Happy New Year! A81 Is Here!

It’s 2014! Our holiday wishes came true – at least some of them, any way. No shutdown in Washington D.C. – check. At the same time, Congress decided to roll back part of the sequestration cuts and restore funding to many areas of the Federal Government affected by last years deep spending cuts – check. And the Office of Management and Budget – gave us that mega-circular they had been promising for 2 years – CHECK!

That’s a Mouthful!

The new mega-circular, known as Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Final Rule, aims to tame the avalanche of  overlapping or contradictory guidance that was previously in effect with the eight separate circulars published by the OMB over a series of many years. These circulars, (including A-133, A-21, and A-110) applied toinformation overload hospitals, institutions of higher education, non-profit institutions, cities, states, tribal organizations, and other types of organizations, and over the years, interpreting the guidance in these documents became more difficult. A working group came together to combine the circulars into one document that would apply to all non-Federal agencies and aim to simplify the process of managing grants and contracts. These organizations worked with COFAR (the Council on Financial Assistance Reform) and the administration to develop new guidance that reflected the current reality of managing Federal awards.

The new guidance was published on December 26, 2013 in the Federal Register, and it’s over 100 pages long. It is well organized, easy to read and search online, and has a lot of familiar information for research administrators. However, in revising and updating the guidance for managing grants and contracts, the Federal government took the opportunity to incorporate input from organizations and change policies and processes regarding grants management.

What You Should Know

Key aspects of the new guidance include the following:

  • Performance over Compliance for Accountability

The emphasis in the new guidance is definitely on generating results and outcomes that can be shared with other award recipients. The Federal government is not going to allow non-compliance, but they do not want overly burdensome rules to prevent an investigator or a collaborating team from accomplishing a stack-of-paperstheir research aims. As you read the guidance, you’ll see that this is the goal.

  • Family-Friendly Policies Encouraged

The guidance definitely encourages organizations that receive Federal funding to develop (if they do not already have) family-friendly policies. They have updated their policies to include family-friendly issues such as costs related to the identification of day-care providers, and the need to allow parents to document  time out of the workforce on their biosketches.

  • Increasing de minimis Threshold for Indirect Costs to 10%

The new guidance allows organizations that cannot afford to negotiate an indirect rate to budget a 10% de minimis indirect rate with the Federal government. Previously the rate was 8%.

  • Administrative Costs can be Charged as Direct Costs

The guidance also provides specific information, in many ways, for the first time, about how to manage administrative costs as a direct cost. This issue can be difficult because it is often charged as an indirect cost (an in most cases it should be charged that way). This guidance correctly acknowledges the need for charging administrative costs as a direct cost and how to manage this situation.

  • Payment Management System Clues 

The circular provides more information than before on ensuring consistency in allocating costs, and when to secure written approval for assigning a cost to an award. The cost principles  and audit sections of the document are very useful, and it states that there is now a limit of three years for the Federal government to review awards in order to disallow costs. This, combined with the new 90 day rule for reporting on awards at the end of the project period gives us an indicator of how the Federal government will be managing award dollars in the future. Can you say “use it or lose it?”

  • Focus on Delivering Results and Outcomes

There is an entire section in the document that discusses how RFAs  and PAs will be written and what must be included in them. The circular states that RFAs and PAs have to be available 60 days before the opportunity closes – which is an interesting development. It will be fascinating to see if the language on “outcomes” and “milestones” translates into a new format for the funding announcements. Stay tuned.

To see a webcast about the new guidance click here.

Here’s to a great start to 2014 – may your New Year be productive and fulfilling!

The Fallout from October Has Just Begun: Here’s What You Need to Know

United States Capitol BuildingSHUTDOWN FALLOUT

Congress has opened its doors for business again after a two-week political roller coaster ride. The impact of this legislative hissy fit, however is still being assessed. While the media has focused on the patients in Washington DC that weren’t registered for trials at the NIH (truly a heartache) and the researchers in Antarctica and other extreme climes, research administrators have feverishly worked to meet a crushing load of November application deadlines.

In addition, research administrators and faculty have worked to assess the impact of missed application reviews on previous submissions from the last cycle, and how this will impact the upcoming review schedules. Meetings for 200 review committees scheduled for October at the NIH were canceled during the shutdown, and the impact of rescheduling these meetings (and therefore bumping the schedule of awarding these grants and holding future reviews for the upcoming cycle) is breathtakingly frightening for academic institutions across the country. Fortunately reviewers stepped forward and have volunteered to make time to participate (as institutions like the NIH originally announced revised schedules several months out, causing widespread alarm). NIH reviews are resuming in January instead of May.

NEW PAYMENT MANAGEMENT SYSTEM AT NIH

As if the shutdown didn’t give us enough excitement to manage, we are looking to the new NIH payment images (1)management system which is going into effect as we speak. The new payment management system is a process that accomplishes 2 things. First, it allows the NIH to transition current domestic awards from PMS pooled accounts (type G) to a new type of account called a PMS type G subaccount. Second, it will allow the NIH to award all new grants and contracts as the PMS type G subaccount and allow the agency to administer all awards with new payment management rules.

Starting in November, notices of award will list the type of award (type P or G). To facilitate the transfer process, the NIH will transfer new awards into the new PMS system in FY14 (which has already started. In FY15, the NIH will transfer continuing awards.

hound dogSome changes to the management of awards and closeouts have already taken place, and if you don’t know about them, you should:

1. Depending on your institution’s standard operating procedures, the NIH policy previously afforded additional time for reconciling and closing out the award before completing the annual or final financial report. The new policy requires that awards be ready for closeout at the end of the award period for a prompt production of the annual or final financial report. If your expenses have not hit the proper account when they were supposed to, you will not have enough time to fix it at the end of the budget period or award period.

2. As awards shift from the old to the new payment system, competitive segments will be shortened for one year and new awards will be given new identifiers on the NOA. Get ready for some fancy footwork – tracking and reporting on these awards will be F-U-N.

3. Prepare to bid goodbye to unliquidated obligations from previous award segments/periods. Either encumber funds, and use them, or plan to lose them at the end of the budget period. PERIOD. The new FFR format calls out the unexpended balance from prior project period right up front. (They might as well call it “funds to cut from this project budget”).

4. Automatic carry forward can be requested – but funds are not permitted to be drawn down until they are formally approved and appear on the new NOA. (Read between the lines: carry forward isn’t so automatic anymore.)

These new requirements require a laser focus on direct charging salary to sponsored projects, and encumbering salary and project expenses appropriately to awards. Research administrators need to reconcile projects on a monthly basis to ensure that charges are hitting correctly to have the grants and contracts awarded to their investigators managed to a successful close.

AN END TO SEQUESTRATION?

Congress is talking now about how they will come together in January to pass a budget – and believe it or not, they are talking about adjusting the terms of the sequester. It’s hard to believe that sequestration is back on the table (for more information about sequestration, check out my previous post). Everyone seems to agree that the across-the-board cuts have been a disaster, but, as you can guess, nobody in Congress agrees on a way to restore cuts in a fashion that can be voted on to pass in both the House and the Senate. (Does this sound familiar?) While it would be fantastic to have improvements in sequestration funding, and there appears to be bi-partisan support for doing so, this seems to be linked to passing a budget in January, and if that is the case, I’d put money on the likelihood of another government shutdown.

The DOD would be a likely target for increased funding (relief of sequestration) but its hard to tell how the NSF, NIH, FDA or other agencies would fare given the history of divisiveness that exists.

WHAT YOU CAN DO

  1. Assess your investigators’ research portfolios now; analyze your investigators’ salary and effort plans using the proposed data and effort certified to project out their current commitments if you haven’t already done this.
  2. Analyze the salary and effort of staff in the laboratories or on the projects that your investigators support.
  3. Assess the status of your investigators’ applications, if possible, to know where they are in the pipeline. Create a projection based on likelihood of funding, planned applications and current funding.
  4. Work with faculty and staff to assess potential gaps in funding for your faculty and staff. Begin to plan and request appropriate resources to cover faculty and staff salary and research during any time when the faculty member is not covered by sponsored funding.
  5. Create a budget and plan to support the request, and work with the faculty member and his/her department to request support.
  6. Assess institutional resources available to submit new applications early – should it be that we face additional gridlock in DC. Plan with your investigators to do this, if possible. (Adios, December!)
  7. Keep an eye on DC politics – and hope that this time around it’s not as bad. (Check out these resources from my previous post.)

By using our unique resources and perspective, we can help our institutions support the faculty and staff that are performing research in a wide variety of fields that make our world a better place to live. This is a really tough time, and we need to step up and make it possible for the research community to concentrate on their work – and not on the political struggles in Washington.

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.

How Many People Does It Take To Allocate An Expense To A Sponsored Project?

ideaWhen Your Office’s Cost Allocation Processes  Resemble the Punchline of that Familiar Joke, it’s Time to Take a Look at Your Decision Methods

We recently had a situation in our office where a question was raised about the method of allocating an allowable supply cost to a sponsored project. The supply cost was $30. The “answer” generated more than one week’s worth of discussion involving the time of eight employees in three different offices. In other words, more than $30 worth of F&A was spent on deciding whether or not it could or should be charged as a direct cost on the award. (It was direct charged, and it should have been, it was the right thing to do.)

You’ve Hammered The Nail Down. How Many More Times Do You Need To Hit It?

This is not a discussion about whether or not we want to be compliant – this is a discussion about the BEST way to be compliant. The reality is, that there is often MORE than one way to allocate costs in a compliant manner, and the fact of the matter is that we can allocate costs as effectively as possible, following all the rules and guidelines provided by the funding agency and OMB circulars – and an auditor can still request to remove the charge for a particular reason on an audit. (They may, or may not be successful.) At the end of the day, we need to realize that we are going to make the best decisions possible, according to policies, decide who is responsible for decision making, and move on. So how do we do this, and how can we avoid the black and white thinking that so often comes along with cost allocation processes – and makes the process so PAINFUL and time consuming?

A Starting Place for Understanding Cost Allocation: Three Questions

1. Who decides if the charge goes on the award, and who reviews/approves this decision?

It’s been my experience that the best cost allocation decisions are made at the department level – they are usually initiated by the investigator, and followed up on by a research administrator, who determines how best to allocate the cost to the award – and confirms this with the investigator. The RA might consult with a central office, but a central office role is usually to review and approve the charge once it is placed on the award, and that’s the appropriate role for the central office. It’s good to make sure we’re charging the award appropriately before we’ve touched it – but the local department knows more about the research and how the award is being conducted. The investigator also knows their program officer’s expectations, and grants management officer’s guidelines about how the award should be spent.

2. What information helps guide the decision making process?

The OMB circulars, the award documentation, and the agency guidance regarding allowable costs, as well as institutional policies and procedures regarding cost allocation. Whew! That’s a lot of information that is sometimes contradictory – so where do you start? The most specific guidance for the award pertains first.

3. What documentation supports the decision, and how is this documentation generated and maintained?

There is nothing WORSE than cost allocation processes that are not consistently followed – think A21. Following processes that document purchasing, and the allocation of costs on awards and document these costs consistently so that administrators can follow your thought processes are vital (everything from always using formulas in Excel spreadsheets to entering in justifications to every computer system that you use to execute financial transactions).

Fundamental Knowledge for Successful Cost Allocation

  • The research administrator needs to know the units for accepting costs (this sounds trivial and simple, but it really is quite important). Are costs to be allocated by project, lab, employee, etc?
  • Roles need to be maintained – it is surprising how often central office staff regularly allocate costs to account codes that are inappropriate or feel that they know best how to allocate costs, when they know little about the research itself or the cost item being allocated.
  • The consistency principle for A21 should be (in my opinion) maintained by research unit – similar types of research. Again, this is something that departments know better than central offices – allocation of expenses for wet labs is going to be different than allocation of expenses for dry labs, or clinical research labs. Explaining this to a central office accountant is important to ensure the correct allocation method for the sponsored research account.
  • Allowability and reasonableness are usually easier terms to work through, based on the award information.

When in Doubt – Double Check and Documentgroup-of-small-business-people

If you have a particularly unusual situation, work with your investigator to talk with your central office, and his or her grants management specialist about the question to receive approval. Document the decision if it is favorable. It’s still no guarantee – but it’s a good indication that it’s an allowable cost. Document all of the justification material and correspondence for future reference.

The Best Defense Is A Good Offense

As always, the investigator is always in the best position to support his or her cost allocations when the budget and budget justification are well developed in the proposal stage, and his or her progress reports, financial reports, and updates are well tracked and presented. Our cost allocation decisions should make sense, and be defensible when we are asked about them by our internal and external auditors. And it shouldn’t take a village to allocate the cost of a $30 item to a sponsored project – because there’s more work to be done!

The Pasteur Principle: Using Sponsored Research Best Practices to Prepare for Audits

While attending a conference is an important part of one’s career development, returning from one (and dealing with an overflowing email inbox and the ongoing demands of the workplace) is also part of the deal. Life doesn’t stop while we’re developing new skills – and the continuous requirement to improve, while preparation_mousetrapmeeting the needs of our current job requires the mastery of a micro-vascular surgeon, the decision making ability of a Fortune 500 CEO, and the time management skills of an air traffic controller at La Guardia. Diet Coke, anyone?

I thoroughly enjoyed the intellectual enterprise that was the NCURA Financial Research Administration Conference in New Orleans.  It’s the best conference they offer- hands down, so mark your calendar for next year’s event.

On Monday evening, I’m off to Milwaukee for the regional NCURA conference with my colleague Matt Irwin to discuss the management of clinical research faculty salaries using our salary and effort management tool. But before I do that, I thought I’d recap the presentation that Melody Delfosse and I gave in New Orleans (which is posted in the presentations section for anyone who is interested).

Catchy Title, Anyone?

Louis Pasteur once said, “Chance favors the prepared mind,” and so it is with being prepared for routine and specific program related audits. Our presentation focused on the types of audits (through which my colleague, Melody has capably served our institution for many years). Melody focused on the A133 audit, which is mandated by the A-133 circular to occur on a yearly basis at institutions that receive $500,000 in federal funds. It forms the basis for assessing best practices for sponsored research accounting at institutions that receive federal research dollars. The A-133 also examines how student financial aid funds are managed as well.

A-133 Audit Focus

It’s no surprise that the A-133 audit focuses on key areas of sponsored research accounting that we’re most familiar with:

  • Are the sub-contractors monitored?
  • Are direct costs and indirect costs consistently allocated across all categories?
  • Are direct cost charges beneficial and appropriate to the award?
  • Are cost transfers minimal, and if they are performed, are they timely?
  • Are internal controls present and consistently supporting purchases made on the awards?
  • Is equipment being tagged, logged and managed if purchased with federal funds?
  • Are effort reports and other technical and financial reports produced in a timely manner?
  • Are service centers managed appropriately?

It Takes a Team to Manage and Monitor Sponsored Research Funds

Melody and I then discussed the roles of central, school level and department level research administration staff in monitoring and managing sponsored research accounts – to ensure compliance and bring a sponsored project through the start up to close out process successfully.

Supporting the Investigator throughout the Award Lifecycle

I described the way in which Research Administration Services supports investigators at the Feinberg School of Medicine, a system which forms the basis of best practices for audit preparedness in a clinical research environment:

  • Ensuring accounts are direct charged whenever possible.
  • Establishing mechanisms to build in reconciliation of accounts.
  • Focus on documentation of decisions at every level to support charging.
  • Timely reporting (effort, progress reports, financial reports)
  • Communication (regular meetings with investigators, administrators and contractors)

Two Powerful Tools: Planning for Salary and Effort and Account Tracking

We reviewed two tools that our group uses to assist our investigators to manage their projects and discussed the impact that these tools have had on the departments that have used them on a regular ongoing basis.

Our salary and effort management tool (you can find this under the resources section of this site) is a living document to track and plan a faculty or staff member’s commitments. My colleague Matt Irwin and I will be talking about how to use this tool more in Milwaukee.

Our project tracker is a one year at a time view of a sponsored research project (also under the resources section of this site). Most institutions provide reports to PI’s by fiscal year – this is patently ridiculous when a project overlaps the fiscal year of an institution and has its own “year”. We’ve found that PI’s can’t keep this straight and need their own report. So we made one. This report gives a balance by month, and allows the PI to see all the information they tend to ask about in a meeting. Am I going to run out of money before the end of the year? What if I did X instead of Y? Is so and so getting paid?  It’s all there.

Here’s a Catchy Title: An Ounce of Prevention is Worth a Pound of Cure

We’ve seen it work, but it’s necessary to have a lot of patience for the investigator who needs to receive a top-line explanation about their balance because they don’t understand all the details. Or the investigator with tons of questions because they haven’t gotten a report on anything in a WHILE. The devil IS in the details.

We can’t skip this part, and we can’t skip through it, because this year, the file that gets pulled into the stack by the A-133 auditors could be ours. And as long as the government will be awarding grants and contracts, we will be held accountable for receiving them. That includes the possibility of an audit.

Three Things You Can Do Right Now

  1. Institute regular meetings with your investigators to review accounts.
  2. Review your institutional record retention policies – you’d be surprised at what you’d need to keep and for how long.
  3. Examine your institution’s systems and see where you can capture ways for documenting decisions without extra work (if you’re filling out an online or paper form for purchasing, and usually skip a section that asks for a reason for the purchase – start filling it in).

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.

Justification Nation Part 8: Other Direct Costs – A Few Items Like Tuition Remission, Animal Care Costs, Human Subjects Costs, and Consultants

Other Direct Costs

It sounds like a category for a few leftover items, things that are not as important, but that’s far from the case. Tuition remission costs, animals and animal care, human research participant costs (as well as patient care costs), shipping research samples and equipment, and consultant payments are some of the main budget items that are included in this section of the budget and budget justification.

Laboratory mouseTuition Remission

According to OMB Circular A-21, tuition remission for students is an allowable direct charge on federal grants and contracts provided that the following conditions are met:

  • There is an employee-employer relationship between the student and the institution for the work performed;
  • The tuition remission is a reasonable compensation for the work performed and is conditioned explicitly upon the performance of necessary work; and
  • It is the institution’s practice to similarly compensate students in non-sponsored as well as sponsored activities.

For the NIH, the graduate student compensation limit is the NRSA zero-level post-doctorate stipend level when budgeting tuition. Check your institution’s policies when justifying your school’s stipend and tuition level’s if they are higher than this rate. The NIH guidelines ask you to include your school’s tuition rates.

Animals and Animal Care

Providing details about the animals and animal care costs (mapped out against the research plan) helps the reviewers to see how well the investigator has planned and estimated the costs of his or her research. Include costs of any animals that need to be purchased, and the per diem rates for the animal care facility. If the research plan has any unusual features (unusual procedures, follow up time, etc) its best to explain in this section if there are costs involved that are related to the research plan.

Human Participant Reimbursements/Research Patient Care CostsMedical Student

Few research studies accrue patients right out of the gate, and have steady accrual rates. In addition, complicated protocols with multiple visits and payments for participation require an elegant justification which clearly outlines the payments to research participants on the timeline that reflects the participation of subjects mapped out against the research plan.

Understanding this – having the PI explain it to you and refine it with you is key. I’ve seen some payment tables for research subjects that remind me of what it must be like to direct the air traffic control center at O’Hare airport, they are that complicated. But that’s what it takes to justify thousands of dollars in participant  payments.

BY THE WAY…Don’t even think about calling these payments an honorarium or an incentive. The institutional review board, the local review board that reviews the study and ensures that we are protecting human subjects, does not want to see that we are considering these payments an incentive for participation. The dollar amount of these payments should not be coercive (it should reflect the real, reasonable cost of what it means to participate in the study – to truly be a reimbursement of their time) and should not act as an incentive for them to participate.

If you are budgeting research patient care expenses for a clinical research study, you should include the following information in your budget and budget justification:

  • The names of any hospitals and/or clinics and the amounts requested for each.
  • Provide detail for inpatient and outpatient costs separately.
  • Provide cost breakdown, number of days, number of patients, costs of tests/treatments.
  • Justify the costs associated with standard care or research care.

Consultants

Consultants are individuals or small companies providing a specialized service to meet an aim of the sponsored project. The consultant usually charges a rate by the hour or by the day, and does not use any resources of the University in order to deliver services to the project. The consultant does not exercise any discretion over the project’s direction or aims, and once the consultant delivers his/her services the consultant’s work is complete.

To budget and justify a consultant on a sponsored project, your institution may have a standard form (the consultant is held to the financial conflict of interest regulation that NIH and NSF have recently established) but the federal flow through terms do not apply to a consultant agreement, who is treated like a vendor.

To budget a consultant on an award, draft or obtain a letter from the consultant that states the following information: (Check out my previous post on subcontractors and consultants on budget justifications)

  • Intent/availability to work on the project (dates) and support of the project.
  • Hourly/daily rate of pay
  • Time frame for completed work
  • Statement of work they will perform
  • Travel needed to perform work

Include the basic information on the budget justification and attach the letter to the application. Careful attention to the Other Costs section can ensure that these costs are fully accounted for and funded when the budget and justification is reviewed by the agency.