Follow the resources links below for information and assistance on applying for and managing research grants at the UND School of Medicine & Health Sciences.
Sponsored Project expenses are reviewed in various ways.
In general, sponsored project awards provide for reimbursement of actual, allowable costs incurred and are subject to allowability under Federal regulations as well as University policy.
The Federal regulations are governed by the Uniform Guidance (located in 2 CFR 200) which establishes standards for the allowability of costs, provide detailed guidance on the cost accounting treatment of costs as direct or F&A costs, and set forth allowability and allocability principles for selected items of cost.
The Federal cost principles address four tests in determining the allowability of costs. The four tests are as follows:
1. Reasonableness (including necessity)
A cost may be considered reasonable if the nature of the goods or services acquired or applied and the associated dollar amount reflect the action that a prudent person would have taken under the circumstances prevailing when the decision to incur the cost was made.
A cost is allocable to a specific sponsored project if the goods or services involved are chargeable or assignable to that project in accordance with the relative benefits received or other equitable relationship. A cost is allocable to a sponsored project if it is incurred in order to advance work under the project.
Grantees must be consistent in assigning costs to cost objectives. Therefore (although costs may be charged as either direct costs or F&A costs, depending on their identifiable benefit to a particular project or program) they must be treated consistently for all work of the organization under similar circumstances, regardless of the source of funding, so as to avoid duplicate charges.
4. Conformance (allowable)
This test of allowability—conformance with limitations and exclusions as contained in the terms and conditions of award, including those in the cost principles—varies by the type of activity, the type of recipient, and other characteristics of individual awards.
These four tests apply regardless of whether the particular category of costs is one specified in the cost principles or one governed by other terms and conditions of an award. These tests also apply regardless of treatment as a direct cost or an F&A cost. The fact that a proposed cost is awarded as requested by an applicant does not indicate a determination of allowability.
University policy concerning unallowable costs on sponsored projects bases allowability of costs on the North Dakota Century Code (NDCC). The North Dakota Century Code is the codification of all general and permanent laws enacted since statehood, and contains the Constitution of North Dakota and the North Dakota Century Code. Because the University of North Dakota is a state entity, we are required to follow the North Dakota Century Code.
Shown below are items unallowable on sponsored projects because of University policy and/or Federal cost principles. Some items listed below can become allowable with specific agency approval.
- Air Cleaners/Purifiers/Filters
- Alcoholic Beverages
- Alcohol/Disinfectant Wipes/Hand Sanitizers (except for public use)
- Communication Expenses
- Cups, Water Glasses, Napkins, Tableware, etc
- Displays, Demonstrations and Exhibits
- Equipment Purchases $5,000 or above
- Facial Tissue/Kleenex
- Food or Beverages for Grant Activities
- Holiday Cards/Decorations
- Lost Departmental Keys
- Meeting Room Costs
- Office Supplies
- Personal Care Items
- Personal Dues or Memberships
- Photographs, Pictures, Picture Frames
- Promotional Items and Memorabilia, Including Gifts and Souvenirs
- Proposal Preparation Costs
- Salaries for Administrative and Clerical Staff
- Salary Overload Payments
- Scholarship/Fellowship Payments
- Telephone Line Charges
A cost overrun occurs when direct costs charged to a sponsored project (grant, cooperative agreement or contract) are in excess of the awarded amount. Deficit spending on these funds is inappropriate and should rarely occur. When such an occurrence exists, the deficit must be moved from the sponsored project to a non-grant departmental fund with the same function.
If the deficit is incurred in anticipation of additional funding, these costs should be treated as pre-award costs, and a memo should be prepared by the department or SMHS Grants Management and sent to the UND Research & Sponsored Program Development. See Pre-Award Costs for criteria.
A cost transfer is the correction of an expense from the original funding source to the appropriate funding source. These transfers should be accomplished within 90 days of the expense and they must be supported by documentation that fully explains how the error occurred. An explanation of "to change the funding source" is not allowable.
Here are some points about cost transfers:
- Cost transfers are mechanisms for correcting errors.
- Cost transfers are not a means of managing cash flow. Grant project funds are not interchangeable.
- When transferring costs, the integrity of each grant project must be maintained.
- The fundamental principles of allowability of costs must be followed for all transfers of costs.
- Proper documentation that explains the rationale for the cost transfer must be maintained.
Finally, cost transfers must be completed in accordance with the Uniform Guidance and cost principles:
The most common cost transfer is the salary correction. Here is some information on salary corrections:
What is a Salary Correction?
A salary correction is a permanent adjustment to an employee’s source of salary. This adjustment is needed when the department has determined that an employee was paid from an incorrect funding source.
Salary corrections are not used to adjust the amount of salary that an employee receives.
When is a Salary Correction Necessary?
Because salary corrections are always carefully monitored due to sponsor requirements, if an adjustment is necessary, the correction should be done in a timely manner (within 90 days). No corrections should be requested after effort has been certified on a Personnel Activity Confirmation report.
Salary corrections are NOT appropriate to reduce overruns on other grants or institutional funds; to avoid restrictions imposed by law or by the terms of the agreement; for the purpose of utilizing unexpended balances; if the expenses are to no direct benefit to the grant; or for other reasons of convenience.
Frequent or inadequately explained salary corrections raise serious questions about the allowability of the transfers themselves as well as the overall reliability of the department’s internal controls.
How is Salary Corrected?
In order to be consistent with Appointment Revision Forms, and have an accurate audit trail for both internal and external auditors, a "Budget Retrodistribution Form" has been developed to adjust salary and fringes on sponsored projects.
Once this form has been completed and signed by the department, it should be sent to SMHS Grants Management.
It is the responsibility of the department to keep a copy of the salary correction paperwork in case it is needed in the future.
Where Can the Salary Correction Forms Be Found?
UND Retroactive Distribution Request Instructions, a UND Retroactive Distribution Request and the Retro Partial Salary Correction Spreadsheet can be found on the UND Payroll website under Salary Retrodistribution Forms. These forms are used for salary corrections at UND.
Pre-Award Costs/Temporary Project Set Up
Sometimes it is necessary to have a UND project number established prior to the execution of the final award document. It is inappropriate to charge pre-award costs to a local or appropriated fund and then transfer them to a grant project number later.
To establish a project number that will be used for pre-award costs, a memo needs to be sent from SMHS Grants Management to the UND Research & Program Development. This memo should be signed by the department, chair and SMHS Administration & Finance, and should include the following:
- The Principal Investigator's name.
- The proposal title.
- The sponsor's name.
- The anticipated award amount.
- The projected start date of the award.
- The department must accept the financial risk in the event an award is not forthcoming, the start date is changed by the sponsor, or an acceptable agreement can not be negotiated.
Once the project number is established, you will be able to view screens and reports just as if we had received the award document. The only difference is that we are unable to invoice the sponsor until we have received, negotiated, and signed a legally binding award document.
Common types of awards modifications include carryover requests, no-cost extensions, and transferring an award.
Some external sponsors do not allow automatic carryover of unspent grant funds from one budget year to the next. If this is the case, a project with unspent funds at the end of a budget year, will need to request a carryover of funds to the next budget period. This written request is called a "Carryover Request" and must include the following:
- An appropriate scientific justification.
- A plan for the use of funds.
- A detailed categorical breakdown of the unspent funds, including F&A costs (if applicable).
- A copy of the final expenditure report.
- In many cases, if the dollar amount is significant (typically 25% of total current year costs), an explanation of why the funds were not fully expended in the prior year may need to be included.
Carryover requests need to be reviewed and approved by UND Research & Sponsored Program Development.
Sponsored projects contain a project start and end date that were provided at the time of the award. If the project end date needs to be extended due to reasonable circumstances, a request for a no-cost extension will need to go to the sponsor. A no-cost extension is an extension of a project end date without additional funding.
Here are some examples of reasonable circumstances that may require an end date extension:
- Additional time beyond the established expiration date is required to ensure adequate completion of the originally approved project.
- Continuity of sponsor grant support is required while a competing continuation application is under review.
- The extension is necessary to permit an orderly phase out of a project that will not receive continued support.
The no-cost extension should be reviewed and approved by UND Research & Sponsored Program Development. Depending on the agency, the request will be submitted appropriately.
Should the request be approved, the sponsor will issue a formal amendment to the award notice containing the new end date as well as a revised final reporting schedule. These final reports will change based upon the revised end date.
There may be limitations on the sponsor’s ability to offer grant extensions; therefore, it is not guaranteed that the request for a no-cost extension will be approved.
The fact that funds remain at the expiration of the grant is not, in itself, sufficient justification for an extension.
No-cost extension requests need to be done at least 30-days prior to the end date of the project!
Transferring an Award
A project is always awarded to the PI’s institution. Before it can be transferred to a new institution, the University needs to decide if it is appropriate to transfer the award. Once it is decided a transfer is to take place, then the specific policies of the awarding agency need to be followed. As a general rule the following must happen:
- Award relinquished from the PI's Current Institution
- Award applied for from the PI's New Institution
Once a sponsored project is approaching its end date, there are certain options and procedures that will help bring the project to an orderly and successful completion. No routing form is needed to close a project.
Procedure to Close-Out Sponsored Project
- Review the budget for funds available.
- If the amount remaining will be enough to cover completion of the project, and the project is scheduled to be completed on time, proceed as planned.
- If the amount remaining is adequate, but the time remaining is not, a no-cost extension may be an available option. Please contact SMHS Grants Management to help you proceed with this end date extension.
- If the amount remaining is not adequate, or if particular budget line items require adjustment, please contact SMHS Grants Management to clarify the necessary procedures.
- If the amount remaining is substantial, and it appears that you will have a significant balance at the end of the project, please contact SMHS Grants Management to clarify the necessary procedures.
- If you are awaiting a no-cost extension or next year’s award notice, please contact SMHS Grants Management to complete a memo requesting that this project be switched to a “temporary” status until the receipt of the no-cost extension or award notice.
- Process payroll revision forms to transfer salary appointments to alternative sources of funding.
- Make sure that the UND Postal Services and Telecommunications offices have been notified of an alternative source of funding.
- Submit purchases in order for them to be processed prior to the project termination date.
- Review all outstanding orders. If there are potential problems regarding delivery, payment, or acceptance of the items, please contact SMHS Grants Management.
- Review any outstanding encumbrances to make sure they are paid in full or returned to available budget for final payment of any other outstanding expenses.
- Review all Subcontracts to finalize payment within deadlines.
- If cost share is required for your project, review the cost share commitments to ensure that the required obligation will be met.
Make sure all final reports including the final progress report and the final invention statement (whether or not the funded project resulted in any inventions) are filed by the due date.
UND Grants & Contracts Accounting will submit the final financial report.