Justification Nation Part 9: The Hard Truth – A Budget Justification Is Never Fully “Approved”

A21Expenses are Not 100% Allowable Until they Are Approved by the Grants Management Specialist

The budget justification is required in order to demonstrate that the research plan and budget are closely aligned and that the proposed expenses are reasonable.

However, the investigator can propose a research plan, budget for it, and receive funding. The program officer can even approve the investigator’s activities and ideas, and encourage him or her to proceed. But the investigator can still be told that it is not possible to charge the project for expenses that were proposed (and previously “approved”) when the charges are reviewed by the grants management specialist for the award.

Why does this happen?

  1. At the proposal stage (when the institution submits the application) the institution reviews the application guidance against the science and submits what it believes to be the most compliant proposal to the agency but the agency needs to confirm that the proposal meets the guidelines.
  2. The proposal is received by the agency (if it is a federal agency) and typically reviewed by a scientific panel to be approved on the basis of its scientific merit, and whether or not the budget is appropriate to achieve the scientific aims. (Is it realistic or not – not whether the items proposed are compliant with A21.)
  3. The investigator receives approval for the application and will receive a preliminary budget review, and may be asked to re-budget (if there is a funding reduction) and at that time, some items may be found to be unallowable.
  4. The investigator will start work, and then the grants management specialist or other financial manager will work with the research administrator to evaluate certain transactions while the research project takes place. This individual, along with the university grants and contracts financial specialist, has a key role to play in the accurate financial management of your account and whether or not a charge is allowable on the award.
  5. An auditor of an award also evaluates allowable charges and has the ability to determine whether a charge can stay on the account or whether it has to be removed.

What Can A Research Administrator Do To Help Support the Justification of Allowable Costs?

  • Write complete budget justifications, don’t cut corners. (Don’t provide too much information – know the type of information required for each type of cost and be complete – in order to ensure that you can document the basis of each cost when it is needed.)
  • Maintain documentation for proposals (budgets and budget justifications) as well as proper version controls in an easy to find electronic filing system. Follow the “hit by the bus” method (if you were hit by a bus – could someone step in to your role and find everything you were working on? Would they understand the naming conventions for your files?
  • Maintain the justifications for changes, decisions, re-budgets, allocation methods, using a system that is easy to detect.
  • If you’ve dealt with any sort of issue, document how you handled it, and provide documentation for your central office.
  • Work with your central offices (sponsored research and accounting offices) to problem solve grants management questions when they arise before working with the funding agency. Develop and maintain all documentation related to the interactions related to questions related to allowable costs.

Documentation that links the science to a proposed cost – and then the decision that supports the cost and whether it is an allowable charge on the sponsored project is the end result of our activity. If there is any break in this chain – something that makes us question the allowable cost, our need to document the discussion and decision to charge the sponsored project is paramount.

Helping our investigators understand that this process is never truly complete – because their work is evolutionary by nature – is important. As research administrators, we can assist our investigators by maintaining our follow up, asking questions about the status of their projects.



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