Post Award Fiscal Management
Note: This section covers a number of topics related to Post-Award contract and grants management, including various systems and procedural issues.
IMPORTANT NOTE: This guide is a general reference and is not meant to be a substitute for our University policies & regulations. Be sure to consult the University’s policies and/or contact us.
The Key Word is PRIOR!
Remember that the PMR must be submitted before you:
- incur any expenses that were not specified in the original award
- make a change affecting the specific requirements, deliverables, or time-frames specified in the award.
Sometimes the Office of Contracts and Grants (C&G) or Sponsored Programs & Regulatory Compliance (SPARCS) can approve the change, but often the request must be approved by the sponsor. When the request goes to the sponsor for approval, the response time can be lengthy. So be sure to submit the request through the PMR system with as much lead time as possible, submitting the PMR several weeks in advance whenever possible.
NOTE: The lead-time may even be specified in the award, such as requiring that a “No-Cost Extension” be requested a certain number of days prior to the project end date.
Keep in mind that you will need to submit a PMR for travel expenses with enough advance notice for the Office of Contracts and Grants to submit the request to the sponsor and get approval prior to the travel date.
Common Actions Requiring a PMR
|Carryover / Carry Forward|
|Change in PI or Key Personnel|
|Change in Scope|
|No Cost Extension|
If you are doing a PMR to request a Budget Modification, click the link below to access and bookmark a listing of account codes that you will need when entering requests.
Disallowance of Charges
If you do not comply with the prior approval requirements, certain charges may be disallowed by the sponsor. This consequence can arise through an agency audit, even after the project has ended.
Using the PMR System
NOTE: Because transfers to other institutions inevitably cause delays in projects, advance planning is critical to ensure that the funds will be available as soon as possible at the new institution.
Your planning should begin six months prior to the move whenever possible.
The following are some of the significant issues that must be handled in a timely fashion:
- Prepare inventory of projects in Excel
- Will PI be transferring projects?
- Equipment to transfer? (titled to university as state equipment or property of sponsor?)
- Complete Project Modification Request (PMR) when instructed to do so by SPARCS staff
- Prepare closeouts if necessary (working with project fiscal manager)
Click the SPARCS link below to access and bookmark this detailed list of steps, time frames, procedures, and “who does what.”
Contact the SPARCS and C&G staff listed in the reference as soon as possible when you find out about the pending transfer so that they can work together with the sponsor and new institution, as necessary, to help make the process go as smoothly as possible.
NOTE: In most awards, a subcontract/subaward is included in the project as part of the original agreement. At other times, the PI decides after the sponsored project is in progress that a portion of the work should be completed through a subaward.
A subcontract/subaward is an agreement entered into with another institution or private firm for the performance of work that is directly related to the scope of work of a sponsored project awarded to NCSU.
The table below clarifies this definition in common terms:
|An agreement entered into with another institution or private firm||A contract for consulting services|
|NCSU Service Center fees|
|For the performance of work that is directly related to the projects scope of work||For activities NOT related to sponsored projects|
|An independent contractor responsible for completion of the work described in the subcontract||For purchase orders and contracts issued for supplies, services, and equipment|
- Go to the SPARCS Subaward versus Procurement or Consultant page for more information on how to determine if a collaboration constitutes a subaward or a consultant or vendor relationship.
Need for Subcontract
It is the responsibility of the Principal Investigator (PI) to determine when it is appropriate to subcontract a portion of the work on a sponsored project.
The PI is responsible for the following:
- Obtaining a proposal from the subcontractor that contains a statement of work and budget
- Coordinating timing, payment, reporting, deliverables and other performance requirements of the subcontract to ensure performance by NCSU under the prime agreement/award
These requirements are listed on the Subaward Action Request Form (Excel).
Most sponsoring agencies require PRIOR approval before subcontracting any project efforts. If a subcontract was not included in the original award, refer to the prime agreement terms to determine what approvals are required by the sponsoring agency before committing to a subcontract. (See next section for proper processing.)
The Office of Contracts and Grants also makes sure that subrecipients meet applicable audit requirements by reviewing their OMB Circular A-133 audit report or other financial/compliance audits. In instances of noncompliance with Federal laws and regulations, C&G ensures that corrective action has been taken.
Important Note: All terms of the sub-contractual arrangement must adhere to all requirements in the prime award.
General Procedures for Subcontracting
The following notes highlight some important procedures, cautions, reminders, and forms associated with subcontracting. You will also find a link to a comprehensive “Create and Manage Subawards” SPARCS page with further details and forms.
- Complete a PMR
If subcontracting is already approved in NCSU’s prime award, or once prior approval for subcontracting is received, the PI or department should enter a Project Modification Request (PMR) to request approval or to issue or modify a subcontract.
- In the PMR system, select the SubAward Request/Modification reason.
- Complete the online PMR request and upload a completed Subaward Action Request Form (Excel), along with the Subcontractor’s Statement of Work and budget. The budget should contain sufficient detail to determine what costs will be reimbursed by NCSU.
- Note the Two Types of Subaward Agreements
NCSU’s standard Subaward Agreement should be sufficient in most situations. If you believe that the standard Subaward Agreement will not meet your requirements, you should contact SPARCS who will work with you to develop a customized Subaward Agreement to meet your needs.
- Please keep in mind that NCSU has two standard Subaward Agreement Terms – one for Cost Reimbursement Subawards (PDF) and the other for Fixed Price Subawards (PDF). (Both of these links are also available on the Create and Manage Subawards page.)
- SPARCS Executes Subcontract
SPARCS has the subcontract executed on behalf of the university and will send to the other party (subcontractor) for signature(s). If the subcontractor has concerns about the form, they should contact SPARCS (919-515-2444). Please note that only SPARCS has the authority to negotiate the terms of the subcontract.
- C&G Establishes Project Number
When the subcontract has been fully executed, SPARCS returns a copy to the Principal Investigator’s department and the original to the Office of Contracts and Grants (C&G) where a project number (mapping to the prime award) is established. Please note that the first Subcontract/Subaward issued stays in the prime account in the Subcontracts (56980) line unless otherwise agreed upon. For any additional subcontracts issued off of a single prime project, a segment will be established by C&G.
SPARCS Web Page: Create and Manage Subawards
To explore the procedures outlined above even further, review the comprehensive “Create and Manage Subawards” SPARCS page for detailed information including forms, contract terms and conditions, as well as a procedural chart on how to request and process subawards.
Payments to Subcontractors
Invoices received from subcontractors are directed to the principal investigator’s department for review and approval. Departments should have established oversight procedures to ensure that correct payments to subcontractors are made, withheld, or denied as appropriate. The following are minimum requirements to ensure accurate documentation and payments.
The administrator, program manager, or Principal Investigator reviews and signs the invoices from the subrecipient. Department staff working with Accounts Payable staff also review subcontract charges to ensure that the required conditions are met before authorizing payment. The reviews ensure that the following conditions are met:
- Subcontractor invoices have enough detail to determine how the funds are being used
- Amount to be paid doesn’t exceed amount obligated
- Invoice dates are within Subaward dates
- Correct assessment and calculation of F&A costs
- Costs are allocable, allowable, reasonable, and follow budget categories
- Cost sharing (if required) has been contributed/reported/supported on at least an annual basis (more frequently if required by the Prime Sponsor)
- Invoices are timely
- The required subcontractor services are completed and special reports are submitted
- Duplicate subrecipient invoices are not submitted for payment
If any of the following conditions exist, Departments should withhold payment until a satisfactory explanation is received or an appropriate audit/review of unresolved issues is performed:
- Questionable costs which differ materially from the approved budget
- Costs that are not allowable given prime sponsor terms and conditions
- Costs which appear unusual or unallowable
As a general rule, sponsors apply the same rules and regulations regarding allowability of charges to subcontractors as they do to NCSU. Therefore, if a contractor invoices for charges that cannot be applied to the original grant or contract, the charges cannot be reimbursed on the subcontract. If unsure of the allowability of a charge, department staff should contact the Office of Contracts and Grants at 515-2153 or email CNGHelpDesk@ncsu.edu.
Make sure that your department has established a working protocol to ensure that the following occurs:
- The Principal Investigator knows that the work has been done and always signs each invoice prior to payments being made.
- If an individual (other than the PI) is aware of the costs related to the work performed on the subaward, this individual should also sign or initial all subrecipient invoices.
Departmental staff should also assist as needed in completing project closeout by handling the following:
- Identify ‘Final’ invoices as such
- Forward all cost sharing documentation to C&G before project closeout if cost sharing is noted/required
The department should not authorize the final payment until all required reports or research products have been received, are acceptable, and the PI has given final approval!
Food costs are not normally allowable as direct costs on a sponsored project under Federal, State, and University guidelines.
However, food costs for workshops or conferences directly related to the project may be considered exempt from this rule and be allowable if they meet certain conditions.
To be exempt from the rule, food costs must minimally meet all of the following requirements.
- The workshop or conference must meet all of the following criteria:
- Be directly related to the purpose of the project
- Be planned in detail in advance
- Include a formal agenda or curriculum
- Include a written invitation to participants
- The conference or workshop meal costs must be included and approved in the sponsored project agreement.
- The costs must be reasonable, certified, and approved by the department or unit head.
- Refreshments for coffee breaks are also allowable if certain conditions are met:
- Minimum of twenty (20) registered participants
- Costs not exceeding $4.50 per participant per day
Requesting a Food Cost Exemption
Follow these steps to request a food cost exemption:
- Thoroughly review the proposal and award for references to a conference or workshop where food costs would meet the State and University guidelines, focusing on the following questions:
- Was the conference/workshop described in the original Statement of Work?
- Were budget items set aside for these costs?
- Is budget money available in appropriate category to accommodate food costs (Current Services – 53990)?
- If prior approval needed from the agency on an existing project, request approval prior to staging workshop/conference via PMR system.
- Complete a Food Costs/Project Exemptions Form (PDF || Word) and submit it to the project Fiscal Manager for review.
- Once reviewed and approved by C&G, your college will receive a letter (sample) stating that the project has been approved for exemption with notes regarding compliance with all State and University guidelines for payment.
- File this approval letter with your project documents.
Processing Invoices for Payment
Follow these steps to process conference and workshop expenses for payment:
- Accept only the original itemized invoice from a commercial establishment.
- The conference authorization must include:
- Number of persons expected to attend
- Purpose and duration of the conference
- Specific meals to the served at the conference
- Approximate daily subsistence cost per person
- Name of the conference center, hotel, etc.
- Verify grant documentation with proposal/budget indicating amount allowed for conference meals. (Conference meals can be no more than the budgeted amount.)
- If PMR was completed to add conference cost, include this documentation.
- Invoice must be signed by the Department Head or Dean.
Related Rules and References
Make sure that you have reviewed the following rules and references to ensure that you are meeting the requirements before authorizing any food costs related to sponsored projects.
- SPARCS Budgeting Guidelines on Conference/Workshop Food
- Food Costs/Project Exemptions form (PDF || Word)
- Sample C&G Approval Letter (PDF)
- State Budget Manual
Review the following notes thoroughly, and contact the Office of Contracts and Grants at 919-515-2153 before setting up your account details because program income sometimes requires a second account. Also, if your college processes the income, the department may need to set up some separate tracking mechanisms to avoid missing some critical information.
Program Income Overview NCURA Video
Review this optional 2 minute Program Income Overviewvideo from the National Council of University Research Administrators (NCURA). It is an overview segment featuring a commentary from another university representative sharing basic concepts that are explained in further detail below.
NOTE: These NCURA videos are useful as additional references on our RAMP Guide topics, but be sure to refer to our specific university policies, procedures, and contacts when making project decisions.
Before clicking the play arrow below, take a moment to grab your ear buds or adjust your computer’s volume up or down to listen in your work environment.
Program Income is defined in Federal OMB Circular A-110 as gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award.
Program Income includes, but is not limited to, the following:
- Income from fees for services performed
- The use or rental of real or personal property acquired under federally funded projects
- The sale of commodities or items fabricated under an award
- License fees and royalties on patents and copyrights
- Interest on loans made with award funds
Program Income does not include:
- Interest earned on advances of Federal funds
- The receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them (except as otherwise provided in Federal awarding agency regulations or the terms and conditions of the award)
How the University Uses Program Income
Following the language in Federal OMB Circular, A-110, Section 24 (b) [except as provided in paragraph (h)] and following any specific requirements in the terms and conditions of the award, the university retains Program Income earned during the project period using one or more of the following methods:
- Additive Method – added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives
- Deductive Method – Deducted from the total project or program allowable cost in determining the new allowable costs on which the Federal Share of costs is based
- Match Method – Used to finance the non-Federal share of the project or program
The following are common types of Program Income related to our projects and how we handle the funds:
- Workshops/Conference Registration Fees (Most common Program Income) – Deposits for workshop/registration fees are made to account code 53998. The department/college is responsible for preparing the deposit slip, copying checks, and submitting to the cashier’s office for deposit. Keep in mind that you should retain an accurate record of payments received because the detail will not be entered into Financials. If you need to confirm a particular payee, you will need to look in your own records for this information.
- Refund of Expenditures – A refund of expenditure occurs when full or partial payment to a vendor for goods or services is returned to the University. Deposits for refunds of expenditures are made to the account code where the cost was initially charged to reduce the expenditure amount on the project.
- Program Income Project (Example: Revenue generated by selling related publications such as pamphlets and booklets) – When a separate project number is needed to account for program income, make the request using Chartfield Request System (Instructions PDF). The segment will be established in The Office of Contracts and Grants and will be used to receive program income deposits. This option is generally reserved for projects using the ‘Match Method’ described above.
Any Fabricated Equipment costs associated with your award can be budgeted and charged to the sponsor account separately from the regular Facilities & Administrative (F&A) rates under certain circumstances.
Fabricated equipment is defined as an item of equipment that is built or assembled in its original form from individual parts by a PI and/or other sponsored project personnel, in either an internal shop or external shop.
The Fabricated Equipment must also meet all of the following criteria to be exempt from F&A:
- Cumulative cost of $5,000 or greater *
- Life expectancy of 1 year or longer
- Will not be turned over to the sponsor at the end of the project
In addition to the basic criteria listed in the list above, the following criteria also apply:
- The item must be recorded as capital equipment in the University’s Capital Asset Management system (CAMS).
- Fabricated equipment costs do not include routine maintenance and repair costs associated with the piece of fabricated equipment.
- An instance where components are simply connected together in a system, such as when individual computers and servers are joined to create a network, does not constitute a fabrication.
* Important Notes regarding the $5000 cost criteria:
- If a fabricated equipment item will have an aggregate cost of less than $5,000, the individual costs for all acquisitions are subject to the relevant F&A rate.
- If you initially anticipate that the total fabrication will cost more than $5,000 but the final product aggregates to less than $5,000, all component costs will then be subject to Facilities And Administrative (F&A).
Budget Justifications Required
Specific budget justifications concerning fabricated equipment should include all of the following information:
- The specific relationship the activity will have with the performance of the overall project scope
- How the component costs will be accounted for
- The anticipated function and value of the finished fabrication
- The expected ownership vesting of the equipment
Budgeting Fabricated Equipment Costs
Once your project is funded and you are ready to begin procuring fabricated equipment components, follow these steps:
- Before incurring fabricated equipment component costs, you must first consult with your college business office identifying your fabricated equipment.
- After consulting with the business office, you will charge the individual costs to the equipment account code series (55000 series).
- Make a special notation on invoices prior to sending them to accounts payable.
Related Salary, Labor, and Travel costs
In budgeting related salary, labor, and travel costs, keep the following in mind:
- Fabricated equipment must be identified prior to acquisition of component parts.
- Costs that should be budgeted and charged to a sponsored account include materials and supplies necessary for the fabrication as well as any internal or external shop service fees.
- Labor, travel and other costs associated with the services of an outside party in a fabrication should be incorporated in the external shop service fees.
- Although project personnel may participate in the fabrication, their salaries will not be exempt from the Facilities And Administrative (F&A) rate assessment.
- Only labor costs that are implicit in the internal or external shop rates will be F&A exempt.
- Component replacement is not part of fabrication expenditures. This is a maintenance expense and should be coded as such.
Roles and Responsibilities
It is the Department/College Business Officer’s responsibility to:
- Review the project for fabrication prior to submitting a request to the Fiscal Manager.
- After thorough review, send a detailed e-mail to the project fiscal manager stating what is being fabricated, a breakdown of the pieces and costs, etc.
- If this information is already detailed in the proposal, then an e-mail to the fiscal manager requesting the account be set up for fabrication is all that is necessary.
The C&G Fiscal Manager is responsible for confirming that fabrication exists and that the account should be coded as such prior to forwarding to management for final review. Once an account is coded for fabrication, a code is entered which will display on Report 5 in the WolfPack Reporting System. The Equipment Flag Indicator list is online in the Reporting section of the C&G web site.
Any project coded as fabricated equipment must have a CAMS number listed on the closeout form. The CAMS number should be confirmed as tagged to the appropriate piece of equipment. If a CAMS number is not listed, follow up with the College Business Officer immediately!
Confirm that the fabrication was completed and was necessary for the project.
- If the equipment was not completed, then all items must be moved to a supply or other appropriate account code.
- If the fabrication was not needed, i.e. total value did not amount to $5,000, then all items must be moved to a supply or other appropriate account code.
Remember, if ownership of the final product is to transfer to the sponsor, the F&A rate exemption does not apply to the individual fabrication costs!
Redistributions are used to adjust all payroll charges, including salary and benefits, made in previous periods.
If you are involved with these redistributions for your College, review the information on the C&G Systems page.