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Compliance From Ground Zero: Current Issues Facing Administrators in Departmental and Central Offices   NCURA Region 1 Ann...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Presented by: </li>...
We Are in a Target-Rich Environment… and  …
We’ re Often Between a ROCK and a HARD PLACE
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Compliance: What do...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>What Are The Kinds ...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Outline: Common Com...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Co...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>I. Financial Compli...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Standards For Costs...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Expenditure Monitor...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Cost Transfers </li...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Cost Sharing </li><...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Effort Reporting </...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>Financial Reporting...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Co...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Co...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Co...
Compliance From Ground Zero - Finding Guidance <ul><li>III. Things to remember about OMB Circulars and Certain Other Feder...
Compliance From Ground Zero <ul><li>What are we complying with? </li></ul><ul><li>Key guidance is contained in a number of...
Compliance From Ground Zero <ul><li>OMB Circular A21 and Other  Cost Principle Basics   </li></ul><ul><li>Basic Cost Princ...
Compliance From Ground Zero <ul><li>Cost Principles e.g. A21 (continued) </li></ul><ul><li>Direct Costs     </li></ul><ul>...
Compliance From Ground Zero <ul><li>OMB Circular A110- Uniform Administrative Requirements:  </li></ul><ul><li>Establishes...
A-110, cont. <ul><li>A110 Uniform Administrative Requirements (continued): </li></ul><ul><li>Written procedures to minimiz...
Compliance From Ground Zero   Current Issues from Departmental and Central Office Perspectives <ul><ul><li>OMB Circular A1...
NIH Grants Policy Statement <ul><li>NIH Grants Policy Statement contains information in addition to the OMB circulars whic...
Knock - knock….. <ul><li>III. Audits and Site Visits: </li></ul><ul><li>OMB Circular A-133 </li></ul><ul><li>Federal Agenc...
Compliance  <ul><li>IV: Training  </li></ul><ul><li>Compliance Training Programs </li></ul><ul><li>Compliance Office </li>...
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Transcript of "Compliance From Ground Zero: Current Issues Facing ..."

  1. 1. Compliance From Ground Zero: Current Issues Facing Administrators in Departmental and Central Offices NCURA Region 1 Annual Meeting May 17, 2005, Mystic CT.
  2. 2. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Presented by: </li></ul><ul><li>Vivian Holmes- Harvard Medical School </li></ul><ul><li>Mark Daniel- Partners Healthcare System Inc. </li></ul>
  3. 3. We Are in a Target-Rich Environment… and …
  4. 4. We’ re Often Between a ROCK and a HARD PLACE
  5. 5. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Compliance: What do we really mean? </li></ul><ul><ul><li>Polices, Procedures, and Business Processes </li></ul></ul><ul><ul><li>Systems </li></ul></ul><ul><ul><li>Checks and Balances </li></ul></ul><ul><ul><li>Roles and Responsibilities </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Documentation </li></ul></ul><ul><ul><li>Stewardship of Sponsored Funds </li></ul></ul><ul><ul><li>Federal Regulations and Policies </li></ul></ul>
  6. 6. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>What Are The Kinds of Compliance Issues We Deal With Every Day? </li></ul><ul><li>Departments </li></ul><ul><li>Central Offices </li></ul><ul><li>Institutional </li></ul>
  7. 7. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Outline: Common Compliance Issues </li></ul><ul><li>I. Financial </li></ul><ul><ul><li>Budgeting </li></ul></ul><ul><ul><li>Standards for Costs </li></ul></ul><ul><ul><li>Expense Approval and Monitoring </li></ul></ul><ul><ul><li>Cost Transfer </li></ul></ul><ul><ul><li>Cost Sharing </li></ul></ul><ul><ul><li>Effort Reporting </li></ul></ul><ul><ul><li>Financial Status Reporting </li></ul></ul>
  8. 8. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Compliance Issues That We Deal With: </li></ul><ul><li>Recharge/Service Centers </li></ul><ul><li>Subrecipients </li></ul><ul><li>Clinical Research Billing </li></ul><ul><li>Documentation Standards, Records </li></ul><ul><li>Non-Financial Reporting </li></ul><ul><li>Humans and Animals </li></ul><ul><ul><li>Ethics </li></ul></ul><ul><ul><li>Roles and Responsibilities </li></ul></ul><ul><li>III. Guidance/Federal Regulations and Audits </li></ul><ul><li>IV. Training </li></ul>
  9. 9. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>I. Financial Compliance Issues </li></ul><ul><li>Budgeting </li></ul><ul><ul><li>The need for budgets </li></ul></ul><ul><ul><li>Responsibilities of the parties in the budgeting process </li></ul></ul><ul><ul><li>Are annual budgets developed for sponsored projects and adjusted as needed? </li></ul></ul>
  10. 10. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Standards For Costs </li></ul><ul><li>Consistency </li></ul><ul><li>Allocability </li></ul><ul><li>Allowability </li></ul><ul><li>Reasonableness </li></ul><ul><li>Documentation, Support </li></ul><ul><li>CAS </li></ul>
  11. 11. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Expenditure Monitoring </li></ul><ul><ul><li>Grant expenditures must be reviewed, by Department Administrators each month and variances understood </li></ul></ul><ul><ul><li>Late expense monitoring is inefficient and creates risk </li></ul></ul><ul><ul><li>PIs must be kept informed of expenses and balances </li></ul></ul><ul><ul><li>Shadow Systems </li></ul></ul><ul><ul><li>Institutional Systems </li></ul></ul>
  12. 12. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Cost Transfers </li></ul><ul><ul><li>Retroactive transfers of expenditure from one account to another as a result of errors, oversight, re-budgeting, etc.. </li></ul></ul><ul><ul><li>Frequent and/or undocumented and unjustified cost transfers may indicate problems </li></ul></ul><ul><ul><li>Must be managed </li></ul></ul><ul><ul><li>Must be allowable , allocable, documented, justified, and authorized </li></ul></ul><ul><ul><li>Can’t transfer expenses from overspent grants to other grants </li></ul></ul><ul><ul><li>Late- over 90 days old </li></ul></ul><ul><ul><li>Cost transfers should be used to correct errors not to manage the grant funds . </li></ul></ul>
  13. 13. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Cost Sharing </li></ul><ul><ul><li>Project costs not borne by the sponsor </li></ul></ul><ul><ul><li>Commitments made in proposal that support the project but is not paid for by the sponsor </li></ul></ul><ul><ul><li>May be required by the sponsor as part of the grant program (Mandatory) or voluntarily offered by the grantee (Voluntary) </li></ul></ul><ul><ul><li>Impacts calculation of indirect costs </li></ul></ul><ul><ul><li>All parties must understand the total costs </li></ul></ul><ul><ul><li>Policies </li></ul></ul>
  14. 14. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Effort Reporting </li></ul><ul><ul><li>Determines and supports salary (and FB) costs (including cost shared effort) charged to sponsored agreements </li></ul></ul><ul><ul><li>Involves programmatic and cost compliance issues and both direct and indirect costs </li></ul></ul><ul><ul><li>Acceptable methods </li></ul></ul><ul><ul><li>Certified Effort vs Charges to sponsored agreements </li></ul></ul>
  15. 15. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>Financial Reporting </li></ul><ul><ul><li>Financial Status Reports </li></ul></ul><ul><ul><li>Cash Reports </li></ul></ul><ul><ul><li>90 day timeframes </li></ul></ul>
  16. 16. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Compliance Issues That We Deal With: </li></ul><ul><li>Recharge/Service Centers </li></ul><ul><li>Monitoring Our Subcontractors </li></ul><ul><li>Clinical Research </li></ul><ul><ul><li>Billing Patient Care Costs </li></ul></ul><ul><ul><li>Clinical trial budgets and costs, including PI effort </li></ul></ul><ul><ul><li>Documentation and Records </li></ul></ul><ul><ul><li>Policies and Procedures: What to Save and for How Long </li></ul></ul><ul><ul><li>Source documents, paper trail vs. electronic </li></ul></ul><ul><ul><li>Non-Financial Reports: progress, inventions, equipment </li></ul></ul><ul><ul><li>Inventory </li></ul></ul>
  17. 17. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Compliance Issues That We Deal With: </li></ul><ul><ul><li>Human Subjects; IRB </li></ul></ul><ul><ul><li>Animals </li></ul></ul><ul><ul><li>Conflict of Interest, RCR </li></ul></ul>
  18. 18. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><li>II. Other Common Compliance Issues That We Deal With (cont): </li></ul><ul><li>Roles and Responsibilities: </li></ul><ul><li>Faculty and Research Administration’s perceptions and understanding about their respective roles often differ </li></ul><ul><ul><li>some faculty understand / want their role to be limited to scientific or technical issues </li></ul></ul><ul><ul><li>some think PI should have total control </li></ul></ul><ul><li>Departmental Administrators are often unsure about their role and responsibilities or abdicate them. (caught between a rock and hard place) </li></ul><ul><li>Research Administration’s and Research Accounting’s perceptions about their respective roles sometimes overlap; contributing to bottlenecks, confusion, frustration. </li></ul>
  19. 19. Compliance From Ground Zero - Finding Guidance <ul><li>III. Things to remember about OMB Circulars and Certain Other Federal Agency Polices: </li></ul><ul><ul><li>In many cases they provide “ guidance ” to the agencies </li></ul></ul><ul><ul><li>Often allow for some interpretation </li></ul></ul><ul><ul><li>Many agencies often have their own implementation standards that may differ from each other </li></ul></ul><ul><ul><li>Agencies generally may not be more restrictive, add additional requirements, or reduce minimum requirements unless authorized by law or approved by OMB. </li></ul></ul>
  20. 20. Compliance From Ground Zero <ul><li>What are we complying with? </li></ul><ul><li>Key guidance is contained in a number of different federal regulations including: </li></ul><ul><li>OMB Circular A-21 Cost Principals for Higher Education </li></ul><ul><li>OMB Circular A-110 Uniform Administrative Requirements.. </li></ul><ul><li>OMB Circular A-133 Single Audits </li></ul><ul><li>NIH and NSF Grants Policy Manuals </li></ul><ul><li>Other Federal Policies, Regulations and Guidelines </li></ul>
  21. 21. Compliance From Ground Zero <ul><li>OMB Circular A21 and Other Cost Principle Basics </li></ul><ul><li>Basic Cost Principles for Organizations Receiving Federal Awards </li></ul><ul><ul><li>Educational Institutions: OMB Circular A21 </li></ul></ul><ul><ul><li>Non-Profit Organizations: OMB Circular A122 </li></ul></ul><ul><ul><li>Hospitals </li></ul></ul><ul><li>These regulations establish principles for determining costs applicable to grants, contracts, and other agreements. </li></ul><ul><li>The principles are designed to provide that the Federal Government bear its fair share of total costs……….. </li></ul><ul><li>Agencies are not expected to place additional restrictions on individual items of cost. </li></ul>
  22. 22. Compliance From Ground Zero <ul><li>Cost Principles e.g. A21 (continued) </li></ul><ul><li>Direct Costs </li></ul><ul><li>Direct costs are those costs that can be identified specifically with a particular sponsored project ,  an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. </li></ul><ul><li>Indirect Costs </li></ul><ul><li>Indirect Costs, also sometimes referred to as F&A (facilities and administrative) costs F&A ( INDIRECT COSTS ) costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. </li></ul>
  23. 23. Compliance From Ground Zero <ul><li>OMB Circular A110- Uniform Administrative Requirements: </li></ul><ul><li>Establishes Administrative Standards that Grantees Must Comply With. For example: </li></ul><ul><li>Records that identify adequately the source and application of funds for federally sponsored projects </li></ul><ul><li>Effective controls over and accountability for all funds, property and other assets. </li></ul><ul><li>Comparisons of outlays with budget amounts for each award. </li></ul>
  24. 24. A-110, cont. <ul><li>A110 Uniform Administrative Requirements (continued): </li></ul><ul><li>Written procedures to minimize the time elapsing between the transfer of funds to the recipient from the U.S. Treasury and the issuance or redemption of checks, .. </li></ul><ul><li>Written procedures for determining the reasonableness, allocability and allowability, of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award.   </li></ul><ul><li>Accounting records including cost accounting records that are supported by source documentation. </li></ul><ul><li>Equipment Management standards.. </li></ul><ul><li>Close-out standards.. </li></ul>
  25. 25. Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives <ul><ul><li>OMB Circular A133: Audit </li></ul></ul><ul><ul><ul><li>Single Audit Act consolidates federal audits </li></ul></ul></ul><ul><ul><ul><li>One annual audit </li></ul></ul></ul><ul><ul><ul><li>Initiated during FY1992 ( first year covered 2 FYs); circular has been updated several times since then </li></ul></ul></ul><ul><ul><ul><li>Grantees retain outside firm to conduct audit of compliance with federal regulations </li></ul></ul></ul><ul><ul><ul><li>Grantees, federal agencies and auditors went through a learning process during first few audit cycles </li></ul></ul></ul><ul><ul><ul><li>Data collection forms sent to Federal Clearinghouse </li></ul></ul></ul><ul><ul><ul><li>Internal auditors may perform some of the field work </li></ul></ul></ul>
  26. 26. NIH Grants Policy Statement <ul><li>NIH Grants Policy Statement contains information in addition to the OMB circulars which is specific to NIH awards and grantees such as: </li></ul><ul><ul><li>SNAP guidelines </li></ul></ul><ul><ul><li>modular budgets </li></ul></ul><ul><ul><li>salary cap information </li></ul></ul><ul><ul><li>application of rates </li></ul></ul><ul><ul><li>prior approval requirements </li></ul></ul><ul><ul><li>roles and responsibilities of the parties </li></ul></ul><ul><ul><li>other </li></ul></ul><ul><li>Updated periodically </li></ul>
  27. 27. Knock - knock….. <ul><li>III. Audits and Site Visits: </li></ul><ul><li>OMB Circular A-133 </li></ul><ul><li>Federal Agencies </li></ul><ul><li>Internal Audits </li></ul><ul><li>Non-Federal Audits </li></ul><ul><li>Whistle Blower Audits </li></ul><ul><li>Fraud Audits </li></ul><ul><li>Site visits </li></ul>
  28. 28. Compliance <ul><li>IV: Training </li></ul><ul><li>Compliance Training Programs </li></ul><ul><li>Compliance Office </li></ul><ul><li>Questions: </li></ul>
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