Award Administration Guide

The concepts of allowability, allocability, and reasonableness of costs address directly the legitimacy of a cost charged against a specific sponsored research award. Determination of allowability, allocability, and reasonableness of a given expense is based on specific guidelines of the funding agency and according to federal cost principles, 2 CFR Part 200, Subpart E - Cost Principles of Uniform Guidance.

Allowability, allocability, and reasonableness are defined and determined by the Office of Management and Budget (OMB) following the sponsor's requirements and/or College policy. Each financial transaction charged against a sponsored research award is evaluated against the following three concepts:

• Allowability; costs must be reasonable, must be given consistent treatment through application of those generally accepted accounting principles appropriate to the situation, and conform to any limitations or exclusions set forth in the sponsored agreement or in the Federal Cost Principles (OMB Uniform Guidance §200.403).
• Allocability; cost has been incurred solely to support or advance the work of a specific sponsored research award or realistic proportioned and charged to multiple projects, in reasonably and equitably.
• Reasonableness; cost of an expenditure that doesn't exceed the amount a person using good judgment and common sense would have spent under the circumstances to purchase the items.

The Principal Investigator(s), Research and Sponsored Programs (RSP), and the Grants Accountant work together to ensure that all costs charged to the sponsored research award are allowable and allocable based on specific guidelines of the funding agency and according to federal cost principles.

Allowable costs (for all non-federal entities, other than for-profit entities and hospitals) are those costs consistent with the principles set out in 2 CFR 200, Subpart E, and those permitted by the funding agency’s  authorizing legislation. The fact that a cost requested in a budget is awarded, does not ensure a determination of allowability.

Unallowable costs are costs that will not be supported by a funding agency or will not be reimbursed. If a cost cannot meet the criteria of allowability, allocability, and reasonableness, it is unallowable. A funding agency’s program announcement may identify costs which cannot be included in the budget, although they may qualify as direct costs according to Uniform Guidance. Funding agencies may also limit amount in certain budget categories.

Common Categories of Allowable and Unallowable Costs

Consider how you will manage the implementation of your project:

1. Address any outstanding questions at the unset of your award.
2. Understand your reporting requirements and what, if any, data/information will be needed for reporting to your funding agency.
3. Sketch our your implementation timeline by month, noting milestones/deliverables and any required reporting deadlines.
4. Define your budget monitoring and reconciling plan.
5. If applicable, define team meeting schedule, and communication roles and expectations to team members.
6. Regularly monitor project progress and enhance implementation timeline accordingly to ensure milestones and deliverables can be completed within the defined award period.
7. Engage with your Program Officer, as needed.  Your funding agency wants you and your project to be successful.

It is expected that the Principal Investigator (PI) or their delegate will review the fiscal status of their sponsored project budget(s) regularly (at least monthly) and promptly correct expense transactions that are incorrectly recorded. 

Principal Investigator's monitor any student payroll in the web-accounting application and all other budget categories in Workday.

Login into Workday to setup your Grant Manager App and monitor your award budget.

Add your Grant Manager App

1. Go to Menu in the upper left-hand corner 
2. Click on Add Apps in the bottom
3. Type in Grant Manager 
4. Click on ‘Grant Manager’ option.  DO NOT select Grants Management, that will NOT give you information 
5. Grant Manager will not be available in your Apps

Using your STAR ID and password, log into Minnesota State the online accounting application to access your project budget. The Accounting Application offers an interactive platform for reviewing and monitoring your projects budgets. Once logged in to the Accounting Application home page there is a useful link to Accounting Documentation and Training Materials.

Common reports used for monitoring your budgets (cost center):

 *Due to processing time, Purchasing/Travel Card transactions may take up to 4 weeks to post to your account.

External sponsors expect that costs are charged appropriately at the time incurred and that significant adjustments should not be required if adequate financial management practices and policies exist. 

Procedures for hiring and purchasing are the same for all University expenditures, including sponsored projects. Please refer to the How to Facilitate Your Expenditures page for details on how to process expenses associated with your sponsored project.

The University recognizes that a correction, also known as a cost transfer, from one account to another are occasionally necessary to correct bookkeeping or clerical errors in the original charges. If a need for a correction to or from a sponsored project budget arises, the PI must notify the University Grants Accountant in writing as soon as possible. Written notice should include details and justification for the correction request. The University Grants Accountant will review allowability of correction request for alignment with the terms of the sponsored award, then facilitate correction in consultation with the Office of Research and Sponsored Programs, where needed. A correction or cost transfer is an after-the-fact reallocation of costs associated with a transaction between two university accounts, at least one of which is a sponsored project. External sponsors expect that costs are charged appropriately at the time incurred and that significant cost transfers should not be required if adequate financial management practices and policies exist.

 To comply with cost allowability and allocability requirements of 2 CFR 200, Section E, it is necessary to explain and justify cost transfers of charges onto federal awards from other federal accounts, non-federal accounts or University accounts.  Timeliness and completeness of the explanation of transfer are important factors in supporting allowability and allocability in accordance with federal cost principles.

Timeliness

Cost transfers that represent corrections of errors should be completed as soon as an error is discovered, and within three months of when the error is discovered, and no later than six months after the original expense is posted to an award.

Cost Transfer Procedure

A cost transfer requires thorough documentation to support the transaction. In addition, the transfer must be timely, complete, and comply with allowability, allocability, and reasonableness requirements. Principal Investigator, or delegate, submits the following information in writing to the University Grants Accountant for review and consideration:

1. Accounting transaction number
2. Cost center charged
3. Brief description of the expenditure
4. Explain the reason the expense(s) was originally charged to the incorrect account
5. Explain what action(s) have been taken to eliminate the need for this type of cost transfer in the future
6. Provide the cost center and cost center responsible person of the account where the cost should be charged

Reviewing Authority

The University Grants Accountant will review appropriateness and facilitate the correction/cost transfer, consulting with the Office of Research and Sponsored Programs where needed. Approved corrections or cost transfers are processed as soon as identified (typically within a business day or two of identification) and concluded within the appropriate fiscal year.

A no-cost extension extends the project period beyond the original project end date and involves no additional funding. If you anticipate not being able to complete your research by the end date of your award, an extension may be allowable if the following conditions are met:

• There is a programmatic need to continue the research, AND
• There are sufficient funds remaining to cover the extended effort

Note: Remaining budget balance alone is not justification for an extension.

PI Action Steps:

1. Notify RSP regarding modification as soon as situation is known.
2. Prepare justification, define proposed new end date, and outline how remaining budget balance will be used.
3. Consult cognizant department chair and Dean regarding requested modification.
4. For projects with co-Principal Investigator(s), discuss requested modification among project team prior to proceeding to step 5.
5. Complete and submit Post-Award Modification Request Form online.

Once received, a modification request is reviewed by Research and Sponsored Programs. Further information will be collected from the PI, and PI’s department and dean/supervisor as needed. Research and Sponsored Programs submits the modification request to the funding agency. Once approval is documented, modification specifics will be shared with Grants Accountant in Business Office to ensure the University’s official award file remains current.

After a grant or contract has been awarded, the PI may determine that the approved budget allocations are not consistent with actual project needs and may request the formal reallocation of funds from one spending category to another to complete the project requirements and implementation. Funding agencies will often consider budget revision requests.

PI Action Steps:

1. Notify RSP regarding modification as soon as situation is known.
2. Draft budget revision spreadsheet, including justification for the revision and impacts to the project
3. Consult cognizant department chair and Dean regarding requested modification.
4. For projects with co-Principal Investigator(s), discuss requested modification among project team prior to proceeding to step 5.
5. Complete and submit Post-Award Modification Request Form online.

Once received, a budget revision request is reviewed by Research and Sponsored Programs. Further information will be collected from the PI, and PI’s department and dean/supervisor as needed. Research and Sponsored Programs determines if the budget revision request requires a formal award modification, and if required, a formal budget revision request will be submitted to the funding agency. Once approval is documented, modification specifics will be shared with Grants Accountant in Business Office to ensure the University’s official award file remains current.

The approval of the project has been based on the participation or qualifications of the Principal Investigator(s) and other key personnel. Thus, the sponsor requires notification whenever there will be a significant change in the level of participation by the PI(s)/key personnel. The sponsor has the option to either approve or disapprove of any personnel changes on an award.

Examples of circumstances of when PI/key personnel changes are needed:

• Termination of affiliation with St. Cloud State
• Significant change in the percentage of effort (25% or more) that they are available to work on the project
• Change of circumstances that requires continued absence from the university or project for more than 3 months (sabbatical, leave of absence, etc.) - See Disengagement of PI for 90 Days or more section below
• Unforeseen circumstances (serious illness/injury, etc.) that prevents continuation of work on the project.

PI Action Steps:

1. Notify RSP regarding modification as soon as situation is known
2. Consult cognizant department chair and Dean regarding requested modification
3. For projects with co-PI(s), discuss requested modification among project team prior to proceeding to Step Four (4). Prior to contacting the cognizant sponsor program officer, those projects that are collaborative projects with multiple co-PIs from different colleges/schools, we recommend that the PI discusses proposed personnel changes with the co-PI(s) and the cognizant college/school Deans.
4. After consultation with the project team/Deans, and cognizant sponsor program officer, complete and submit Post-Award Modification Request Form online

Once received, a modification request is reviewed by Research and Sponsored Programs. Further information will be collected from the PI, and PI’s department and dean/supervisor as needed.  Research and Sponsored Programs submits the modification request to the funding agency. Once approval is documented, modification specifics will be shared with Grants Accountant in Business Office to ensure the University’s official award file remains current.

Funding agencies reasonably expect that the Principal Investigator (PI) will be present when a funded project is implemented to manage the award and ensure that objectives and timelines are fulfilled. If the PI is retaining their affiliation with St. Cloud State but will be disengaged for 90 days or more (e.g., sabbatical, leave of absence, etc.), the sponsor's guidelines about reporting and managing the absence will be followed. Generally options include:

• If the PI chooses and is able to successfully supervise/manage the project and be actively involved form a remote location, the sponsor may consider this a viable option OR
• If the PI is going to be disengaged from their project, the sponsor may consider a substitute PI to complete the project. Typically, once the sponsor approves a substitute PI, the change will be in effect throughout the life of the award or until another modification is requested (i.e., the original PI returns to the project).

PI Action Steps:

1. Notify RSP regarding modification as soon as situation is known
2. Consult cognizant department chair and Dean regarding requested modification
   1. In collaboration with the cognizant department chair and Dean, if PI substitution will be pursued, a new PI will be identified to be proposed to the sponsor.
   2. Confirmation of commitment form the new PI will be needed via the Post-Award Modification Request Form
3. For projects with co-PI(s), discuss requested modification among project team prior to proceeding to Step Four (4). Prior to contacting the cognizant sponsor program officer, those projects that are collaborative projects with multiple co-PIs from different colleges/schools, we recommend that the PI discusses proposed personnel changes with the co-PI(s) and the cognizant college/school Deans.
4. After consultation with the project team/Deans, and cognizant sponsor program officer, complete and submit Post-Award Modification Request Form online

Once received, a modification request is reviewed by Research and Sponsored Programs. Further information will be collected from the PI, and PI’s department and dean/supervisor as needed. Research and Sponsored Programs submits the modification request to the funding agency. Once approval is documented, modification specifics will be shared with Grants Accountant in Business Office to ensure the University’s official award file remains current.

There are a variety of alternate reasons for award modifications

Some examples include, but are not limited to:

• Change in project scope
• Purchase of equipment during the last 3 months of award
• Transfer award to another institution
• For other modifications, contact RSP to discuss

PI Action Steps:

1. Notify RSP regarding modification as soon as situation is known
2. Consult cognizant department chair and Dean regarding requested modification
3. For projects with co-PI(s), discuss requested modification among project team prior to proceeding to Step 4.
4. Complete and submit Post-Award Modification Request Form online

Once received, a modification request is reviewed by Research and Sponsored Programs. Further information will be collected from the PI, and PI’s department and dean/supervisor as needed. Research and Sponsored Programs submits the modification request to the funding agency. Once approval is documented, modification specifics will be shared with Grants Accountant in Business Office to ensure the University’s official award file remains current.

The PI(s) is responsible for the completion and submission of required reports in a timely manner. On-time reporting is extremely important as funding agencies can withhold payment if project reports are delinquent. Late or unfilled reports can also affect future funding success.

In coordination with PI(s), the Grants Accountant prepares and sends financial reports/invoices to funding agency/sponsor for reimbursement of expenses incurred. If a narrative explanation of spending is requested by the funding source, the PI is responsible for preparing this information.