Post-Award Administration

Once an award has been accepted by the College, it is the responsibility of the Grants Administrator to establish an account for the award.

The Grants Administrator will inform the PI of the account number assigned to the award, provide a fully-executed copy of the award agreement, the general terms and conditions and the reporting requirements for the award.

The account is set-up in accordance with the approved budget and the sponsor’s specified terms and conditions. The Grants Administrator will meet with the PI before setting up the budget to ensure the object codes chosen in the College’s accounting system will reflect the categories of the approved budget. It is the responsibility of the PI to ensure that the funds are expended in accordance with the award agreement. Please see section Internal Approvals and Expanded Authority for policies concerning deviations from the approved budget and/or changes to the terms and conditions of the award.

Typically research awards are made to an institution, not to the investigator who has prepared the proposal (exceptions to this are fellowship awards from some federal agencies which are made directly to individuals). Therefore, the institution formally accepts responsibility for the project. Consequently, institutional policies and procedures should clearly state the responsibilities of all parties. The principal investigator bears overall responsibility for a funded project, including the scientific and technical aspects. The financial and administrative aspects will be handled by the institution.

Babson College has the role of a legal agency for the research projects sponsored by the government, industry, or foundations in accordance with established Federal administrative standards. This includes fiduciary responsibility for all funds. The applicable requirements are contained in:

OMB Circular A-110

Uniform Administrative Requirements For Grants and Agreements With Institutions of Higher Education, Hospitals and Other Non-Profit Organizations.

OMB Circular A-21

Cost Principles for Educational Institutions.

OMB Circular A-133

Audits of States, Local Governments, and Non-Profit Organizations.

In addition to the documents listed above, each federal and non-federal awarding agency will have its own guidelines and grant conditions which the college must follow. Also, the college must follow the generally accepted accounting principles as outlined in Government Auditing Standards issued by the Comptroller General of the United States.

Government-sponsored research is normally carried out under contracts, cooperative agreements, or grants, depending on which agency is sponsoring the work.

Although government grants and contracts are subject to differing statutory requirements and regulations, there is no significant difference between them in terms of Babson research policy and administrative procedure. The administration of contracts from private organizations and grants from foundations does not differ markedly from that of government grants, cooperative agreements, and contracts and for the sake of uniformity, will be administered by the same Babson research and administrative policies and procedures. In general, all Babson policies and procedures will be followed for grants from foundations, except in the area of faculty compensation.

Under Federally Sponsored Research

The federal government regards research as one of the normal functions of faculty members at institutions of higher education. Compensation for time normally spent on awards within the term of appointment is deemed to be included within the faculty member's regular organizational salary. Grant funds may not be used to augment the total salary or rate of salary of faculty members during the period covered by the term of faculty appointment or to reimburse faculty members for consulting or other time in addition to a regular full-time organizational salary covering the same general period of employment. Exceptions may be considered under certain NSF science and engineering education program solicitations for weekend and evening classes or for administrative work done as overload.

For periods outside the academic year, the summer months or other periods not included in the period for which the base salary is paid, salary is to be paid at a monthly rate not in excess of the base salary divided by the number of months in the period for which the base salary is paid. NSF policy on funding of summer salaries (known as NSF's two-ninths rule) remains unchanged: proposal budgets submitted should not request, and NSF-approved budgets will not include, funding for an individual investigator which exceeds two-ninths of the academic year salary. This limit includes summer salary received from all NSF-funded grants.

Under Non-Federally Sponsored Research

For sponsored programs funded by private foundations, the College may allow extra compensation above base salary but that compensation must be negotiated and approved by the Division Chair, the Provost and the Vice President of Finance. In no event will this compensation exceed 20% of base salary. Please see the Other Faculty Compensation Form at the end of this section.

The following costs are unallowable as direct costs on any sponsored project:

• Alcoholic beverages
• Entertainment, including non-business meals
• Executive lobbying
• General purpose equipment
• Goods for personal use
• Social memberships
• Fund raising
• First class travel
• Fines and penalties

An article of nonexpendable property having a useful life of more than one year and an acquisition cost which equals or exceeds $5,000.

Special Purpose Equipment

“Special purpose equipment” means equipment which is used only for research, medical, scientific, or other technical activities. Expenditures for special purpose equipment are allowable as direct charges, and when it is included in the proposed budget and approved by the sponsor, prior approval for purchase is not required. When equipment is not included in the approved budget or there is a change in what was proposed, prior approval must be coordinated with the Grants Administrator.

General Purpose Equipment

“General purpose equipment” means equipment whose use is not limited to research, medical, scientific, or other technical activities. Examples of general purpose equipment include office equipment and furnishings, reproduction and printing equipment, motor vehicles, and automatic data processing equipment.

Some sponsors prohibit the purchase of equipment within the last six months of the project period.

Costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business for the sponsored project.

At Babson College, such costs will be charged on an actual basis and are reimbursed with original receipts. The travel reimbursement request must contain a statement on the purpose of the travel and clearly state how it relates to the project.

Any air transportation to, from, between, or within a country other than the U.S. must be performed by or under a code-sharing arrangement with a U.S.-flag air carrier if service provided by such a carrier is available. This applies even though:

• Service can be performed at less cost by a foreign-flag air carrier
• Foreign-flag carrier service is more convenient for the traveler
• Service by a foreign-flag air carrier is preferred by, or is more convenient for the traveler

Subcontracts

The Grants Administrator, in coordination with the PI, is responsible for preparing and overseeing subcontracts as approved in the sponsored project award and issued by Babson College to other organizations. In general, the subcontractor is subject to the same terms and conditions of the award as is Babson College. Therefore, the subcontract agreement will contain specific terms and conditions, an approved budget and a statement of work. The subcontract is reviewed and approved by the PI. To be binding, the subcontract must be signed by the Controller. Extensions and changes to the subcontracts are made by the Grants Administrator based on the approval of the primary sponsor.

Consultants

Before hiring a consultant, it must first be decided whether the individual is indeed a consultant or if he/she should be paid as an employee. Using I.R.S. guidelines, Business and Financial Affairs can assist the PI in making that determination.
The following documentation will be required:

• A signed Professional Consulting Agreement which contains a description of work to be performed, how the work relates to the project, the period of performance, and the total to be paid, and proof of insurance from the consultant.
• A signed invoice from the consultant which must include the consultant’s full name, home address, a brief description of work performed, hours or days worked, rate of pay, and total amount due. This invoice must be submitted with each request for payment.

Expenditure Processing

The Business and Financial Affairs Division is responsible for monitoring the financial activity on contracts and grants to ensure compliance with College policies and procedures and sponsor requirements. The Division accomplishes this by reviewing all check requisitions, purchase orders, payroll requisitions, expense transfers, and financial reports. The Grants Administrator will review all expenditures charged to sponsored projects to determine the allowable costs within sponsor guidelines, as well as to verify that sufficient funds are available and that the budget line is maintained within 25% of the proposed amount. If expenditures exceed the 25% threshold, a Budget Revision is required. However, it is the responsibility of the PI to ensure that purchases are allowable within grant guidelines.

Cost Transfers

Cost transfers are occasionally needed to correct errors in original charges. When requesting a cost transfer through the Grants Administrator, written documentation, signed by the PI, must be provided that includes the reason for the transfer, the account originally charged, as well as the purchase order or check requisition number. All cost transfers that take place more than 90 days after the original charge must be supported by written justification for the lateness of the transfer, as well as the documentation discussed above.

Time and effort reporting is a process mandated by the federal government to verify that direct labor charges to federally sponsored agreements are reasonable and reflect actual work performed.

Office of Management and Budget (OMB) Circular A-21 includes regulatory requirements for the reporting and certification of faculty and staff effort associated with research projects and other activities. Additionally, many other sponsors require records to substantiate effort. Therefore, Babson College policy requires effort certification for all externally sponsored programs.

To meet the A-21 requirements for reporting faculty and staff effort, Babson College will adhere to the following procedures. Salaries and wages of faculty and staff will be distributed to activities based on estimates of the individual’s planned effort. The employee’s effort distribution must be adjusted for any significant changes in actual effort (10% or more of the individual’s total workload) and the actual effort of the employee must then be certified on an after-the-fact basis.

The report will encompass both sponsored and all other activities. An individual’s workload will reflect categories of activities expressed as a percentage distribution. Three times a year, a statement will be signed by the employee, principal investigator, or responsible individual with direct knowledge of the work performed, stating that the salaries charged to research as direct charges, and to other categories (including instruction/Divisional research and administration), are reasonable and accurate.

During the life of a federally funded grant award, it may become necessary to modify certain aspects of the original award.

Some Federal sponsoring agencies, under what is frequently termed the “expanded authorities,” have delegated approval rights to the awardee for some of these modifications. The PI may request internal approval from the Controller for any of the following:

• Pre-Award Costs – Pre-award costs incurred within the ninety (90) calendar day period immediately preceding the effective date of the award. Pre-award costs must be necessary for the effective conduct of the project and must be in accordance with the budget as proposed. Pre-award expenditures are made at the awardee’s risk. Awardee authority to approve pre-award costs does not impose an obligation on the sponsor.
• Extension of Award Expiration Date – To initiate a one-time extension of the award expiration date of up to 12 months, funding agency must be notified at least ten days prior to original termination date. This extension may not be exercised merely for the purpose of using any unobligated balance. Extensions past the initial 12 months require prior-approval from the funding agency (funding agency must be notified at least 45 days prior to original termination date).
• Revision of Budget – The budget plan is the financial expression of the project or program as approved during the award process. During the performance of a project, it may be appropriate for funds to be reallocated to support advancement of the project. NSF and OMB -110 authorize the transfer of funds among various budget categories for allowable expenditures without prior approval. Principal Investigators are required to remain within 25% of the proposed budget categories. When expenditures for a particular budget category are going to exceed the 25% threshold, a Budget Revision Form should be submitted with a justification that supports the advancement of the project.

Prior Approval Requirements

Awardees are required to report deviations from budget and program plans, and request prior approvals for the following changes:

1. Change in the scope or the objective of the project.
2. Change in PI or Co-PI.
3. The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the principal investigator.
4. The need for additional Federal funding.
5. The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the Federal awarding agency.
6. The transfer of funds allotted for participant support (direct payment to trainees) to other categories of expense.
7. Unless described in the application and funded in the approved awards, the subaward, transfer or contracting out of any work under an award. This provision does not apply to the purchase of supplies, material, equipment or general support services.

No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.

The Principal Investigator is responsible for submitting progress reports to the sponsor within the specified time frame and format indicated by the sponsor in the award document.

Assistance from Corporate and Foundation Relations may be requested. Copies of all reports should be sent to Corporate and Foundation Relations. Close-out of federal grants should be conducted with the assistance of the Grants Administrator to ensure all required documents have been completed.