UL Lafayette: ORSP: Policies, Procedures, Forms & Tools: PI Guide: Part IV

Office of Research and Sponsored Programs

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Guide to Sponsored Program Management for Principal Investigators

ORSP Main > Policies, Procedures, Forms & Tools > PI Guide > Part IV

Part I · Part II · Part III · Part IV · Part V · Part VI · Appendix A

IV. “ I’m A Researcher, Not An Accountant—So Why Does This Matter?” - A Quick Guide to Budget Management

As the Principal Investigator, you are charged with the responsibility of managing the budget for your project. The answer to why you as PI must be a budget manager is simple—because you know more than anyone about your project and the resources you are using to conduct it. All grant expenses will be posted to the university’s accounting system. Business Services will provide you with monthly budget reports that reflect all the accounted spending activity on your project.

You can contact Melanie Comeaux in Business Services at 2-6145 with any questions about your account, including current account balances or specific charges.

A. Knowing If The Proposal is Funded

Once a proposal has been approved for funding by the sponsoring agency, the agency will send a notification award letter to the university, either directly to you as the PI or to the Office of Research and Sponsored Programs. Other related documentation may accompany the award notification, including an award acceptance letter or contract, which need to be approved and signed by the appropriate institutional representatives before activity on the project can begin. The Office of Research and Sponsored Programs will notify you when it learns that the project has been approved and funded, or if a decision has been made not to fund it. Please send ORSP any award, contract, notification, rejection, or any other official correspondence you receive directly from the funding agency.

B. Setting Up A Project Account

Business Services will set up a restricted account (prefix “R” or “G”) for your funded grant so you can spend grant money. Funds in this account are restricted solely for items in the budget of your funded project.

You do not need to request a restricted account. Once the university receives a fully executed contract or award letter, Business Services will automatically establish a new restricted account and assign the budget line items in the account according to the budget stipulated in the award.

If you feel you need to make limited grant-related expenditures before a fully executed contract has been received, you should contact Carl Frantz, ORSP Director.

C. Monitoring a Project Budget

You will receive two monthly financial reports (called the Income and Expense Ledgers) reflecting the activity posted to your project account that include: 1) a detailed and a summary income and expense statement for the month, and 2) an overall summary of the budget, expenses, and balance from the beginning of the current project year. This year to date summary is designed to be easily understood and will tell you what percentage of your budget you have spent to date on the various categories.

You should pay close attention to these monthly reports. It is important to verify that all expenses are accurately recorded, and that an expense has not been inappropriately charged to your account or to the wrong line item in your budget. [You can correct any errors by using the Cost Transfer Form that can be found in Appendix B.] Many PIs find it helpful to set up their own expense tracking spreadsheets that can then be compared against the monthly expense reports.

As PI, you are responsible for ensuring that grant spending is within the guidelines of the approved budget for the grant, that only allowable purchases are made, and that adequate funds will be available throughout the lifetime of the grant to perform all the activities stipulated in the project. Some agencies, like NSF and NIH, provide general grant management guidelines through their websites, while some other funding agencies provide hard copy guidelines to PIs once their projects have been funded. If you need help determining whether a purchase/expense is allowed under your grant, contact ORSP.

D. Making Purchases

Use a Purchase Requisition Form to purchase supplies or equipment, and when contracting with a private firm for services. Special Note: In the case where you wish to contract with a private firm, you should send the Purchasing Office a Purchase Requisition describing with whom you would like to contract, for what price, and what deliverables the contractor must deliver by when. When the Purchasing Office receives the Purchase Requisition from you, it will send you a draft contract for review and completion. (More information about specific types of contracts is provided later in this manual.)

Use the Direct Charge Form to request prepayment for non-equipment or non-supply items, such as books or journal subscriptions.

Purchase Requisitions and Direct Charge Forms are available in departmental and administrative offices. Samples of these forms can be found in Appendix B.

To process a Purchase Requisition or a Direct Charge Form:

Determine the availability of funds by examining the budget line items on the expenditure records provided by Business Services.
Purchases paid by University funds to meet its cost-share obligations must be noted on the Purchase Requisition or Direct Charge forms. Enter the word “cost-share” and the R account number for the grant in the purpose section of the Purchase Requisition form or in the Description section of the Direct Charge form.
Submit the Purchase Requisition or Direct Charge to your department head or director. Following the appropriate institutional review and approval the document will be sent to Business Services for processing.

E. Requesting Travel and Travel Reimbursements

Official travel must be approved in advance. You must submit travel requests paid by or through your grant using the Travel Request Form that should be available in departmental and administrative offices. The completed form should be submitted to your department head (or other supervisor). Once your department head and dean sign the form, Business Services will process the form and they will send you a fully approved copy. You must include this copy with your Request for Travel Reimbursement. For insurance purposes, a Travel Request is required for any grant related travel even if no project or university funds will be used. The official state travel policy must be followed for all travel. It is available on the Web at www.state.la.us/osp/travel.

You should be particularly aware of certain obligations under University travel policies:

Use the state approved travel agency when making travel arrangements.
Apply early to Business Services for University Corporate credit card for use when making travel arrangements. The state approved travel agency will only accept University issued credit cards.
Allow extra time for approval of international travel requests.
Secure special approval in advance of travel when a rental car is required or anticipated expenses exceed levels that the state travel policy would normally allow.
Note if the travel expenses are intended to meet University cost-share obligations by entering the word “cost-share” and the R account number for the grant in the purpose section of the Request for Travel Reimbursement.

Also note that federal law requires that an American flag carrier be used when flying internationally using federal funds. This is true even when the airfare is more expensive than that of a foreign carrier. Please tell the travel agent that you need to fly on an American flag carrier when making your federally funded international travel arrangements. If an American flag carrier is not available to your destination(s), or if use of an American flag carrier would result in significant delays or layovers, then contact Wayne Theriot in Business Services (2-6256) to see if an exception to the policy may be made.

If you intend to pay travel expenses from your grant for non-university personnel, they do not have to use the state travel agency, but are otherwise subject to the state travel policy (e.g. per diem for meals, and lodging, approval for car rentals). Travel expenses for non-University personnel should be submitted by invoice. These invoices should be submitted with a completed Direct Charge Form.

You can find a sample Travel Request Form, Request for Travel Reimbursement and Direct Charge Form in Appendix B.

F. Transferring Costs

A cost transfer is a transfer of an expense transaction from one account to another. You may request a cost transfer to and from most grants, including all federal grants for any of the following reasons:

to correct clerical errors (for example, if an item is accidentally charged to the incorrect grant);
to reallocate salary expenses to reflect actual effort expended as posted in effort reports; or
to reflect internal direct charges made to the grant in those cases when the university’s accounting system does not charge the appropriate amount when it is first posted (these direct charges must also be allowed by the grant’s approved budget).

Cost transfers must be related to the sponsored grant/contract being charged or credited, and cannot be used to move deficits from one sponsored grant/contract to another, to cover cost overruns, or to “use up” unspent sponsored grant funds.

Funding agencies and auditors view frequent cost transfers, especially transfers made close to ending dates of awards, as evidence of budget management or accounting problems. Therefore, you should use cost transfers infrequently, and only for the purposes noted above. In order to comply with federal regulations, you must fully document and justify cost transfers.

To request a cost transfer, you should use the Cost Transfer Form. For the transfer to be considered, you must fill out the form completely, including a detailed explanation of the reason for the cost transfer and your original signature.

Cost transfers to externally funded restricted accounts must be requested no more than 90 days after the original charge, and at least 60 days before the end of the grant.

Cost transfers from externally funded restricted accounts to correct errors or to reflect actual effort reporting have no specific time limit; however, the request must be made as soon as the need for the transfer is discovered.

All requests for cost transfers must be approved. ORSP will review for approval all cost transfers requested within 30 days of the original charge. The Vice President for Research and Graduate Studies must additionally approve all cost transfers requested more than 30 days after the original charge.

Any cost transfers to externally funded accounts that you request beyond the 90-day deadline will be considered only under highly unusual circumstances. To be considered, you must also include a written justification of the lateness of the request.

You can find a sample Cost Transfer Form in Appendix B.

G. Monitoring Cost Sharing

Once a project including cost share or match is funded, UL Lafayette is legally bound to share the expense of the project as agreed in the grant or contract. This commitment applies even if the cost share was voluntary or is not itemized in the project’s budget.

If cost sharing has been committed, Melanie Comeaux in Business Services working with ORSP can help you with monitoring the cost-shared expenses on your project. Completion of effort reports are mandatory, since those are used to document and verify that the portion of time that you and other personnel had committed to the project is actually spent on the project.

Travel Expenses. If travel expenses are committed as a cost-share obligation, be certain to indicate such in the purpose section of the Request for Travel Reimbursement form for UL Lafayette employees or the Direct Charge form for non-University personnel.
Purchases. You must note if purchases of supplies and equipment are intended to meet University cost-share obligations. On the Purchase Requisition or Direct Charge forms, enter the word “cost-share” and the R account number for the grant in the purpose section.
Graduate Assistant Stipends. You must indicate if Graduate Assistant stipends paid by University funds are intended to meet cost-share obligations. On the Restricted Compensation Graduate Assistants Form, enter the University account being charged for the stipend as well as the word “cost-share” and the R account number in the monthly stipend column.
Graduate Assistant Tuition and Fees. You must indicate if tuition and fees paid by University funds are intended to meet cost-share obligations. On the Restricted Account Graduate Assistants Form, you must note the University account being charged for the tuition and must enter the word “cost-share” and the R account number for the grant in the tuition paid for column.
Undergraduate Students. If undergraduate student labor is committed as a cost-share obligation, you must submit a letter to the ORSP stating the university account paying for the student, the student’s name, Social Security number and the number of hours per week that he/she will be working on the project. You should be aware that students being paid through the federal work-study program cannot be used as cost share on federally funded grants.

Document last revised Monday, August 18, 2008 2:34 PM