Project Management

Audit of Sponsored Projects

All sponsored projects are subject to audit by the sponsoring agency and are the responsibility of the Office of Sponsored Projects (OSP). If a department/Principal Investigator is contacted directly by the Auditor, the Auditor needs to be referred to OSP. To reduce cost and time to sponsoring agencies and the university the Federal government has adopted a policy of appointing one Federal agency as the “cognizant audit agency.” The Department of Health and Human Services (DHHS) is the cognizant audit agency for Northern Arizona University.

Budget Modifications

Budget modification under expanded authority

Some federal agencies have waived cost-related prior approvals and allow an institution to decide minor budget changes under expanded authorities. Under expanded authorities, significant re-budgeting means that a single direct cost category changes more than 25 percent of the total award or $250,000, whichever is less. These expanded authorities are automatically in force for grants that support research, but they do not apply to contracts. A budget modification under expanded authority cannot not change the Scope of Work.  Scope of Work changes must be approved by the agency.

What is the process?

For a budget modification the PI will contact their Fund Manager and/or Post Award Administrator when he/she deems it necessary for a budget modification on their award. A request for a budget modification can occur anytime during the life of the grant.

Prior Approval of a one-time no cost extension and/or budget modification under expanded authority from the Chairs and Deans is no longer required. Notification to the Chairs and Deans will be on the back end of the process once the action(s) has taken place within the PeopleSoft System.

Budget modification not subject to expanded authority

Where expanded authority does not apply, the award terms and conditions should be closely evaluated to determine if budget modifications are allowable and whether or not the sponsor requires prior approval for a budget modification.

What is the process?

If there are no special terms and conditions that restrict no-cost extensions, the PI and Grant and Contract Administrator and/or Grant and Contract Coordinator will work together to prepare a request that follows NAU and sponsor guidelines.

• For requests that require prior approval from the sponsor, the PI will submit a request to OSP and work with a Grant and Contract Administrator and/or Grant and Contract Coordinator to obtain both NAU- and sponsor-required approvals and documentation. OSP will then submit a formal request to the sponsor for approval.
• For requests that do not require prior approval from the sponsor, the PI will submit a request to OSP and work with a Grant and Contract Administrator and/or Grant and Contract Coordinator to obtain NAU-required internal authorization and documentation to submit to the AOR for approval.

Related NAU Policies/Procedures:

• Prior Approvals – OSP UG Comprehensive Guide  – A guide for federal awards and selected funding increments (incorporating the Uniform Guidance) with award dates of December 26, 2014 or later.
• Sponsored Project Action Request (SPAR) Form– The PI may “cut & paste” the budget reallocation section from this form and send the request via an email.

Effort Distribution reporting is completed using a web-based system with electronic routing and email notification for updating and certifying effort. Effort reports are system generated for employees who are paid from sponsored projects. Effort certification is done semi-annually for all eligible employees. Before a form is certified it must be pre-reviewed by the Fund Manager assigned to the department/center. Access is limited only to the Fund Managers pre-reviewing forms and the certifiers (PIs and faculty being paid from a sponsored project).

Effective August 2024, NAU is moving from using Huron eEDR to Cayuse Project Effort for effort distribution reports.

If you have any questions please direct them to the Office of Sponsored Projects (OSP) Post-Award Director, or NAU-OSP@nau.edu

Equipment

Equipment

NAU Property Administration Policy states that equipment costing $5,000 and has a useful life of more than one year should be capitalized.

Determining Title of Equipment

To determine where the title of property purchased with external funds will reside, first examine the funding sponsor guidelines.

General Guidelines

Federal Agencies

The Federal government uses $5,000 or more per unit cost to determine whether title resides with the Federal government or the University for Property purchased with Federal funding.

• Items costing under $5,000 title resides with the University
• Items costing $5,000 or more ownership normally will provide the University conditional title based upon the following

Pay particular attention to items vesting conditional title when determining use of those items.

• The University may continue to use property on the same project or program for which it was purchased even though Federal funding has ended.
• If the property is no longer needed for the particular program for which it was purchased the property may be used for other programs or projects which receive Federal funding from the original funding agency.
• If no programs under that particular funding require the use of the property or equipment then that equipment may be used on other programs which receive funding from other Federal agencies.
• In the event there are no other Federal programs for which the property may be used then the University must submit a request for disposition instructions to the original Federal funding agency. The Federal government is required to issue disposition instructions within 120 calendar days from the date of the request. If disposition instructions are not received within the appropriate time frame then the University is required to sell the property. The proceeds of the property shall be disbursed using the Federal calculation found in OMB Uniform Guidance. If disposition instructions are received then the University follows the order of disposition in the notice.

Non-Federal Sponsors

These sponsors may have different guidelines and title of equipment should be determined on an individual case basis.

NOTE: For property purchased on fixed price contracts title generally resides with the University. It is important to always review the rules and regulations applicable to each individual project.

Related NAU Policies/Procedures:

• NAU Property Administration Policy
• NAU Policy CMP-130

No-Cost Extension

No-cost extension under expanded authority

Some federal sponsors have delegated the responsibility for approving no-cost extensions for grants to the institution under Expanded Authorities. NSF, NIH, ARO, AFOSR, NEA, NEH, DOE and DoED allow an institution to internally approve a one-time request to extend the end date of the project period up to an additional 12 months, unless otherwise noted in the award terms and conditions. OSP will forward the appropriate notification to the sponsor. A letter or notice will need to be submitted to the sponsor which notifies them that the extension has been granted and documents the justification for the extension approval.

What is the process?

For a one-time no cost extension the Fund Manager and/or Post Award Administrator will be working closely with the PI during the 90 day close out process. It is at this time that the determination that a one-time no cost extension is warranted. A no-cost extension may be requested by the Principal Investigator when all three of the following conditions are met:

• The end of the project period is approaching, AND
• There is a programmatic need to continue the research, AND
• There are sufficient funds remaining to cover the extended effort

The PI and Fund Manager and/or Post Award Administrator will work together to provide the proper documentation for the award file, once the documentation has been compiled the award end date will be extended within the PeopleSoft Financial System. OSP will notify the agency that the end date has been extended.

No-cost extensions not subject to expanded authority

Where expanded authority does not apply, the award terms and conditions should be closely evaluated to determine if no-cost extensions are allowable and whether or not the sponsor requires prior approval for a no-cost extension.

What is the process?

If there are no special terms and conditions that restrict no-cost extensions, the PI and Grant and Contract Administrator and/or Grant and Contract Coordinator will work together to prepare a request that follows NAU and sponsor guidelines.

• For requests that require prior approval from the sponsor, the PI will submit a request to OSP and work with a Grant and Contract Administrator and/or Grant and Contract Coordinator to obtain both NAU- and sponsor-required approvals and documentation. OSP will then submit a formal request to the sponsor for approval.
• For requests that do not require prior approval from the sponsor, the PI will submit a request to OSP and work with a Grant and Contract Administrator and/or Grant and Contract Coordinator to obtain NAU-required internal authorization and documentation to submit to the AOR for approval.

Related NAU Policies/Procedures:

• Prior Approvals – OSP UG Comprehensive Guide – A guide for federal awards and selected funding increments (incorporating the Uniform Guidance) with award dates of December 26, 2014 or later.
• Sponsored Project Action Request (SPAR) Form– The PI may “cut & paste” the budget reallocation section from this form and send the request via an email.

Northern Arizona University (NAU)

Purpose: Document process for internal notifications and reporting to NSF for compliance with the NSF Harassment term and condition

Read more

Paid absences and fringe benefits

Treatment of Paid Absences

Vacation, holiday, sick leave pay and other paid absences are included in salaries and wages and are charged to federal projects as part of the normal charges for salaries and wages. Separate charges for the cost of these absences are not made.

Treatment of Other Fringe Benefits

Our organization charges the actual cost of each fringe benefit direct to federal projects. However, it uses a fringe benefit rate which is applied to salaries and wages in budgeting fringe benefit cost under project proposals. The following fringe benefits are treated as direct costs: FICA, health insurance, pension plan, unemployment insurance, and workers compensation.

Participant support costs

Overview

The sponsoring agency provides funds to the university to conduct a workshop, conference, seminar, symposia or other short-term training or information sharing activity. A participant is not involved in providing deliverables to NAU or to a third party. A participant would not be terminated or replaced if they did not perform certain services. Participants in the activity may be paid for that participation if such payments are in the approved budget. Contact the assigned Fund Manager or Post Award Administrator for assistance in determining if a participant payment is appropriate.

Program Participants

A Participant is the recipient of training provided at a workshop, conference, seminar, symposium or other short-term instructional or information sharing activity funded by an external grant or award, or the beneficiary of the project or program funded by an external grant or award. Participant Payments are reported to the IRS on a 1099 misc.

• the participant is not involved in providing deliverables to the university or to a third party. A deliverable can be defined as a research report provided to a third party or the providing of research results to a third party.
• the participant would not be terminated and a replacement found if he or she did not perform certain services, other than failure to attend or participate in the sponsored event or training program.

Participant Payments

The sponsored budget must allow payment of small non-compensatory payments (stipends) and/or reimbursements of travel costs or other out-of-pocket costs incurred to support attendance at a workshop, conference, seminar, symposia or other short-term training or information sharing activity. Participant support is distinguished from student support in that non-compensatory stipends for student support are for the objective of obtaining a degree, whereas participants are usually not students and, if they are, the non-compensatory stipend is not to support their degree-seeking enrollment. Participant expenses may be paid directly or as reimbursement to the individual.

How to Process Participant Payments and Reimbursements

Participant Payments (not reimbursements) are processed using an Amount Only Requisition/Purchase Order. A Vendor ID is needed for each participant and can be established by using the Vendor Registration Application form from Contracting and Purchasing Services. If desired, direct deposit can be established by submitting a Request for Direct Deposit form as well. Requisitions must be accompanied by the Sponsored Project Participant Certification form and approved by the Office of Sponsored Projects. Use Category Code 96402: Participant-Incentive Payment (Account Code 754101).

When initiating the Receiver to release payment(s), email a completed Participant Payment Disbursement form to Accounts Payable to schedule one or multiple payment dates.

Participant expense reimbursements are processed according to Comptroller Policies and Procedures 421-02: Interviewees / Non-Employees and 420-01: Faculty and Staff Reimbursements (also applies to non-NAU employees). Choose a Category Code from the list below which best matches the expense being reimbursed:

Direct-paid expenses are processed according to standard procedures using the Category and Account codes listed above.

Program Income

From the Program Income Policy.

Policy

Sponsored projects funded by grants and receiving program income during the project period must account for such income in a manner that will permit its identification and treatment consistent with the requirements of the federal/agency sponsor. Program income from projects supported by federal contracts will be accounted for according to the terms of the contract.

Definitions

Program income is defined as gross income earned by a recipient from activities part or all of the cost of which is either borne as a direct cost towards meeting a cost sharing or matching requirement of a grant. (Uniform Guidance Part CFR Title 2, Chapter II, part 200.307)

Examples of program income include fees for services, usage or rental fees, proceeds from sale of tangible personal property (such as books, manuals, video materials, etc.) and patent or copyright royalties. Some sponsoring agencies allow grantees to exempt royalty income from treatment as program income. Program income can also be interest earned on pre-paid agreements provided by the sponsor.

Proposals for projects must indicate whether or not program income is anticipated during the project period. This indication must also be made on the internal transmittal form, either as a checklist item or under the remarks section. In addition, funded projects that anticipated receiving program related income must indicate this expectation when a restricted center is established.

There are three methods for treating program income, as described below. The method applicable for a given project will be either the method prescribed by the sponsor’s grant policy, the terms of the grant, or if no specific guidance is provided by the award terms, the first alternative method below. The second or third alternative may be authorized by the sponsoring agency, either as stated in the grant or upon written request by Northern Arizona University (NAU).

Alternative Methods and Procedures

Deduction Alternative (offset to sponsor’s costs)

Requirements: All program income will be used to reduce the amount of the federal award. For federal projects funded by letter of credit, the maximum amount of federal funds that will be requested is the total of the federal award less the program income deposited. For federal projects not funded through letter of credit, the amount of program income received will be deducted from the amount billed to the agency. Total program income received will be reported on the appropriate federal/agency financial report form.

Matching Alternative (offset to cost sharing or matching)

Requirements: Program income is used to pay for allowable matching or cost-sharing expenses, if matching or cost sharing is a feature of the project budget. Program income is used for costs for costs during the project period unless the sponsor authorizes deferral to a later period.

Procedures: All program income will be deposited to account 739135 in the unrestricted center funds used for cost sharing expenditures. Total program income received will be reports on the appropriate federal financial forms.

Additional Cost Alternative (increase in the available budget)

Requirement: Program income is used for costs over and above the allowable costs of the project, over and above the costs supported by the sponsor. If these costs further the objectives of the statute under which the federal grant was made, the costs supported by the program income need not be specifically permissible as charges to federal grants.

Procedures: The sponsor will direct Procedures. A separate restricted People associated project will be established to account for program income and expenses. Indirect costs will not be applied to these expenditures. Once the project has ended and been financially closed, unspent income and any future income received will be deposited in an unrestricted funds and used in accordance with the institutional policy established in each school or center. The sponsor may elect to apply the deductive alternative to program income received in excess of a specified amount (see PHS default method below). In those cases, a combination a combination of both the additional costs and alternatives will be used.

Total program income received will be reported on the appropriate federal/agency financial forms.

When No Method is Specified in Award Document

Federal Program Income

Default Treatment When Earned During the Grant Period (When No Method is Specified in Award Document):

Notes:

Approval may be requested from a sponsor to treat program income by applying a different alternative.

Contracts from federal agencies will define the treatment of program income in the contractual terms and conditions.

Income earned after the grant period is not subject to federal reporting requirements (except for NEH – see article 20 of the NEH General Grant Provisions) and should be expended in accordance with institutional policy.

Questions regarding this policy should be directed to

Office of Sponsored Projects (OSP) Post-Award Director, or
NAU-OSP@nau.edu

Sponsored Projects Record Retention

From the Sponsored Projects Records Retention Policy.

Purpose

To determine a sufficient time to retain university sponsored project records to remain in compliance with sponsor regulations and Comptroller Policy (CMP) 103.

What is Record Retention?

Records retention is the term applied to safeguarding of important records that document decisions, policies, financial transactions, and internal controls. NAU’s Sponsored Projects Records Retention Policy ensures that NAU maintains the integrity of the records for an appropriate and/or required period of time.

Historically records with paper but today the also include other forms including electronic records.

Background

Departments should retain financial records in order to comply with sponsor restrictions and Arizona State law. Under the terms of awards to NAU, sponsors and auditors have the right to access all official University records associated with a project. NAU is obligated to make such records available for examination. Maintaining source documents is a means to substantiating charges to grants and contracts. Interdepartmental billing computations and receipt acknowledgements for services or materials are particularly important source documents for this purpose.

Departmental Record Retention

All NAU departments for the periods listed below shall retain financial records for Sponsored Projects.

Retention Periods for Financial Records: