintained in the grant file.  These reports should be reconciled to the PI’s records.  These reports are to be reviewed to insure that charges are correct.  Report any discrepancies to Accounting Services.  If you have any trouble reading or understanding the reports, you may contact the Office of Research and Sponsored Programs.

The PI has the responsibility to maintain accurate budget expenditures/budget revisions to insure the account is not overspent.

Budget Adjustments

After the account is established, there may be a need to make a variety of budget adjustments.

Transferring Funds within the Account

During the course of the project, transactions may take place in budget categories in which there are insufficient funds.  When this occurs, the PI will need to transfer funds from other budget categories in order to cover the transaction.  The PI should first call the Office of Research and Sponsored Programs to discuss the budget transfer.

 After reviewing the balances and the policies of the sponsoring agency, the Office of Research and Sponsored Programs will advise the PI as to available options for fund transfers.  Once the decision has been made about fund transfers, the PI fills out a Budget Revision Form and submits it to the Office of Research and Sponsored Programs.  Office of Research and Sponsored Programs will review the budget revision and forward it to the Budget Office.  Because not all transfers are permissible, the PI should contact the Office of Research and Sponsored Programs as soon as he/she suspects there may be an overrun in the original budget in a particular budget category.

Budget Changes Requiring Agency Approval

As has been noted above, some budget changes can be made directly by the PI without prior approval of the funding agency.  Others, however, cannot be made until prior approval has been granted by the funding agency.

The types of transactions that require prior approval vary depending upon the agency and/or the type of agreement.  Generally, prior approval will be required for the following:

• Change in the scope of work of the project;
• Extension of the duration of the project;
• Transfer of funds into the travel or equipment categories in an amount that exceeds 25% of the original budgeted amount or $500, whichever is greater;
• Purchase of an item of permanent equipment that was not approved in the original budget;
• Purchase of any item of general-purpose equipment (office equipment, computer hardware, etc.);
• Funding of foreign travel (if not approved in the original budget); or
• Subcontract part of the work to another organization (if not approved in the original budget).

Anything included in the proposal budget initially approved by the agency is considered as having prior agency approval.

Obtaining Agency Approval

If agency approval is required during the course of the project, it must be requested and approved in writing, in the form of a letter of justification from the PI, through the Office of Research and Sponsored Programs, to the appropriate agency office.  Before the PI writes the letter of justification she/he should contact the program officer to determine if the agency would be receptive to such a request.

If a letter of justification to an agency is submitted, the letter should be brought to the Office of Research and Sponsored Programs for signature.  Most federal agencies require an institutional endorsement on requests for prior approval before they will approve them.

Requests for prior approval on budget transfers and time extensions should be made at least 90 days before the end of the project.

EXPENDING FUNDS

The purpose of this section is to explain the various forms and procedures to use when making expenditures in connection with the sponsored project.  This section will cover salaries and wages, fringe benefits, supplies and expendable equipment, permanent equipment, travel, publication costs, subcontracting, and various other expenses.

Salaries and Wages

All personnel who are paid salaries or wages from a sponsored project account, whether faculty, professional staff, clerical staff, technicians, or students must be paid in accordance with university guidelines.  Salary and wage categories and job classifications on sponsored project accounts are the same as those established for all other university employees. Therefore, salary rates must adhere to the regulations applied to all other university employees, and all faculty or staff members must be paid in accordance with their normal university salary rate.  Also, only in limited circumstances and with approval of the funding agency and the University can professional staff or faculty members be hired to work on a grant or contract if this employment results in payment in excess of 100% FTE.  The Tennessee Board of Regents has established policies on faculty and staff extra compensation and summer pay.  Contact the Office of Research and  Sponsored Programs for this information.

Appointing Individuals to Work on a Grant or Contract

All individuals working on sponsored projects must be appointed via the initiation of one of the following forms which can be obtained from the Office of Human Resource Services:

PAF – Personnel Appointment Form – This form is used to hire new personnel whether faculty, staff, or clerical

PEF – Personnel Event Form – This form is used to add personnel already employed by the University to a grant.  It is also used to hire student labor.

These forms are to be completed by the PIs with appropriate signatures and then forwarded to the Office of Research and Sponsored Programs for review. The Office of Research and Sponsored Programs will then send the PAFs and PEFs to Academic Affairs or other appropriate offices.

Graduate Research Assistants - Graduate assistants can be an integral part of a research project.  MTSU supports graduate assistants at the master's and doctoral levels.  Graduate assistants may be hired for one semester, an academic year, or a fiscal year (12 months).  For budgeting purposes, the salary of the graduate assistant and the registration fees and tuition must be included in the project.  The Dean of the College of Graduate Studies has the responsibility for the administration of all aspects of the graduate assistants/ graduate research assistants/graduate teaching assistants program.  The policy on employment of graduate assistants can be found in the MTSU Policies and Procedures Manual, Policy No. IV: 07:12.  Contact either the Office of Research and Sponsored Programs or the Graduate Office for current salary information.

Undergraduate Students - Payments to Undergraduate Students

1.      Stipend - A stipend is an award to promote the education and training of a student. There is no employee-employer relationship between the student and the University.  Stipends to students will be paid with a pay authorization through Accounting Services.  A letter will be sent to the student explaining the student's tax obligations.  Accounting Services sends a 1099 to the student at the end of the calendar year.

2.      Student Labor - Often a grant will provide funds for student labor.  These funds are used to pay students to assist the project director in completing the requirements of the grant.  This assistance could be clerical, data entry, etc.  This does imply an employer-employee relationship between the student and the University.  Therefore, a PEF must be completed.

Fringe Benefits

Fringe benefits that are paid from sponsored projects include the following:

• Employer’s share of Social Security (S.S.) which is 7.65% of salary amount.
• Employer’s share of retirement
  • State Retirement System -         10.3 % of salary
  • Optional Retirement System –   10% of salary
• Employer’s Group Medical Insurance contribution (rates as of January, 2005)
  • Single    -   $349.97 a month
  • Family   -   $866.33 a month           
  • Split       -   $521.31 a month
• Longevity - $100 per year of service at the end of the third year of service.

Fringe Benefits apply as stated below:

1.      Full time faculty and staff:  all benefits are applicable

2.      Summer Faculty:  S.S. and Retirement

3.      Extra compensation for faculty and staff:  S.S. and Retirement

4.      80% staff: S.S., insurance, and pro-rated retirement

5.      Temporary hourly and adjunct faculty:  S.S.

6.      Undergraduate students who are enrolled at least half-time will not have S.S. charged to their wages.

Estimating Fringe Benefits 

Fringe Benefits are estimated in sponsored projects proposals according to university policy.  Fringe benefits for full time faculty and administrative staff are estimated at 17.65% plus $866.33 a month for medical. Benefits for clerical are estimated at 17.95% plus $866.33 a month for medical.  However, when charges for fringe benefits are made to an agency, they are made at actual cost.  Therefore, the amount of money budgeted for fringe benefits may vary from the amount charged.  In cases where the estimated amounts are inadequate, funds must be rebudgeted to allow for actual fringe benefit charges.  Conversely, if estimated amounts exceed actual charges, excess funds may be rebudgeted to other areas of the project.

Supplies/Services and Other Costs

Purchases for goods or services costing less than $2,000.00 can be obtained without prior approval from Procurement Services.  Payment for these goods and services is done via Payment Authorization Form (obtained from Accounting Services or their website).  Goods and services costing over $2,000.00 and equipment must be approved by Procurement Services.  For these goods and services a Departmental Requisition Form is sent to Procurement Services where a Purchase Order will be initiated.

Interdepartmental Transfers

Principal Investigators can charge various goods and services provided by departments on campus.  Among these are Bookstore, Telephone Services, and Printing.  These charges will be posted to the monthly summary reports.

Permanent Equipment

Permanent equipment is defined as any item of a non-expendable nature costing $5000 or more.  For sponsored research projects, equipment is further categorized as scientific or general-purpose equipment.  Generally, before equipment can be purchased on a research project, funding agency approval is required.

All equipment purchases must be bid in accordance with State of Tennessee law and university regulations.  If the equipment must be purchased from a specific source, a justification for sole source purchasing must be attached to the requisition.

Travel

A Travel Authorization Form (TA) is required for all out-of-state trips and in-state trips where expenses are substantial.  Approving authorities (department heads) have the discretion to decide what level of expense is substantial.  Although a TA is not required for in-state travel, a travel authorization form is necessary when requesting an advance.

The president's approval is necessary when traveling to Canada.  Travel to Alaska, Hawaii, and anywhere outside the continental United States requires the chancellor's approval.  Forward travel requests for these destinations to the president's office at least 30 days prior to the expected departure date.  This will allow sufficient time to obtain written advance approval by the chancellor.

The approved budget for a sponsored project will have a Budget Object Code (3000) line labeled "Travel" if such expenditures were included in the proposal budget and approved by the sponsoring agency.  The funds in the category are to be used to reimburse MTSU employees who must travel in connection with their sponsored projects.

Travel on a sponsored project is reimbursed at approved university rates.  Check Accounting Services' web page for the latest rates.  PI’s or grant employees must complete a Travel Authorization before the trip is taken.  This form can be obtained from the Business Office or online.  The TA must be signed by the employee, project director, department chair, and dean.  If the PI is traveling, the TA must be signed by his or her supervisor.  Once travel has been completed, the employee must complete a Claim for Travel Expenses to be reimbursed for expenses.  This form can be obtained from the Business Office or online.

Subcontracts

MTSU and agency approvals are required when any portion of a research project is to be performed by an institution or organization other than Middle Tennessee State University.  With such an arrangement, a formal subcontract must be executed prior to commencement of work. The Office of Research and Sponsored Programs personnel will assist the principle investigator in writing and negotiating the contract.

All subcontracts, agreements and any subsequent amendments thereto must be signed for Middle Tennessee State University by the Vice President for Finance and Administration.

Consultants

Only in very specific circumstances can MTSU employees serve as consultants on an MTSU research project.  In such circumstances, these employees are paid through the payroll system and the usual fringe benefits apply.  Contact the Office of Research and Sponsored Programs to discuss the use of MTSU personnel as consultants.

If an external consultant is to be used, a written agreement is required.  The Office of Research and Sponsored Programs will assist the PI in preparing the contract.

ACCOUNTABILITY  

Following are several items that are related to management of sponsored projects, but which are usually not dealt with until after work on the project is completed.

 Reporting Responsibilities

Reporting responsibilities on sponsored projects fall into two categories, financial reports to the sponsoring agency (handled by Accounting Services) and technical reports (handled by the Principle Investigator or Project Director).

When a PI receives an award he/she should determine what the agency requires in terms of reporting.  It is imperative that reports are submitted in a timely manner and in accordance with the agency’s requirements.

As noted above, Accounting Services prepares all necessary financial reports.  Most agencies require that final financial reports be submitted within 60-90 days after the termination of a project.  In order for Accounting Services to meet these deadlines, it is imperative that any problems in an account, such as outstanding encumbrances, be cleared up within 30-60 days of the termination of the project.

 Inventory/Property Control

All computers and any item of permanent equipment costing $1500 or more are marked with a permanent MTSU identification number and becomes a part of the annual inventory of permanent equipment.  Title to permanent equipment purchased with funds from a grant or contract varies by funding agency.  To determine whom has title to any permanent equipment purchased on a specific grant or contract, consult the terms and conditions applicable to the grant.

Patents and Copyrights

Patentable discoveries or inventions may result during the course of research on a sponsored project.  The University has a detailed patent and copyright policy that describes the handling of patentable discoveries and the copyright of materials made by a University employee.  Please consult Policy: II: 01:08.       .

External Audits

Periodically sponsored project accounts are audited by external agencies.  All contact with external auditors concerning sponsored projects is coordinated by the Business Office.  In cases in which an audit team requires files, documentation or discussion with other campus personnel, arrangement for these discussions or information will be made by the Business Office, and usually a university accountant will review any materials and will be present at any discussion.  If a project director is contacted by an external auditor, he/she should refer the auditor to the Business Office.