Award Management FAQs

Question: Where can payroll charges attributed to backpay issues (e.g., raise factors, reclassifications, promotions) be applied?

Answer: Typically, the charges for backpay dues to issues such as raise factors, reclassifications, and promotions, would be applied directly to the payroll source where the individual was payrolled during the periods to which the backpay issue relates. In regard to extramurally funded projects, situations may occur where the funding source to which the backpay issue relates, is no longer available (i.e., award closed). In such a case, costs would need to be applied to an unrestricted funding source.

If a project is closed, but there is a successor award, you may be able to apply the backpay charges to the successor award. As long as the individual for which the backpay is tied, was paid on the predecessor award, such can be applied to the successor award. If the individual for which the backpay is tied was jointly funded on several awards, the backpay must be allocated to the successor at the same payroll distribution level as the person was appointed to the predecessor award. If the individual is no longer paid/appointed on the project, it would still be allowable per University policy. However, be very certain to clearly document in your files information regarding the individual’s prior appointment/association with the project.

Please be aware of the following state and federal regulations regarding cell phones/cellular service charges and read on to find out how to request an exceptional purchase request.

UW-Madison/State of Wisconsin policies and procedures

Information regarding campus and state policies regarding cell phones and related service charges can be found here. In general, the university discourages assigning university-funded cellular service to individual employees. However, the policy also addresses options regarding when phones/services may be appropriate/allowable. Individuals should refer to the full campus policy for additional information, including details regarding the State of Wisconsin mandatory contract for the purchase of cellular service/phones.

Personal use is unallowable, except for essential personal calls of minimal duration and frequency. The policy referenced above includes information regarding oversight, monitoring and requirements regarding reimbursement of costs for excessive personal use.

Allowability on sponsored projects

Any sponsored project (federal or non-federal, grant or gift) is subject to UW-Madison policy and State of Wisconsin regulations regarding application of costs to the project. Cellular phones are considered an equipment purchase, and like any equipment purchase, must be used specifically for the particular project the cost is charged to.

Application of cell phones and service charges to a sponsored project are allowable if use is dedicated to the project. Per uniform guidance, communication costs related specifically to a project are allowable.

J.9 states:

Costs incurred for telephone services, local and long distance telephone calls, telegrams, postage, messenger, electronic or computer transmittal services and the like are allowable when the costs can be documented and allocable to the project to which costs are applied.

If the cell phone and related charges are for general purpose use and cannot be determined as allocable to the project, then the cost is unallowable on a sponsored project and should be applied to an unrestricted funding source or treated as an F&A (indirect, overhead) cost per uniform guidance:

Items such as office supplies, postage, local telephone costs, and memberships shall normally be treated as F&A costs. “General purpose equipment” means equipment, which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles.

Cellular phones and services are not specifically named in the circular, but are considered in the same category as telephone and related communication costs and services.

Exceptional circumstances: requests for cellular phones and service charges on sponsored projects

Although generally unallowable, it may be possible to assess cellular phones and service charges to a sponsored project. Permission can be requested as an “exceptional circumstance.” The need for cellular phones and related services should be recognized and included in the budget justification at project proposal stage, detailing the specific nature of the situation.

An “exceptional circumstance” should be requested and approved prior to submission of the proposal to the sponsor. Documentation showing the dedicated nature and exceptional need of a cellular purchase must accompany any cellular purchase, and prior approval is required. If the request is not detailed in the proposal stage and approved as an exception at the time of application, an exception request is required prior to purchasing the phone/service and applying charges to the project.

Fixed price accounts are established when a contract or agreement carries with it terms that provide a fixed or firm price in exchange for a specific scope of work or designated service. Under a fixed price contract or agreement, it is expected that the scope of work will be met by the PI for the fixed price amount defined in the contract or agreement. If labor costs exceed the fixed price, such become the responsibility of the PI – the contact or agreement indicates that the work will be performed for the stated fixed price.

Similarly, if labor costs do not fully expend the funds designed in the fixed price contract or agreement, the funds remaining are then available to the PI for future related work. Note that in the latter case, remaining funds are released for future related work only upon confirmation that the work on the project has been fully completed, deliverables have been provided, the sponsor/agency has acknowledged acceptance, and payment in full has been received.

Some fixed price contracts or agreements do include clauses allowing for adjustment of pricing throughout the contract/agreement period.

When submitting a proposal under a fixed price option, it is expected that the PI will develop a reasonable and logical detailed budget. Once funded, it is expected that all costs directly associated with performing the work will be charged directly against the fixed price contract/agreement. It is critical for the PI to ensure that proper expenses and effort be charged to these projects.

With proper proposal development and accurate application of expenditure, it should be unusual for funds to remain at the end of a project, and even more unusual for such remaining funds to be significant. If unspent funds remain, a PI should clearly be able to explain why the project cost less than projected.

Fixed price contracts/agreements are established with designated begin and end dates. When an end date has been reached and full payment has been received from the sponsor/agency, documentation should be retained on file detailing that the project is completed, all deliverables have been provided, and the sponsor/agency has acknowledged acceptance. Any documentation the PI has in this regard is to be provided to SMPH Research Division and to RSP.

Once the project is confirmed as completed and paid, the project can be considered for closeout and PIs may request that funds remaining be transferred to a residual balance account. Use the transfer of residual balance from a fixed-price project tool available on RSP’s website. Please forward the PDF form this tool generates to your SMPH accountant for review and approval.

Note: If the amount remaining is minimal in regard to the full project amount (i.e., less than 25 percent of the full project amount), the remaining funds may be transferred to a residual balance account without question. However, if the amount remaining is excessive (i.e., more than 25% of the full project amount), an explanation needs to be included with the transfer request indicating what has occurred that caused a sizable/excessive balance to remain on the project.

Per uniform guidance, communication costs related specifically to a project is allowable.

Costs incurred for telephone services, local and long distance telephone calls, telegrams, postage, messenger, electronic or computer transmittal services and the like are allowable.

Phone call and the other services mentioned must be specific to a project and benefit the research of the particular project. Telephone calls specific to a project and that can be documented are allowable on a grant. Examples of such would be phone charges specific to survey work, tele-conference charges for collaborators discussing research, local and long-distance charges which can be documented as specific to a project.

All other types of local telephone and yearly line rental cost are unallowable and should be treated as and indirect cost (overhead, F&A), per uniform guidance.

Items such as office supplies, postage, local telephone costs, and memberships shall normally be treated as F&A costs.

“General purpose equipment” means equipment, which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles.

There are some exceptions to the yearly line rental, but these are very specific and require documentation showing the dedicated nature of the line costs (e.g., a line dedicated for a survey, a “Center” grant to which dedicated lines are required for “Center” operations). In these cases prior approval is needed.

An exception for these types of costs should be clearly recognized and requested for in the project proposal stage, detailing the specific nature of the situation. If not detailed in the proposal stage and approved as an exception at the time of application, then an exception request would be required prior to applying such costs at time of award.

The follow information can be found in uniform guidance.

Necessary:

Is the item needed to conduct and accomplish the research as described in the scope of the award?

To be necessary, the cost applied must be absolutely essential to achieve a certain result or results. Cost applied to the project MUST be necessary to accomplish the scope of work.

Example of necessary: Yogurt to provide to study participant in order to check of sugar levels in blood.

Example of not necessary: Yogurt to provide at lab meetings as an afternoon snack.

Reasonable:

What is considered a reasonable cost? Would you personally pay the cost for the item(s) being purchased? “Would a prudent person pay the amount?”

Costs which are generally recognized as ordinary and necessary and would be incurred by a prudent person in the conduct of normal business can be considered reasonable.

The cost is not excessive or extreme.

Example of not reasonable: Renting a limo to drive to meeting. Cost is excessive for one person thus not reasonable.

Example of reasonable: Renting a limo for a group to drive to meeting. Cost effective and reasonable only if price breakdown is less than each individual paying separate cab fare.

Allocable:

How much gets charged to a project?

Costs which are incurred specifically for the award. The cost incurred for the advancement of work on the project. Cost must be necessary. Applications of cost (aka splitting costs) should be in proportions that can be approximated through reasonable methods.

Unallowable allocation example: Cost of ionized water supply split between two federal projects solely based on the remaining balance of one project.

Allowable allocation example: Cost of ionized water supply split three ways equally between three projects since each project benefits from the usage equally.

Consistently treated:

Like costs must be treated the same in like circumstances … consistently. Cost may be treated as direct cost only or as F&A (facility and administration, also known as overhead, indirect) cost only. If an item is deemed an F&A cost by the UW and then applied as well as a direct cost we are in essences billing twice for the same cost.

Example: Membership and subscription cost are treated as an F&A cost at the UW-Madison. This is one of the main reasons why it is not an allowable cost on sponsored projects.

Example: Computer costs are typically considered an F&A cost, which is why many purchases are deemed unallowable by a federal sponsor.

Permissible:

It must be legal to purchase the item under the law. Cost also must be permissible under the terms and conditions of the award.

Example: Flying first class is OK with a sponsor, but per UW and state guidelines only flying coach is permitted.

Example: Purchasing from a vendor listed on the State of Wisconsin Ineligible Vendor List is not permitted.

Allowable:

Allowability of cost is defined specifically in uniform guidance, Subchapter F.

A cost could be considered allowable even if uniform guidance states it is unallowable. This makes the item an exception. An exceptional item thus needs to be necessary, reasonable, allocable, consistently treated and permissible.

Can the cost assessed from a private vendor (e.g., HireRight) to perform criminal background checks be applied to sponsored projects (e.g., grants, contracts, agreements)?

Yes, IF … the individual hired is fully funded on the sponsored project and dedicated to the project for at least one full year. If an individual resigns within the one year period, or their funding changes within the one year period, cost assessed for the criminal background check would need to be removed from the sponsored project to an unrestricted fund.

Note: If the individual hired is fully funded across multiple sponsored projects and dedicated to those multiple projects at the same effort levels for at least one year, the cost would then be shared financially between the multiple projects at the effort distribution levels.

This interpretation would be consistent with cost principles applied to costs such as visas and recruitment costs on sponsored projects, allowable under uniform guidance, and under state purchasing guidelines.

Example 1:

A scientist is recruited for Dr. Jones’ NIH research award 144-ABCD.

Three individuals are ranked as possible hires.

Individual 1 — a criminal background check is performed; an offer is made; the offer is declined.

The cost associated with individual 1 may not be assessed to Dr. Jones’ 144-ABCD award.

Individual 2 — a criminal background check is performed; an offer is made; the offer is accepted.

The cost associated with individual 2 may be assessed to Dr. Jones’ 144-ABCD award.

Example 2:

A scientist is recruited for a shared position, 50 percent on Dr. Jones’ NIH research award 144-ABCD and 50 percent on Dr. Smith’s NSF research award.

The cost for a criminal background check on the individual hired may be assessed 50/50 to the two awards.

Per uniform guidance, Subtitle VII, C-17, entertainment costs cannot be assessed to federally sponsored projects.

“Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable. ”

What is entertainment?

Events such as picnics, tailgate events and lab parties are considered entertainment and are not allowed on sponsored projects. Costs for a group or individual to perform at such events are also unallowable. Taking students and visitors out for a meal with no meeting or research purpose is also considered entertainment and thus would be an unallowable cost.

During travel status it is also unallowable to claim charges for movies, ballgames, musicals, plays, etc. These events are considered to be on personal time (even if during travel status) and should not be claimed as a travel expense either as a direct expense or under the per diem cost.

Uniform guidance, Subtitle VI, C-32

Costs of external meetings and conferences, the primary purpose is the dissemination of technical information beyond the recipient entity, are allowable. This includes costs of meals, transportation, rental of facilities, speakers’ fees, and other items incidental to such meetings or conferences, and the identification of locally available dependent-care resources unless further restricted by Federal awarding agency policy. Federal awarding agencies may authorize exceptions where appropriate for programs including federally recognized Indian tribes, children and the elderly. See also C-17 Entertainment Costs, C-35 Participant Support Costs, C-53 Travel Costs, and C-54 Trustees.

Costs to host and attend (including travel) meetings and conferences are allowable costs as long as the costs are allocable to the sponsored project that will be assessed the cost. The key phrase is, the primary purpose of which is the dissemination of technical information. Travel to attend such conferences should not be placed on a sponsor project solely because conference travel is allowable. The conference needs to relate to the research goals and to the scope of the sponsored project.

Even though the costs are allowable per uniform guidance, there may be agency specific regulations that do not allow such costs without prior approval. For example, many sponsored agreements do not allow out-of-state travel. If a research meeting is being held out of state, then prior approval is needed from the sponsoring agency approving assessment of costs to the sponsored project for meeting attendance.

Requests for approvals of this type should be discussed with your SMPH accountant. As always, the terms of agreement should be reviewed for specifics and approvals should be verified before assessing any cost.

UW-Madison also has a policy regarding meeting and conference expenses.

Per uniform guidance, C-39, proposal cost cannot be assessed to federal grants.

Proposal costs are the costs of preparing bids or proposals on potential federally and non- federally funded sponsored agreements or projects, including the development of data necessary to support the institution’s bids or proposals. Proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as F&A costs and allocated currently to all activities of the institution, and no proposal costs of past accounting periods will be allocable to the current period.

However, the institution’s established practices may be to treat proposal costs by some other recognized method. Regardless of the method used, the results obtained may be accepted only if found to be reasonable and equitable.

Proposal cost such as writing, reviewing, copying and mailing a proposal cannot not be assessed to a sponsored project. Per UG, proposal costs should be treated as an indirect cost (also referred to as F&A – facilities and administration – or overhead). All costs associated during the proposal stage should be charged to unrestricted funding. It is up to the department/center to define a business practice of whether the cost should be the responsibility of the PI or the department/center.

If a proposal is successful and is awarded, no past proposal cost can then transferred to the new award. Even though the costs were associated with the award they are not deemed research related.

If you have identified an error in salary charges and are planning on submitting a salary cost transfer, read on to find out how the transfer will be reviewed and processed, and what you can do to streamline the process.

The process:

Salary cost transfers (SCT’s) are usually requested by the department financial specialist, department administrator, or principal investigator. The SCT workflow tool and instructions are available on the Accounting Services website.

Streamlining your SCT request:

The effort aspect of the transfer often creates hangups or delays. Make sure to communicate with the effort coordinator in your department to ensure that certified effort matches the SCT.

For example, if SCT is requesting to move 50 percent of an individual’s salary to 144-AB12, the ECRT card must reflect that 50 percent of the person’s effort was spent on that award. Further explanation can be added in the notes box in ECRT if the line items are not adequate.

If you are planning to initiate an SCT on a sponsored project and have questions about preparing your transfer, writing the justification, or reviewing or certifying effort, please contact your finance department or effort coordinator.

SHIP (Student Health Insurance Plan) is a comprehensive insurance plan for UW-Madison students.

SHIP insurance costs are allowable on unrestricted funding.

SHIP insurance costs typically cannot be applied to sponsored projects. Insurance costs generally are a component of fringe benefits. Fringe benefits are provided to individuals in accordance with institutional policies based on appointments held by the individual.

Salaries/wages and fringe benefits for individuals working on the project are indeed allowable. The issue in regard to SHIP insurance costs becomes one of established institutional policies and costing principles (e.g., allocability, consistent treatment, permissibility). In general, SHIP insurance would not be allowable. Occasionally, exceptional circumstances may exist.

To evaluate issues involving SHIP insurance, the typical questions which need to be addressed for each individual include:

1. Student name
2. Visa type
3. Is the individual a student, visiting scholar, or other (please designate)
4. Who initiated the visa application — UW-Madison or other entity
5. If initiated by UW-Madison, what was indicated on the visa in regard to how SHIP insurance costs would be covered
6. What is the individual’s role on this project; will the individual be involved in other projects or dedicated to this project?
7. What type of appointment will the individual hold? What did the individual’s letter of offer indicate in regard to appointment, support, etc.?
8. If a stipend is being provided, under what funding and on what basis?

Note: If SHIP costs intend to be assessed to a sponsored project, it is critical that approval is granted before the student’s arrival and be documented within his or her visa application.

It should again be noted that typically, SHIP insurance costs are not allowable on sponsored projects. However, in those cases where such might be allowable, the exceptional circumstance approval should be in place in advance of arrival/appointment.

Requests for consideration as exceptional circumstances on sponsored projects should be prepared for each individual addressing all of the questions outlined above.

Per uniform guidance C-52: Transportation costs such as shipping costs are allowable on sponsored projects (e.g., grants) when the cost directly relates to the research.

C-52 specifically states:

Costs incurred for freight, express, cartage, postage, and other transportation services relating either to goods purchased, in process, or delivered, are allowable. When such costs can readily be identified with the items involved, they may be charged directly as transportation costs or added to the cost of such items. Where identification with the materials received cannot readily be made, inbound transportation cost may be charged to the appropriate F&A cost accounts if the institution follows a consistent, equitable procedure in this respect. Outbound freight, if reimbursable under the terms of the sponsored agreement, should be treated as a direct cost.

What does this mean? Is the item being shipped an allowable cost on a sponsored project? Here are some examples:

1. The cost of shipping soil samples would be allowable but that the shipment needs to be clearly identified.
2. The cost to ship results to a collaborator to be analyzed would be allowable.
3. The cost to send out a proposal would not be allowable.
4. General purpose shipments and correspondence costs would not be allowable and should be treated as indirect costs.

The shipper (e.g., department, center, lab, PI) needs to be able to document what has been shipped and briefly explain why it is being shipped. Current UPS CampusShip and FedEx invoices do not provide enough detail. This means it is up to the shipper to provide further documentation. Does your process clearly describe what was shipped?

Due to an increase in proposals being submitted outside the proper channels, please review the policies regarding submission of proposals/applications to extramural agencies/sponsors.

All proposals/applications must be routed for college and campus review and approval prior to submission. WISPER (Wisconsin Proposal Electronic Routing system) is used to facilitate routing. Approvals are required from PI, chair/designee, college and RSP before proposals/applications may be submitted.

Even if an agency/sponsor does not require institutional approval or a detailed budget, any proposal/application is viewed as an institutional commitment. Only the Board of Regents of the University of Wisconsin System and its designates have signature authority for proposals, agreements, contracts, etc.

When a PI submits a proposal/application to a sponsor or agency without institutional approval, it is submitted outside of the scope of their employment and can be considered misrepresentation, possibly invalidating the proposal/application.

In order to avoid putting SMPH PIs in a position where an award cannot be accepted, please be sure to appropriately route the following for college and campus review and approval prior to submission:

• Letters of intent and preproposals
• Full proposals
• Proposal revisions, renewals, continuations, supplements
• Subcontracting proposals and extramural support actions
• Agreements
• Contracts

Please work with SMPH Research Division on all proposals/applications to facilitate submissions and expedite award execution.

The cost to bind or copy theses is typically not allowable on federally sponsored projects. Many theses copies are made as personal copies for advisors, committee members, the graduate student and their family members. These copies are thus unallowable and should not be charge to a sponsored project.

Many departments also require graduate students to provide a bound copy for a departmental library. Library costs are considered costs that should be covered by F&A, thus the copy for the department should be paid by unrestricted funding or departmental funds. Many departments already pay for the required copy. Currently the Memorial Library and Graduate School only require electronic versions and there is no cost to submit.

It is possible that one copy could be charged to a sponsored project. To be considered allowable, the cost must be necessary to perform the project, it must be allocable, the cost must be reasonable, and allowable under the award terms. It needs to be used solely for the one project. If the thesis is going to be used as a research tool over time on other projects then the cost should be charged to unrestricted funding.

If the criteria (as noted above) are met, then an exceptional purchase request should be sent to the SMPH Research Division for approval. This can be sent to dmeltzer@wisc.edu. Written justification should be kept in the award file and with the purchase documentation.

Note: Steenbock Library offers to act as a pickup and drop point for your department to send thesis binding to the UW Madison binding vendor. The binding must be ordered directly by a UW Madison department on its own account. For bindery contact information and pickup schedule call Steenbock Library Binding, (608) 263-2047. Please contact Steenbock prior to bringing items to be bound.

The campuswide rate for tuition remission is $12,000 per year for all project assistant (PA) and research assistant (RA) appointments.

Under the policy, questions often arise regarding how tuition remission is allocated in situations where an RA or PA is appointed on more than one project, or how tuition remission is affected when a salary transfer is processed.

As a general rule, tuition remission is allocated in proportion to a student’s appointment on a project.

The facts:

Tuition remission for a semester is $6,000 (half of $12,000 because there are two semesters per year). Tuition remission is not charged for summer sessions. (You may notice tuition remission charges appearing on a project during the summer months if a salary transfer or appointment change is processed, but in general question any tuition remission charges during the summer months.)

Each semester is 4½ months, so tuition remission breaks down to $1,333.33 for each full month and $666.66 for the half month.

The allocation of tuition remission is cumulative across the semester, even though a set amount is being charged monthly. Because of this, it’s possible to transfer one month of salary to another project, yet see the tuition remission charge for that month reduced by more or less than the charge that originally posted. The amount of tuition remission that moves depends on other aspects of the student’s appointment (e.g., how many other projects are they payrolled on and at what appointment percent).

Tuition remission is tied to salary. It cannot be transferred by itself unless it is unallowable on a project. If salary is being transferred, tuition remission is also transferred.

The math:

To calculate the tuition remission, you first need to know the student’s total salary for the semester. For fall semester this will be the total salary paid for September through the first half of January, and for spring semester it will be the total salary for the second half of January through May.

Next, determine how much of the total salary for the semester will be paid on each project to which the student is appointed.

Then, for each project, divide the student’s salary on that project by the total semester salary. This amount (convert to) is the percentage of tuition remission that should be applied to a particular project. To figure the dollar amount take the percentage multiplied by $6,000.

Example:

Jane Smith was payrolled on projects B and C for the spring semester. Jane’s total semester salary was $6,930. She was paid $3,465 on each project, which is 50 percent of her total semester pay, so tuition remission was charged to each project at 50 percent of $6,000, or $3,000 per project. The department wants to move $400 of her March salary off project B to departmental 101-4 funds. To calculate the tuition remission that should be allocated to projects B and C after the transfer is processed:

Total salary = 6,930
Project B salary = 3,465 – 400 = 3,065
Project C salary = 3,465

% of salary on Project B = (3,065/6,930) = .4423 = 44.23%
% of salary on Project C = (3,465/6,930) = .5 = 50%
% of salary on 101-4 = (400/6930) = .0577 = 5.77%

Tuition remission on Project B = 44.23% (6,000) = $2,653.80
Tuition remission on Project C = 50% (6,000) = $3,000
Tuition remission on 101-4 = 5.77% (6,000) = $346.20

The above numbers reflect how tuition remission should be charged based on salary for the semester. Since Project B was already charged $3,000, tuition remission on this project will be reduced by $346.20 when the salary transfer is processed.

WISDM has a great tuition remission search tool that provides a clear detail of salary and tuition remission charges by student, project, and semester. To access the tool, go to Main Menu>Appointments>Tuition Remission Search.