Capitol Hill Showdown: What Will October Bring?

preparationI don’t know about you, but when I’m working on an application deadline, I’d like to think about helping my investigator submit a quality application – not whether the government will be open for business to accept the application on the due date.

Unfortunately, it’s mid-September, so that means our elected officials are squabbling again about whether or not they’d like to fund the federal government through the end of the calendar year.

Unfortunately, this political tango has very real consequences for scientific research – both the currently funded kind, and the research in-need-of-support kind. And for this go-around, we have another hurdle to face with an anticipated battle over the definition and scope of the debt ceiling. Our national legislators are seeking to tie this discussion to other mandates, such as reducing or eliminating funding for the Affordable Care Act, or adjusting the terms of sequestration. Regardless of the outcome, the effect is likely to create uncertainty in federal agencies, and if it goes on too long, could lead to belt-tightening.

This drama is likely to play out during the last few days of September, when Congress considers legislation to fund the President’s 2014 budget, or not. For the past 5 years, we have funded the government on continuing resolutions, which are a series of appropriations bills that have passed both houses of Congress and been authorized to fund the nation’s work for a period of time (from weeks to months, to a year). These appropriations bills are sometimes cobbled together and approved in chunks.

After we pass the first hurdle of keeping the government running (and can submit our applications), we must address the debt ceiling hurdle – which has a decision deadline of October 15, after which the Federal government goes into default on its financial obligations, and cannot pay its bills, such as student loans and Social Security checks. There is some discussion that prudent management of the deficit has given the Treasury some wiggle room for the November 1 pay period, but agencies that have “discretionary” payments are already starting to look at the next couple of months and plan for a battle in Washington.

The political environment is even more complicated – a primary election underway in the state of Kentucky has effectively silenced Senate Majority Leader Mitch McConnell as a more moderate force between Democrats and Republicans in the Senate (as was the case during the last debt ceiling debate in 2011). Similarly, House Speaker John Boehner is in a difficult position between a very conservative wing in the House that is attempting to de-fund Obamacare as a condition for raising the debt ceiling and keeping the government open – which if the government shuts down, may cost him his Speakership.

What does this mean for research administrators?

If you are waiting for a non-competing continuation, a subcontract, or a notice of award – don’t hold your breath. Everyone is going to be in a holding pattern until this is sorted out. If your investigator decides to start work, be prepared to open pre-spending accounts, and direct charge expenses (conservatively) until you know what your funding will look like. Encourage your investigators to talk to their program officers and get a read on what’s going on at their funding agency. Monitor activity and costs closely to manage potential cost share commitments until funding comes through. Keep your PI’s and departments updated on developments – and while you’re at it, load up on the antacid.

Buckle up. It’s going to be a bumpy ride.

Subcontractors, Consultants and Vendors: So Many Choices, Still So Confusing.

hire.outsource image

There are more proposals to submit to agencies than ever before – and the criteria for competitiveness includes an institution’s ability to collaborate – not only within its walls but with investigators working on related research at other institutions.

The selection of the proper agreement type for a collaborator during the proposal phase should happen as early as possible, with the investigator working with the research administrator and the collaborator to evaluate the proposal mechanism and the statement of work. A set of questions help evaluate the best agreement for the collaboration.

What criteria determine the type of agreement for a sponsored project?

1. What is the service, function or activity they will perform (with some specificity).

A subcontractor or consultant will typically have a more detailed scope of work than a vendor, which has a very specific task to perform. A subcontractor and consultant perform work which relates to the aims of the award, which have milestones and reports attached, and often require analysis. However, the outcomes of the work are not predetermined. A vendor’s work is determined by its regular course of business as it is contracted to perform a service on behalf of the award, and it either performs the service, or it does not.

2. Under what time frame will they perform it?

Accordingly, the time frames for the agreements will match the types of work performed. A vendor is usually engaged until it finishes the work performed.

3. Will they be using the facilities of an institution, or their own facilities?

Subcontractors and vendors use the facilities of their institutions; consultants use their own facilities, and not the facilities of their institutions (unless they are a small business).

4. Who will the check be made out to (who will receive the 1099)?

A subcontractor and vendor will have payments made to an institution. A consultant is almost always an individual, but can be a business. In the event that a consultant is a business, this arrangement should be reviewed periodically to ensure that the agreement should not be revised to become a subcontract in subsequent years. (Yearly consulting agreements should be considered.)

5. Does the contractor expect to have publication rights?

Only if the contractor is a subcontractor. A consultant does not typically receive publication rights.

6. Will the work of the contractor affect the direction of the science in some way?

Only if the contractor is a subcontractor. A consultant does not typically have the ability to influence the direction of the science, as the role of a consultant is to produce a work product under the direction of the PI but does not have a named scientific role. If the individual is to direct the science, they should work under the auspices of their academic institution and contribute based on their institutional based salary/effort.

7. Is the contractor working in a capacity with a level of independence?

A subcontractor or consultant, based on their named role on the project has the ability to function independently with oversight by the PI. A vendor cannot function independently. They have a scope of work that they need to complete under the direction of the PI by a specified time frame, and there is no room for deviation or independence.

8. Do the terms of the award flow down to the contractor?

The terms of the award flow down to the subcontractor and the consultant, but not the vendor. This may be a vital distinction when selecting a correct agreement type for a collaborator.

AFTER THE FACT AGREEMENTS – NOT A GOOD IDEA

I’m very appreciative, but often surprised when an investigator suggests setting up a subcontract after the fact to “save work” and time, because it seems too cumbersome to set it up during the proposal phase. In fact, setting up the subcontract, consultant or vendor agreement during the proposal phase is crucial – because at that time, F&A is being established based on the proposal budget. When the proposal is awarded, and F&A is set – any after the fact subcontracts or other agreements have to include F&A out of direct costs. This is a VERY painful budgetary impact that could have otherwise been avoided.

PREPARING THE REQUEST FOR THE COLLABORATOR

When the collaborator is a subcontractor, we have a standard package of materials that we send from our institution that we hope will make life easier for the research administrator we are working with, who will almost always be receiving the request (we ALL know this) later than we would like.

  • Northwestern’s subcontractor form (Financial Conflict of Interest Statement with standard SF424 info)
  • Draft Budget and Budget Justification
  • Draft Statement of Work

For a consultant, we provide a draft consultant letter, which states the hourly rate of pay, travel per diem, length of time work will be performed, nature of the work to be performed and support for the project. We also provide detailed instructions for completing our FCOI process for the proposal.

Common Question: Can a consultant on a proposal be an investigator at my institution?

If the work on a sponsored project is not related to an investigator’s regular work, and is not an ongoing assignment, it may be possible to justify a consulting agreement at your institution for an investigator who is also employed by your institution. However these agreements require prior institutional approval before they are proposed and should be done with proper planning. A PI cannot propose an investigator in the same department as a consultant.

Be a Spreadsheet Superhero!

h84236603 YOU CAN BE A SPREADSHEET SUPERHERO.

It’s the heart of every budget – the spreadsheet. How it is written and constructed sets the course, not only of the few weeks it takes to submit the proposal – but of the years it takes to manage the project when it is funded. The spreadsheet starts off innocently enough, as a draft that one or two people (usually the PI and the research administrator) work to edit as the proposal is constructed. Carefully planned and well constructed – this can be a time when decisions are made, and documented to set the life of the project off on the right course. Or…not.

CREATING CALM OR CHAOS IN GOTHAM CITY

It’s quite common to learn research administration from the inside out – that is, you join a project mid-stream, and pick up the documentation that a previous team generated for you to work with. That means that your success in helping to administer the research in a department or division depends on the communication that has been left for you by the previous RA, and the internal budgets you’re responsible to manage. It’s more than just written communication – it’s the budget spreadsheets that allow you to help guide your investigators to make decisions about how their projects will be managed in the coming project period.

IT’S A BIRD…IT’S A PLANE….IT’S….EXACTLY THE ANSWER I WAS LOOKING FOR

So how does one become a spreadsheet superhero? It requires some practice and dedication, and a commitment to consistency – knowing that you’ll be serving your investigators long after you leave your position and move on to your next job if you take on this alter ego.

ATTAINING A SPIDEY-SENSE FOR SPREADSHEET SUCCESS

1. Always use formulas and references when budgeting in Excel. Hard enter numbers only when absolutely necessary. Make your spreadsheets work for you, and your investigators.

2. Ask your colleagues for the best budget spreadsheets out there – and if one doesn’t exist (rest assured it does) create one. Find one that works best for your investigators’ applications and use it consistently. Time and date stamp it. Improve it as you use it for each application.

3. Budget based on institutional base salary. If you don’t know what institutional base salary is for your institution, find out. If your spreadsheet doesn’t start or takes you off course from the IBS at your institution, you will be managing cost-sharing on the award if it is awarded.

4. Try very hard to help your investigators to break the habit of doing their own budgets. You can draft them and let them play with the numbers. Many investigators forget elements of budgets – and others don’t understand why certain costs need to be included. In all cases, they need to focus on the science, and that’s why we’re there, to help with the administrative aspects of the application. It’s hard for them to depend on us. Try to help them learn to depend on you.

5. Check your math. Have a colleague review your budget and justification, just to make sure. These things are often developed very quickly and often under pressure. It’s easy to make transposition errors, etc. Have someone with fresh eyes who has had a bit more sleep take a look at your work.

6. Spend a lot of time on the budget justification. Flesh it out for the PI, to help explain the nature of each expense. Include an explanation of the calculations involved if there is a question about how the funds are to be spent.

7. Include the names of individuals working on the project in your budget spreadsheet – even if they are not included in the official proposal documents. Simple details like this are very helpful when administering salary on funded projects.

8. When creating budget spreadsheets, put yourself in the recipient’s shoes – what does the reviewer need to see? Present the budget with that in mind and keep it clean and tight. Present supporting information in sheets behind the summary page of the workbook, linking totals to the summary page. Crowding everything into one page dilutes the information you are providing and adds to the reviewer’s job. (It can also increase the chance of error and cost-sharing.)

9. Use your spreadsheets consistently – for applications, award management (clinical trial tracking, grants management, contract management, salary and effort management, and reporting to investigators). Create roll up reports to identify areas of concern (projected deficits) and manage no-cost extensions prior to them coming due.

10. Create a shared repository for this information for the investigators you work with, as well as the business administration team and central office staff you interact with. As you maintain these records, they will serve to document the active management of your investigators’ activities, help you manage their awards, and hand off their accounts easily to the next person who steps into your role. And that’s customer service!

It’s not easy to keep up with these types of records, especially when things get busy – but its harder not to – especially when there is a need for the information. Take the time to learn Excel well, and share your knowledge and time with your colleagues. Spend the time to develop the systems and processes to support your investigators and develop the spreadsheets that will serve you – and them well – now and far into the future.

Keeping Pandora’s Box Tightly Closed: Applying and Managing Clerical and Administrative Costs to Federal Awards

images (2)Some Types of Federal Awards Can Accept Administrative Costs Under Limited Conditions  

After having it drilled into your head that administrative costs are nearly impossible to justify on federal grants, you may be surprised to learn that there are regulations that allow the charging of administrative costs to Federal awards under certain circumstances. However, it is important to review your institutional sponsored research policies regarding the proposal, documentation and administration of administrative costs on federal awards, especially in light of recent audits in this area. I attended a panel presentation today on this subject at the Financial Research Administration conference given by NCURA that was staffed by Attain consultants, and it was an excellent overview on the topic.

Circular A21, section F6B, and Exhibit C provide guidance on the circumstances under which department administrators may consider charging clerical and administrative costs as a direct charge to a sponsored project. The Cost Accounting Standards section 9905.502 supports the assignment of costs using like circumstances, and consistent allocation of costs between direct and indirect accounts.

Section F6B outlines the following requirements:

  1. The sponsored project must be a “major project” which requires an “extensive amount” of clerical support.
  2. The clerical support personnel must be specifically identified with the project activity in the documentation (budget justification and proposal).
  3. The project must specifically budget for the administrative or clerical costs (and de facto receive approval from the sponsor).

Exhibit C specifies the type of project that would be considered a “major project”, which would typically be considered a P, M or U award from the NIH, or a type of award with one or more of the following types of characteristics:

  • A large complex program
  • An award requiring extensive data analysis
  • A scientific award requiring extensive collaboration which includes making travel and meeting arrangements for large numbers of people
  • Projects where investigators are geographically unavailable to usual sources of administration (so administrators have to travel to them).
  • Database management, coordination of multiple investigator projects

Documentation is No Guarantee That Charges Are Approved – But A Budget and Justification Helps A Lot

When considering the application of administrative salary or costs to a Federal award, it is important to plan for these costs during the proposal stage, and consider the documentation of these costs in the budget and budget justification. This is the strongest type of documentation (which ties the costs and supports their justification to the scientific plan at the time of the proposal). When this is not possible, written documentation of the request and approval of the costs with the justification that are submitted to the funding agency, with the written approval should be obtained.

It’s important to name the personnel (the individual, or at minimum, the position title, if you are funding a position or portion of a position) in your budget justification. When you administer this person’s time, their activity report (if they are paid hourly) or effort report (if they are paid monthly) will tie back to the budget and budget justification. And yes – setting up activity reporting or effort reporting that documents their work on the project is a must. Note that hourly employees cannot provide an effort report due to the type of employment that they typically provide on a project.

Careful reconciliation of administrative costs on an award are necessary to ensure that the charges are hitting the correct account codes, and the proper documentation is obtained and maintained throughout the life of the award. Should the award be audited, this documentation will be needed to substantiate these charges.

The panelists noted that despite receiving approval from funding agencies, and maintaining documentation, some Universities have experienced OIG audits on administrative cost allocations and have found that they were required to remove administrative costs charged to Federal grants at the OIG request. The proposal, budget and grants management documentation will establish a reasonable, consistent allocation method between direct and indirect costs, but it does not guarantee that those costs will remain on the account in the event of an audit.

One other note of caution: an audit on administrative cost allocation methods can easily become an audit about your institution’s F&A rate. This is why it is best to be conservative when proposing, allocating and charging direct costs to grants, and why it is important to have strong institutional controls over this process.

Wondering why it’s hard to get a laptop approved on your PI’s proposal? This is why.

Managing Clinical Trials: Collaborating for Success

ClinicalTrials-Doc_PatientI am attending the Financial Research Administration conference in New Orleans from March 10-12th, and while you might think that the best thing  about being in the Big Easy is the beignets (those little french doughnuts), I’m geeking out at the NCURA meeting and I’m going to be sharing the information with you on Research Administration Nation. Think of these posts as little beignets of knowledge…sweet updates.

Right now, I’m attending a workshop on Managing Clinical Trials with David Lynch (Executive Director, Office of Sponsored Research, Chicago) and Krista Harnish (Senior Research Administrator) both from Northwestern University. Full disclosure, I’m from Northwestern, too.

The workshop reviewed all aspects of CT management, and introduced a new resource which I’m really excited about and am going to purchase for my staff from NCURA: A Primer  on Clinical Trials for the Research Administrator this was published in March 2012 and is an excellent resource.

The workshop was a presentation and facilitated discussion about the cradle to grave management of clinical trials, and included a brief presentation on the types of clinical trials, case studies, and the roles and responsibilities of individuals working on trials. The majority of the workshop focused on the work that is needed to budget and negotiate agreements that are compliant and cover all study costs, and how to conduct the study and manage expenses to meet the scientific and contract requirements (while maintaining the non-profit status of colleges and universities).

The most important budgeting and negotiation points that came out of the workshop were:

  • It’s extremely important to go beyond the sponsor template when budgeting for a clinical trial, in order to ensure that you are covering all costs. An indepth cost analysis is required for each trial, which requires working directly with the investigator and the coordinators to determine the cost components of each element, how long each required aspect of the protocol takes (so that labor costs are accurate) and working with affiliates to budget each test accurately. Participants commented that the protocol analysis often takes several sources and extensive financial analysis.
  • Understanding your institution’s experience with the sponsor can assist you in analyzing the opportunity, and developing the structure of the budget (my favorite comment was “for every request we need to make for backup information we will invoice you for $X”.)
  • Documenting the budgeting and negotiating process is extremely important for success during the post-award phase.

The key discussion in the workshop came from the post-award management material, which outlined requirements for maintaining a partnership between the investigator and the administrative management that is supporting the research team.

  • The need to facilitate and maintain communication between the PI, research team (coordinators), central office, and department business administration staff, and research administration team (whether they are cradle to grave, or a separate pre-award and research finance team), is paramount. This communication needs to start when the project is awarded and be maintained through out the life of the project, as there are changes and updates that everyone should know.
  • Using a kickoff meeting allows this team to get to know each other and establish a repoire to manage this project and future projects in order to discuss questions and concerns and maintain mission focus on completing the scientific progress.
  • The team analyzes the contract and anticipates issues together – appropriately bringing roles to bear on issues that they are responsible for, and focuses on milestone acheivements together.
  • Follow up meetings are scheduled and maintained by the research administrator.
  • The meetings are maintained to report to the PI about his/her financial expenditures, receive updates on scientific progress and to manage the account and report to the sponsor.

In the post-award arena, a significant challenge that many institutions face is managing balances on clinical trial accounts. The workshop participants discussed scenarios when PI accounts have funds remaining, and institutional policies for managing those funds.

Three things to remember when managing positive balances in clinical trial accounts at the end of an award:

  1. Conduct a reconciliation of charges. Ensure that all appropriate and expected charges, including PI effort, participant remuneration, and other expenses, have hit the account.
  2. Read the contract. Do not assume that a balance can be transferred into an individual PI account. The balance should be transferred into a University account with a similiarly defined research purpose.
  3. Balances on PI accounts jeopardize the institution’s non-profit status when not properly managed and closed out into proper accounts; develop a policy at your institution and education your PIs that these funds belong to the University, not to them.

The bottom line: It’s all about collaboration for success – research administrators need to work with clinical research coordinators  and finance staff to administer clinical trials and serve investigators. When we do – clinical trial participants benefit, and that’s what its all about.

Justification Nation – Part 2: Supporting Research Personnel: Budgeting Salary and Fringe on Research Grants

scientists working at the laboratoryBudgeting Salaries and Fringe for Faculty and Staff

Sounds deceptively simple, doesn’t it? On most research proposals, personnel costs range from 60-70%. Budgeting and justifying personnel is extremely important and in principle, comes down to a few key issues:

Are the right faculty and staff on the proposal? Does the project have the right leadership?

Are the personnel on the proposal performing the right work?

Are the personnel on the proposal performing the right work for a reasonable estimate of time?

Fortunately, the choice of faculty and staff isn’t up to the research administrator. The PI will select his or her collaborators to achieve the scientific aims and enhance his or her chances of getting funded. But let’s face it. It’s a good thing we’re working on the budget – because there isn’t a PI on the planet that really understands how people are paid (or what they really make). Double and triple checking this information is key to submitting an accurate budget that covers the University’s actual personnel costs. If the proposal is awarded, the salary had better be calculated correctly, proposed with the proper person-months of effort, contain summer salary if the faculty member has a nine-month appointment, and justify the VA commitment if it exists.  Not so simple after all.

Budgeting Salary and Effort on Sponsored Projects

It’s important to start with the FOA – and any requirements from the sponsor. Is there a required amount of effort from the PI, or any others on the proposal? For grantsmanship, you’ll find that for most federal proposals, the PI will have to give at least 15-25%. (1.80 to 3.0 person months)

Who else is essential for the project? What levels of effort will they be working? Note that most PI’s think in levels of effort – you can convert to person months when you are done tweaking the budget. Outline each role for each person on the application. What will they be doing for the level of effort the PI has given them? Discuss with the PI that  20% time is one day a week, 10% time is 1/2 day a week, for that level of effort, how will the PI justify that much time on a sponsored project? Push for detail.

Draft the budget justification based on this information – and then look at the numbers and see where you end up – and edit from there. That’s how the process works. There are a couple of important things to be aware of as you write the document, which I’ll outline below.

General Budget Justification Format for Personnel with Salary and Fringe

Henry Smith, Ph.D., P.I. (1.8 calendar months), will serve as PI and Project Director on this project.  Professor of Pathology at Superb University and an HHMI investigator, he has researched nanostructures extensively, and has over 25 years of highly regarded work in the field.  He will have overall responsibility for all aspects of the project, supervise lab personnel working on experiments and will be responsible for organizing and chairing meetings of the advisory committee. In addition, he will be serving as the lead investigator of the microbiology core.

Looking for ways to justify a person or item on your justification? Google it! Someone else has faced the same problem, I guarantee it.

Justifying Faculty and Staff Fringe Rates

Your institution’s F&A agreement also contains the approved fringe rates for all employees. Be sure to use the correct fringe rates for each type of faculty and staff member, depending on their appointment. Most universities require a standard template to be used in the justification.

Remember to Inflate Salaries, Blend Fringe and Use the Cap only When Needed

In these economic times, institutions are ensuring that every salary dollar is proposed on the application – that means using the formula that factors in a salary increase each year, blends the fringe rate across each project year and only uses the salary cap on projects where it is required. Ensure that you include your inflation factors in your budget justification.

TipsA research administrator who is beginning the budgeting process should be prepared for several common questions that may arise, depending on the level of experience that the PI and project staff have with project planning and budgeting. Awareness of these potential concerns can prevent misunderstandings and assist in decision making.

1. Limit the distribution of salary information. Plan to limit distribution of salary information to as few people as possible during the budgeting process, especially during the budgeting of salary on the project. Faculty and staff may not know one another’s salary information if they have not budgeted many grants together. If salary information has to be distributed, hiding the base salary column may be recommended, you can check.

2. Beware of language in your justification that commits cost sharing. If your PI or any personnel for that matter are “contributing services” you need to write about their work in a way that does not specify exactly what they will do or how much time they will give. That’s voluntary committed cost sharing, and it happens all the time. Beware!

3. Understand the basis of a faculty or staff member’s appointment before moving forward with budgeting them on the proposal. Alert the PI if there is a problem with how the PI is proposing them on the application. The faculty or staff member must have an appointment that is consistent with how they are proposed on the application; they should have salary at the institution (versus an affiliate), or be eligible to receive a stipend versus salary and fringe. If there is some discrepancy, it can be corrected at the time of the application, instead of trying to fix a problem downstream at the time of the award (when the budget won’t allow for an increase).

4. Keep in mind that in most cases, stipends are for students or trainees receiving an education benefit from participating in the grant. Investigators are occasionally inclined to propose paying stipends for employees – instead of trainees. Consult your HR guidelines, and the FOA for more information.

5. Similarly, even seasoned investigators propose hiring colleagues on a proposal as a consultant. There are specific rules as to the type of personnel who can fulfill a consultant role. In a majority of cases, the role is fulfilled by an individual from outside the institution who is using their own resources and providing a specific expertise that is essential to the project. This individual does not contribute to the direction of the scientific work of the study.

These are general guidelines for budgeting salary and fringe on sponsored projects – it’s impossible to be specific for each type of application. For specific questions about types of applications there are excellent websites for federal agencies – and you can reach out to experienced research administrators for help.

NEXT: MORE ABOUT BUDGETING FACULTY AND STAFF, AND BUDGETING TRAINEES

Which Comes First? Business Administration or Research Administration?

FORTUNATELY, THE CHICKEN AND EGG QUESTION HAS BEEN DEFINITIVELY ADDRESSED BY SCIENTIFIC RESEARCH.

You might think that we’d start off this discussion of research and business administration with a metaphor that has no actual scientific answer – and I’m happy to say that we seem to know which came first. The chicken.

So can we answer the question at hand – business administration or research administration? Which comes first? I think we can.

Research administrators cannot operate successfully in the world of academics and medicine without business administrators first performing their essential responsibilities. It’s that simple. Business administration comes first. It is true that there are complex and close interactions, but at the end of the day, when it comes down to it, in order for research administrators to do their jobs successfully, business administrators first have to do their work well.

EVIDENCE TO SUPPORT THIS HYPOTHESIS:

  1. Faculty appointments and position funding are the responsibility of business administrators, and managed jointly with research administrators due to their impact on effort reporting and sponsored research compliance.
  2. Business administrators manage department accounts that cover “over the cap” salary cost-sharing, the portion of administrative time that PI’s cannot cover on grants, the funds that are available to cover research staff who are not fully funded on grants. Without business administrators managing department funds successfully (and these days, carefully) investigators could not keep staff employed and research administrators would not be able to manage sponsored projects successfully.
  3. The process of ordering and accepting supplies, equipment and services is a business administration function that impacts sponsored research. Business administration staff often consult with research administration to check on an order placed by a lab tech or a research assistant to make sure that the costs are being allocated correctly, but these business staff are directing the purchasing process in order for the research administration team to later reconcile the purchases with the investigator.

While these processes are intricately related, we know now that – like the chicken and the egg – one is  present before the other. It is also important to realize that, like the chicken and the egg, business administrators and research administrators need to support and work together to ensure a successful outcome.