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Research Admin. Forum: Compliance Challenges (PPT) - CAT Forum

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    Research Admin. Forum: Compliance Challenges (PPT) - CAT Forum Research Admin. Forum: Compliance Challenges (PPT) - CAT Forum Presentation Transcript

    • Research Administration Forum May 26, 2004 Compliance Challenges: Allocation of Costs to Sponsored Projects                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
    • Today’s Agenda
      • Define our major research compliance challenges and the opportunities they afford
        • Staff and faculty awareness of the rules—sponsored research is a rapidly expanding enterprise
        • Federal activism on a few major issues
        • Under-recovery of faculty compensation
      • Outline our response—improve effectiveness of our research administration infrastructure
        • Increase awareness—training and consultation
        • Improve systems
        • Maximize grant recovery
      • Working together to deal with these challenges
    • Building the Research Enterprise
      • UC Davis Vision
        • Discovery
          • Growth in the level of extramural funding across all disciplines
    • Building the Research Enterprise
      • Research expenditures have nearly doubled in the last 10 years from $167 mm in 1994 to $324 mm in 2003
      • Growth in sponsored project funding (awards) has increased $160 mm in 1994 to $426 mm in 2003
      • With increased funding comes increased scrutiny by regulators
      • Growth in the infrastructure to support increased research has not kept pace
    • Building the Research Enterprise
      • UC Davis Vision
        • Engagement
          • Strengthen research at all levels by facilitating the application for and management of grants of all sizes across all disciplines
            • Development of training opportunities to facilitate more effective fiscal management of grants
    • WASHINGTON, D.C. — Northwestern University will pay the United States $5.5 million to settle allegations that the school violated the False Claims Act with regard to claims in connection with federally-sponsored medical research grants, the Justice Department announced today. The government alleged that Northwestern misled the United States into paying more money than the Chicago-area school was lawfully entitled to receive. http://www.usdoj.gov/opa/pr/2003/February/03_civ_076.htm CIV (202) 514-2007 TDD (202) 514-1888 FOR IMMEDIATE RELEASE THURSDAY, FEBRUARY 6, 2003 WWW.USDOJ.GOV
    • Components of an Effective Compliance Program
      • NIH OIG issued a notice in the Federal Register regarding the elements considered necessary for a comprehensive compliance program. (68 FR52783-52784 September 5, 2003)
        • Implement written policies and procedures
        • Designate a compliance officer and committee
        • Conduct effective training and education
        • Develop effective lines of communication
        • Conduct internal monitoring and auditing
    • Components of an Effective Compliance Program
      • NIH OIG issued a notice in the Federal Register regarding the elements considered necessary for a comprehensive compliance program. (68 FR52783-52784 September 5, 2003)
        • Enforce standards through well publicized disciplinary guidelines
        • Respond promptly to detected problems, taking corrective action, and report to Federal agencies
        • Define roles responsibilities – oversight responsibility
    • Accountability – Risks
      • Ten compliance risks in research administration
        • Effort reporting
        • Direct vs. indirect cost charging practices
        • Recharge center / service center rates
        • Fixed price agreements
        • Financial status reports
        • Charging costs at the end of a grant period
        • Appropriate charging of costs to benefiting grants
        • Mandatory cost sharing
        • Protection of human subjects
        • Protection and charging of animal subjects
    • Accountability – Major Risks
      • Compliance risks identified by the Federal Government
        • The proper allocation of charges to grant projects
        • Time and effort reporting, including accurate reporting of the commitment of effort by researchers
        • Use of program income
    • Accountability – Cost Allocation
      • Allowable costs
        • Reasonable
          • Arm’s length transaction?
          • Necessary
        • Allocable
        • Consistent treatment
          • Like treatment in like circumstances
    • Accountability – Cost Allocation
      • Unallowable costs
        • Administrative and clerical salaries
          • Major Project?
        • Don’t make allowable costs unallowable, or when good costs go bad
          • Flat assessments (5%)
          • Rates not approved by Campus Rate Committee
        • General purpose equipment?
        • Meals?
    • Accountability – Cost Allocation
      • UCD Cost Accounting Standards Disclosure Statement (DS-2)
        • Required by A-21
        • Filed by UCD on December 31, 1996 (Revised March 30, 2000)
          • Identifies UCD accounting practices, policies, and procedures for assigning costs to federally sponsored programs and to attest to the consistent treatment of those practices
        • Charging Practices for Federally Funded Grants and Contracts 1997
          • http://accounting.ucdavis.edu/EX/
    • Accountability Mrak Hall
    • Accountability – Other Issues
      • Cost Sharing
        • Any program or project cost that is not supported by the sponsor
        • Must meet A-21 cost principles: allowable, allocable, reasonable
          • Committed: Mandatory & Voluntary (non-federal sources)
            • Mandatory: Stipulated as a condition of the agreement.
            • Voluntary: Discretionary use of matching funds from gifts, departmental (19900) funds, academic year salaries
        • Must be documented in the University’s financial records.
        • Academic year salaries charged to project?
        • Project Overruns:
          • Must be tracked and accumulated (reported as research)
          • Cannot be charged to departmental administrative account
    • Accountability – Other Issues
      • Review of monthly ledgers
        • Does the PI know what’s been charged to the project?
          • Do expenditures match the project plan?
      • Cost transfers
        • Cost transfers completed within 90 days?
          • Moving expenditures results in inaccurate reports and is a red flag
            • Cash management issues
      • Effort Reporting
        • Is the PI signing?
        • Are necessary payroll transfers made?
    • Maximizing Grant Recovery
      • PI’s are expending effort on sponsored projects during the academic year
      • Not charging their effort to Federally sponsored projects can create compliance problems
        • Effort Reporting
        • Voluntary Cost Sharing
      • Recovering actual costs could provide resource options
    • 2002-03 Ladder Rank Salaries   $168,511,698 Total Salaries 92% 10,646,654 SVM 28% 60,193,823 SOM 100% 3,930,483 Law 70% 3,814,411 GSM 98% 1,162,511 Education 99% 17,600,956 DSS 89% 14,108,208 MPS 100% 12,854,367 HArCS 87% 18,565,985 COE 96% 9,650,504 DBS 99% $15,983,796 CAES to Gen Funds All Fund Sources   Percent Charged Total Ladder Salaries  
    • Maximizing Grant Recovery
      • Consider charging academic year salaries to sponsored projects
        • By reducing the percentage of salaries on general funds to 80% (excluding SOM)
          • $21.7 million in general fund savings would be available for re-budgeting on a current year basis
            • At the same time, reduces the risks associated with voluntary cost sharing
    • Maximizing Grant Recovery
      • Myths about charging AY salaries
        • Charging AY salaries is against OP Policy
        • The sponsor does not care how much time is accounted for
        • Charging salaries does not benefit the school/college/dept
        • Salary funds revert to OP if not used
    • Maximizing Grant Recovery
      • Facts about charging AY salaries
        • General fund savings can be re-budgeted on a current year basis
        • Not charging AY salaries when work is performed on the project exposes the University to compliance risks
          • Effort Reporting
          • Cost sharing
            • Could overstate UCD’s F&A Rate
          • CAS 501 – Consistency Estimating, Accumulating, and Reporting Costs
    • $$$$$$$
      Washington, DC    
    • Maximizing Grant Recovery
      • Where do we go from here?
        • Increase proposal budgets to include AY salaries
        • Create incentives
          • Distribution of 19900 balances
        • Avoid compliance problems associated with not charging AY salaries to grants:
          • Cost sharing
          • Effort reporting
    • Providing an Effective Environment for Research Administration
      • Enhance the infrastructure to support growth
        • Training
          • Certificate Series in Grants Administration
          • Web based courses
        • Systems
          • Electronic Research Administration
          • Effort Reporting System
          • Cost Sharing
    • Providing an Effective Environment for Research Administration
      • Protect our good reputation
        • Avoid legal/compliance problems
      • Provide an effective compliance environment
        • UCD Task Force on University Compliance
          • Charged August 7, 2003
    • Impact
      • Risks of Non-Compliance
        • Cost Disallowances, Penalties
        • Withholding of Payments
        • Withholding of Future Award
        • Designation as a High Risk Organization
        • Special Monitoring and Corrective Action Plans
        • Personal Liability
        • Criminal prosecution
    • Impact
      • What we don’t want
        • Too much control
          • Lack of balance
            • Cost vs. benefit
        • Gotcha type of approach
        • No, what’s the question?
        • Risk averse
        • Redundant processes
    • Impact
      • What we don’t want:
        • Vice Chancellor Klein to end up in jail.
      
    • Impact
      • What to remember
        • Know the rules, play by the rules
        • Be prepared to provide documentation that supports your action
          • A project/award is like your tax return
    • We Need Your Help
      • Set the “Tone-at-the-Top”
      • Designate officials within your unit who will be responsible for coordinating compliance efforts
      • Would serve as a point of contact that we can communicate with regarding compliance issues
      • Reinforce the elements necessary for a compliance program
      • Encourage participation in training programs
    • Questions?