Best Practices
Topics:
Backpay Issues On Extramurally Funded Projects
Question: Where can payroll charges attributed to backpay issues (e.g., raise factors, reclassifications, promotions) be applied?
Answer: Typically, the charges for backpay dues to issues such as raise factors, reclassifications, and promotions, would be applied directly to the payroll source where the individual was payrolled during the periods to which the backpay issue relates. In regard to extramurally funded projects, situations may occur where the funding source to which the backpay issue relates, is no longer available (i.e., award closed). In such a case, costs would need to be applied to an unrestricted funding source.
If a project is closed, but there is a successor award, you may be able to apply the backpay charges to the successor award. Assuming the individual to which the backpay applies is still appointed/payrolled on the successor award … as long as the individual for which the backpay is tied, was paid on the predecessor award, such can be applied to the successor award. If the individual for which the backpay is tied was jointly funded on several awards, the backpay must be allocated to the successor at the same payroll distribution level as the person was appointed to the predecessor award. If the individual is no longer paid/appointed on the project, it would still be allowable per University policy. However, be very certain to clearly document in your files information regarding the individual’s prior appointment/association with the project.
Further questions about the application of backpay charges to extramurally sponsored projects, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu or 2-3947
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Communication Costs
Per OMB Circular A-21 guideline J.9, communication costs related specifically to a project is allowable.
Costs incurred for telephone services, local and long distance telephone calls, telegrams, postage, messenger, electronic or computer transmittal services and the like are allowable.
Phone call and the other services mentioned must be specific to a project and benefit the research of the particular project. Telephone calls specific to a project and that can be documented are allowable on a grant. Examples of such would be phone charges specific to survey work, tele-conference charges for collaborators discussing research, local and long-distance charges which can be documented as specific to a project.
All other types of local telephone and yearly line rental cost are unallowable and should be treated as and indirect cost (overhead, F&A), per OMB Circular A-21 guideline F.6.b.(3) and J.18.a (4).
Items such as office supplies, postage, local telephone costs, and memberships shall normally be treated as F&A costs.
"General purpose equipment" means equipment, which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles.
There are some exceptions to the yearly line rental, but these are very specific and require documentation showing the dedicated nature of the line costs (e.g., a line dedicated for a survey, a “Center” grant to which dedicated lines are required for “Center” operations). In these cases prior approval is needed. An exception for these types of costs should be clearly recognized and requested for in the project proposal stage, detailing the specific nature of the situation. If not detailed in the proposal stage and approved as an exception at the time of application, then an exception request would be required prior to applying such costs at time of award.
Questions about costs or how best to document costs of this type, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu or 2-3947
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Criminal Background Checks
Can the cost assessed from a private vendor (e.g., HireRight) to perform criminal background checks be applied to sponsored projects (e.g., grants, contracts, agreements)?
Yes, IF... the individual hired is fully funded on the sponsored project and dedicated to the project for at least one full year*.
Note: If the individual hired is fully funded across multiple sponsored projects and dedicated to those multiple projects at the same effort levels for at least one year, the cost would then be shared financially between the multiple projects at the effort distribution levels.
This interpretation would be consistent with cost principles applied to costs such as visas and recruitment costs on sponsored projects, allowable under OMB circular A-21, and under state purchasing guidelines.
Example 1:
A scientist is recruited for Dr. Jones' NIH research award 144-ABCD.
Three individuals are ranked as possible hires.
Individual 1 -- a criminal background check is performed; an offer is made; the offer is declined.
The cost associated with individual 1 may not be assessed to Dr. Jones' 144-ABCD award.
Individual 2 -- a criminal background check is performed; an offer is made; the offer is accepted.
The cost associated with individual 2 may be assessed to Dr. Jones' 144-ABCD award.
Example 2:
A scientist is recruited for a shared position, 50% on Dr. Jones' NIH research award 144-ABCD and 50% on Dr. Smith's NSF research award.
The cost for a criminal background check on the individual hired may be assessed 50/50 to the two awards.
* If an individual resigns within the one year period, or their funding changes within the one year period, cost assessed for the criminal background check would need to be removed from the sponsored project to an unrestricted fund.
If you have questions, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu or 2-3947
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Entertainment Costs
Per OMB Circular A-21 guideline J.17, entertainment costs cannot be assessed to federally sponsored projects. “Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable.”What is entertainment? Events such as picnics, tailgate events, and lab parties are considered entertainment and are not allowed on sponsored projects. Costs for a group or individual to perform at such events are also unallowable. Taking students and visitors out for a meal with no meeting or research purpose is also considered entertainment and thus would be an unallowable cost.
During travel status it is also unallowable to claim charges for movies, ballgames, musicals, plays, etc. These events are considered to be on personal time (even if during travel status) and should not be claimed as a travel expense either as a direct expense or under the per diem cost.
Questions about costs or how best to document costs of this type, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu or 2-3947
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Meetings & Conferences
OMB Circular A-21 guideline J.32, (http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html)
Costs of meetings and conferences, the primary purpose of which is the dissemination of technical information, are allowable. This includes costs of meals, transportation, rental of facilities, speakers’ fees, and other items incidental to such meetings or conferences. But see section J.17, Entertainment costs.
Costs to host and attend (including travel) meetings and conferences are allowable costs as long as the costs are allocable to the sponsored project that will be assessed the cost. The key phrase is, the primary purpose of which is the dissemination of technical information. Travel to attend such conferences should not be placed on a sponsor project solely because conference travel is allowable. The conference needs to relate to the research goals and to the scope of the sponsored project.
Even though the costs are allowable per OMB guidelines, there may be agency specific regulations that do not allow such costs without prior approval. For example, many sponsored agreements do not allow out-of-state travel. If a research meeting is being held out-of-state, then prior approval is needed from the sponsoring agency approving assessment of costs to the sponsored project for meeting attendance. Requests for approvals of this type should route from PI to Department to College to RSP to Sponsor – the rebudgeting request template available at http://www.cals.wisc.edu/research/Forms/forms.html#account may be used for this purpose. As always, the terms of agreement should be reviewed for specifics and approvals should be verified before assessing any cost.
UW Madison also has a policy in place regarding meeting and conference expenses. Please see http://www.bussvc.wisc.edu/acct/policy/meetcon/meetcon.html for further details.
Further questions about the application of meeting or conference costs to extramurally sponsored projects, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu 2-3947.
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Proposal Costs
Per OMB Circular A-21 guideline J.38, proposal cost cannot be assessed to federal grants.
Proposal costs are the costs of preparing bids or proposals on potential federally and non- federally funded sponsored agreements or projects, including the development of data necessary to support the institution’s bids or proposals. Proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as F&A costs and allocated currently to all activities of the institution, and no proposal costs of past accounting periods will be allocable to the current period. However, the institution’s established practices may be to treat proposal costs by some other recognized method. Regardless of the method used, the results obtained may be accepted only if found to be reasonable and equitable.
Proposal cost such as writing, reviewing, copying, and mailing a proposal cannot not be assessed to a sponsored project. Per OMB guidelines, proposal costs should be treated as an indirect cost (also referred to as F&A [facilities and administration] or overhead). All costs associated during the proposal stage should be charged to unrestricted funding. It is up to the Department/Center to define a business practice of whether the cost should be the responsibility of the PI or the Department/Center.
If a proposal is successful and is awarded, no past proposal cost can then transferred to the new award. Even though the costs were associated with the award they are not deemed research related.
Questions about costs or how best to document costs of this type, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu or 2-3947
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SHIP Insurance Costs: Allowability on Sponsored Projects
SHIP is a Student Health Insurance Plan is a comprehensive insurance plan for UW-Madison students. For specific information about the plan, go here.
SHIP insurance costs are allowable on unrestricted funding.
In regard to applying SHIP insurance costs on sponsored projects, such is typically not allowable. In past inquiries to RSP, the straight forward response to “can SHIP insurance costs be applied to a federal award,” the answer would be “no.” Typically insurance costs are a component of fringe benefits. Fringe benefits are provided to individuals in accordance with institutional policies based on appointments held by the individual. Salaries/wages and fringe benefits for individuals working on the project are indeed allowable. The issue in regard to SHIP insurance costs becomes one of established institutional policies and costing principles (e.g., allocability, consistent treatment, permissibility). In general, SHIP insurance would not be allowable. Occasionally, exceptional circumstances may exist.
To evaluate issues involving SHIP insurance, the typical questions which need to be addressed for each individual include:
- 1) Student name
- 2) Visa type
- 3) Is the individual a student, visiting scholar, or other (please designate)
- 4) Who initiated the visa application — UW-Madison or other entity
- 5) If initiated by UW-Madison, what was indicated on the visa in regard to how SHIP insurance costs would be covered
- 6) What is the individual’s role on this project; will the individual be involved in other projects or dedicated to this project
- 7) What type of appointment will the individual hold What did the individual’s letter of offer indicate in regard to appointment, support, etc.
- 8) If a stipend is being provided, under what funding and on what basis
Note: It is critical that individuals who will be coming to a department under a student, visiting scholar, or other appointment, who will require SHIP insurance, and who will be working on a specific sponsored project during their appointment period – if there is an intent that costs associated with SHIP insurance be assessed to the sponsored project – that approval be granted prior to their arrival and such be documented within their visa application. It should again be noted that typically, SHIP insurance costs are not allowable on sponsored projects. However, in those cases where such might be allowable, the exceptional circumstance approval should be in place in advance of arrival/appointment.
Requests for consideration as exceptional circumstances on sponsored projects should be prepared for each individual addressing all of the questions outlined above. Submit to CALS Research Division at postaward@cals.wisc.edu — please indicate “Exceptional Circumstance Request” in the subject line.
Questions about allowability of SHIP insurance costs on sponsored projects, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu 2-3947.
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Shipping Costs
Per OMB Circular A-21 guideline J.52. Transportation costs such as shipping costs are allowable on sponsored projects (e.g., grants) when the cost directly relates to the research. You can access Circular A-21 at http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html.
Section J.52. specifically states: Costs incurred for freight, express, cartage, postage, and other transportation services relating either to goods purchased, in process, or delivered, are allowable. When such costs can readily be identified with the items involved, they may be charged directly as transportation costs or added to the cost of such items. Where identification with the materials received cannot readily be made, inbound transportation cost may be charged to the appropriate F&A cost accounts if the institution follows a consistent, equitable procedure in this respect. Outbound freight, if reimbursable under the terms of the sponsored agreement, should be treated as a direct cost.
What does this mean? Is the item being shipped an allowable cost on a sponsored project? Here are some examples for your reference:
- 1) the cost of shipping soil samples would be allowable BUT that the shipment needs to be clearly “identified”
- 2) the cost to ship results to a collaborator to be analyzed would be allowable
- 3) the cost to ship (send) out a proposal would not be allowable
- 4) general purpose shipments and correspondence costs would not be allowable and should be treated as indirect costs
The shipper (e.g., department, center, lab, PI) needs to be able to document what has been shipped and briefly explain why it is being shipped. Current UPS CampusShip and FedEx invoices do not provide enough detail. This means it is up to the shipper to provide further documentation. Does your process clearly describe what was shipped?
The Department of Food Science has a good process in place. They have created a Shipment Request form. This form has two uses: (1) it provides the extra justification needed, and (2) it can be used as the receipt/documentation if the UPS or FedEx receipt becomes misplaced. This form is available on CALS Research Division’s website here.
Questions about costs or how best to document costs of this type, please contact Sandy Fowler in CALS Research Division at sfowler@cals.wisc.edu or 2-3947
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Thesis Binding Costs
The cost to bind or copy theses is typically not allowable on federally sponsored projects. Many theses copies are made as personal copies for advisors, committee members, the graduate student and their family members. These copies are thus unallowable and should not be charge to a sponsored project.
Many departments also require graduate students to provide a bound copy for a departmental library. Library costs are considered costs that should be covered by F&A, thus the copy for the department should be paid by unrestricted funding or departmental funds. Many departments already pay for the required copy. Currently the Memorial Library and Graduate School only require electronic versions and there is no cost to submit.
It is possible that one copy could be charged to a sponsored project. To be considered allowable, the cost must be necessary to perform the project, it must be allocable, the cost must be reasonable, and allowable under the award terms. It needs to be used solely for the one project. If the thesis is going to be used as a research tool over time on other projects then the cost should be charged to unrestricted funding.
If the criteria (as noted above) are met, then an exceptional purchase request should be sent to the CALS Research Division for approval. This can be sent to postaward@cals.wisc.edu. Written justification should be kept in the award file and with the purchase documentation.
Note: Steenbock Library offers to act as a pickup and drop point for your department to send thesis binding to the UW Madison binding vendor. The binding must be ordered directly by a UW Madison department on its own account. For bindery contact information and pickup schedule call Steenbock Library Binding, 263-2047. Please contact Steenbock prior to bringing items to be bound.
Further questions regarding this topic can be forwarded to Sandy Fowler at sfowler@cals.wisc.edu or by calling 262-3947.
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Tuition Remission
In January 2007, a campus-wide policy went into effect that set the rate for tuition remission at $8,000 per year for all Project Assistant (PA) and Research Assistant (RA) appointments. See http://www.rsp.wisc.edu/policies/tuitionremission.html and http://www.bussvc.wisc.edu/bursar/remis2.html for detailed policy information. Under the new policy, questions often arise with regard to how tuition remission is allocated in situations where an RA or PA is appointed on more than one project, or how tuition remission is affected when a salary transfer is processed. As a general rule, tuition remission is allocated in proportion to a student’s appointment on a project.
The Facts:
• Tuition remission for a semester is $4000 (half of $8,000 because there are two semesters per year). Tuition remission is not charged for summer sessions*. Each semester is 4 ½ months, so tuition remission breaks down to $888.89 for each full month and $444.44 for the half month. (*you may notice tuition remission charges appearing on a project during the summer months if a salary transfer or appointment change is processed, but in general question any tuition remission charges during the summer months)
• The allocation of tuition remission is cumulative across the semester, even though a set amount is being charged monthly. Because of this, it’s possible to transfer one month of salary to another project, yet see the tuition remission charge for that month reduced by more or less than the charge that originally posted. The amount of tuition remission that moves depends on other aspects of the student’s appointment (i.e. how many other projects are they payrolled on and at what appointment percent).
• Tuition remission is tied to salary. It cannot be transferred by itself unless it is unallowable on a project. If salary is being transferred, tuition remission is also transferred.
The Math:
• To calculate the tuition remission, you first need to know what the student’s total salary for the semester will be. For fall semester this will be the total salary paid for September through the first half of January, and for spring semester it will be the total salary for the second half of January through May. Next determine how much of the total salary for the semester will be paid on each project to which the student is appointed. Then, for each project, divide the student’s salary on that project by the total semester salary. This amount (convert to) is the percentage of tuition remission that should be applied to a particular project. To figure the dollar amount take the percentage times $4000.
• Example:
Jane Smith was payrolled on projects B and C for the spring semester. Jane’s total semester salary was $6,930. She was paid $3,465 on each project, which is 50% of her total semester pay, so tuition remission was charged to each project at 50% of $4,000, or $2,000 per project. The department wants to move $400 of her March salary off project B to departmental 101-4 funds. To calculate the tuition remission that should be allocated to projects B and C after the transfer is processed:
Total salary = 6,930
Project B salary = 3,465 - 400 = 3,065
Project C salary = 3,465
% of salary on Project B = (3,065/6,930) = .4423 = 44.23%
% of salary on Project C = (3,465/6,930) = .5 = 50%
% of salary on 101-4 = (400/6930) = .0577 = 5.77%
Tuition remission on Project B = 44.23% (4,000) = $1,769.20
Tuition remission on Project C = 50% (4,000) = $2,000
Tuition remission on 101-4 = 5.77% (4,000) = $230.80
The above numbers reflect how tuition remission should be charged based on salary for the semester. Since Project B was already charged $2,000, tuition remission on this project will be reduced by $230.80 when the salary transfer is processed.
WISDM also has a great Tuition Remission Search tool that provides a clear detail of salary and tuition remission charges by student, project, and semester. To access the tool, go to Main Menu>Appointments>Tuition Remission Search.
Further questions regarding this topic can be forwarded to Sandy Fowler at sfowler@cals.wisc.edu or by calling 262-3947.