Office of Sponsored Projects Administration
201 Kinkead Hall / 859-257-9420
www.rgs.uky.edu/ospa/ospamain.htm

Back Issues

May 4, 2001

NIH Grants Policy Statement Revised

The National Institutes of Health (NIH) has announced publication of the revised NIH Grants Policy Statement (NIHGPS, rev. 03/01). This revised statement is effective for all NIH grants and cooperative agreements with budget periods beginning on or after March 1, 2001, and will supersede, in its entirety, the NIH Grants Policy Statement (10/98) as a standard term and condition of award. The NIHGPS published in October of 1998 remains the standard term and condition for all grants and cooperative agreements with budget periods that began between Oct. 1, 1998 and Feb. 28, 2001.

The NIHGPS makes available to NIH grantees, in a single document, up-to-date policy guidance that will serve as the terms and conditions of NIH awards. The NIHGPS (rev. 03/01) is available at http://grants.nih.gov/grants/policy/nihgps_2001/index.htm.

Notable Changes
Notable policy changes that are implemented with this NIHGPS include:

Clarifications
Expanded or clarified coverage has been provided in several areas, including the following:

Questions regarding the NIHGPS may be directed to the NIH Division of Grants Policy at (301) 435-0949 or the Grants Management Specialist identified on the NIH Notice of Grant Award.

Revision of the NSF Grant General Conditions (GC-1)

Effective April 1, 2001, new NSF awards and funding amendments to existing NSF grants will be subject to the revised Grant General Conditions (GC-1) dated 04/01. GC-1 identifies NSF awardee obligations and the general award terms and conditions that projects funded by the agency must comply with.

Changes of particular note include:

A comprehensive summary of the changes to GC-1 are available for review on the NSF website at http://www.nsf.gov/cgi-bin/getpub?gc101rev1a. The complete text of the GC-1 is available at http://www.nsf.gov/bfa/cpo/policy/start.htm.

Any questions regarding these changes may be directed to the Policy Office, Division of Contracts, Policy & Oversight on (703) 292-8243 or by e-mail to policy@nsf.gov.

NCURA Satellite Conference

NCURA Satellite Conference Compliance Issues Impacting Financial Research Administration
Presented by the Office of Sponsored Projects Administration

May 15, 2001
11:30 a.m.-3:30 p.m.
Student Center Theater

This videoconference will explore the requirements for compliance: both the tangible documentation and the "spirit" of complying with these requirements. The broadcast will focus on those aspects that primarily affect research administrators in departmental business offices and central post-award units. Our panelists will discuss strategies that may be employed to enhance compliance, the potential consequences for failure to comply, and will provide their perspectives in meeting the intent of complying with the agency requirements.

Faculty
Jerry Fife, Director of Grant and Contract Accounting, Vanderbilt University
Elizabeth Mora, Director of Sponsored Research Operations, Harvard University
Frank Zuraf, Vice President, Internal Audit at the Research Foundation, SUNY
Barbara Walsh, Manager, PricewaterhouseCoopers.

To sign up, call or e-mail Shelly Surgener at 7-9424 or sllora1@pop.uky.edu. Lunch will be provided for participants who register prior to the conference.

Budget Development Guidance

Salary escalation recommendation for raises is a four percent increase for each year of the grant. The initial year can be prorated for the portion of the project that will occur in the current fiscal year.

Salaries should be based on current actual salaries for existing UK employees plus a four percent raise unless salaries are being prorated to take into account the portion of the project period that will occur in the current fiscal year.

Sponsored Projects, http://www.uky.edu/Regulations/CAS/deptcost.pdf, as required under OMB Circular A-21 F.6.4.2 (http://www.whitehouse.gov/OMB/circulars/a021/a021.html).

New Positions. For guidance in determining estimates for new positions, contact UK's Human Resources Development; salaries for new positions should be consistent with the salaries for similar positions and responsibilities across campus.

Intra-university consultants should be used only in unusual circumstances and should be budgeted under personnel. On federal projects, the intra-university consultant must not be in the same department as the project or must be located at a remote location from the project (see OMB Circular A-21 J.8, http://www.whitehouse.gov/OMB/circulars/a021/a021.html). Intra-university consulting rates are limited to the faculty or staff member's current salary on an hourly basis plus a four percent annual raise projection. There are 2,080 hours in a 12-month UK appointment; 1,560 hours in a nine-month academic-year appointment. Fringe benefits must be calculated for intra-university consultants.

Fringe Benefits are budgeted for all positions at the appropriate rates. Fringe benefits cover FICA, retirement, and life and health insurance for all regular employees. Student fringe covers FICA

Non-salary escalation factor should be projected for all subsequent years of the project based on a 5% increase in costs.

Travel allowance costs should be reasonable, necessary, and based on university rates. Additional guidance on travel policies and procedures can be found at http://www.uky.edu/Regs/BPM/E/e05.pdf.

Foreign travel on federally funded projects requires that budget estimates and charges be made using a U.S. airline (American flag carrier).

Equipment is defined as non-expendable, tangible personal property having a useful life of more than one year and costs in excess of $1,000. If re-budgeting from another direct cost item, review award terms and conditions to ensure that agency prior approval is not required for the purchase of equipment.

Computer Equipment* is typically unallowable as a direct costs unless justified based on UK Costing Guidelines for Sponsored Projects. Costing Guidelines specify that a direct cost computer equipment justification must meet the following conditions:

General Purpose Equipment* is typically an unallowable cost under UK Costing Guidelines and is defined by the use of the equipment not being limited only to research, medical, scientific or other technical activities. Examples of general purpose equipment include office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles, and automatic data processing equipment.

Supplies necessary for the conduct of the project should be budgeted.

Office supplies* (legal pads, folders, pens, etc.) are unallowable unless the project meets the parameters set forth in the UK Costing Guidelines for Sponsored Projects (OMB Circular A-21 F.6.4.3 [http://www.whitehouse.gov/OMB/circulars/a021/a021.html] and Exhibit C [http://www.whitehouse.gov/media/pdf/a21-appx_c.pdf]). Examples of office supplies which may be charged directly are special markers need to label refrigerated samples or providing notebooks for a large number of workshop participants.

Software* is unallowable unless it meets the same conditions that permit the allowability of the purchase of computer equipment, see above.

Consultants provide a service or product for the project and their services are secured by using a Personal Services Contract (PSC). The Project Director or Principal Investigator does not control how or when the consultant performs the work. If they do, the person should be listed under Personnel. Some federal agencies have maximum rates for consultant compensation; refer to the specific agency's guidelines for further guidance. (For further guidance on the definition of a consultant, review IRS publication 15-A, Form SS-8, Ruling 87-41.) Consultants cannot be UK employees.

Contractual expenses include any contract for services you expect to let if the proposal is funded. Contractual expenses also include any subcontract whereby funds will be supplied to another university or entity as a result of this award. In most instances when a proposal includes a subcontract a separate budget should be submitted on sponsor forms for the subcontractor and the subcontract total is then listed as a lump sum (including Facilities and Administrative [F&A costs]) on the contractual line in UK's budget. Subcontractors are entitled to request F&A costs up to the amount allowed by sponsor guidelines or their negotiated indirect cost rate agreement.

Training Participant Costs are allowable but some agencies restrict the movement of trainee costs from the training participant budget line to other cost objectives without prior written approval by the agency. Review sponsor guidelines for re-budget requests that will transfer funds out of participant costs.

Other-Postage* is typically an indirect cost item, but may be allowable under UK Costing Guidelines if, for example, there is a requirement to mail surveys, conference registration packets, or manuals.

Other-Telephone* charges other than long distance are typically an unallowable costs based on the UK Costing Guidelines, but may be appropriate if a dedicated line is necessary solely for the performance of a sponsored project and will be removed at the conclusion of the project.

Other-Subscription* charges are typically an unallowable direct cost item unless justified under the UK Costing Guidelines.

Indirect Costs Charged as Direct Costs* in federal proposals need to have an asterisk next to the items and need to be supported by a CAS allowable justification statement. The asterisk should then be referenced at the end of the budget justification with the following statement These costs are normally treated as indirect by the University of Kentucky, but are being requested due to a special purpose or circumstance as provided for under the institution's costing guidelines and DS-2 disclosure statement. The CAS justification need only be included in proposals that are to be funded with federal funds.

Total Direct Costs are the total costs from all items budgeted in the proposal. Direct Costs are costs that will be used to directly support the program activities.

Modified Total Direct (MTD): Total direct cost minus exclusions is used to determine MTD. MTD excludes equipment, capital expenditures; charges for patient care, tuition remission, rental costs of off-site facilities, scholarships, and fellowships, as well as subcontract costs in excess of $25,000.

Facilities & Administrative Costs (Indirect Costs) are the costs that cannot be directly associated with the grant, but are incurred as a result of the university taking on the proposed activity. The University's indirect costs are based on actual university costs, with the rate being derived from a standard analysis of the university's annual expenses. Examples of indirect costs are university security, facility space usage, utilities, services provided by grant and contract development, purchasing, payroll, and a host of other factors. F&A cost is calculated based on the MTD total. See http://www.rgs.uky.edu/ospa/info.htm for UK's negotiated F&A rates. The rate applied to the specific project should be consistent with sponsor guidelines and the type and location of the project activities, unless a waiver of indirect cost has been approved by the appropriate signatory officials, demonstrated on the Internal Approval Form.

Total Cost includes total direct costs plus F&A.

The information provided here should be used as a general guide in all instances. When an agency provides specific budgetary directions, those directions should be followed or when UK Costing Guidelines for Sponsored Project provides more specific guidance than outlined here, that guidance should be followed. For determining assignment of item as a direct cost or indirect cost pool item, see the expenditure object codes in the UK Business Procedures Manual E-17-8 and the FRS Handbook.

Research and Graduate Studies • University of Kentucky