Project Management

Period of Performance/Budget Period:  The total estimated time interval between the start of an initial award and the planned end date, which may include one or more funded portions, or budget periods.  Though some projects may span multiple years, the sponsor terms and conditions determine whether the period of performance and budget period is the same or are broken down into smaller segments.  At the University of Kentucky, the Period of Performance is defined by the Project From/To Date, while the budget period is defined by the Budget From/To Date.

Sponsored Project expenses should be incurred within the budget period of each award.  That means services should be performed in full, travel should occur, equipment and supplies should be utilized, and faculty and staff should complete the scope of work within the budget period. 

Below are examples of situations that may arise throughout the life of the project that may require allocation of expenses or sponsor approval due to budget period limitations.  Consult with your College Grants Officer regarding options should the following or similar situations arise:

• Service contracts required for the scope of work that crosses the budget period of the award.
• Delivery of purchased items are delayed and received later than expected and could impact the ability to fully utilize within the budget period.
• Equipment needed to complete the scope of work is no longer functioning towards the end of the budget period and budget is available for purchase of replacement equipment or maintenance.
• Travel period crosses the budget period of the award.
• Travel costs need to be posted prior to the budget period of the account.

Please note, expenses should be incurred based on requirements of the award.  Expenses incurred on other sources of funding should not be utilized, then supplies replenished at the end of the award when budget is available.  If supplies are needed towards the end of the award, volumes purchased should be adjusted accordingly or allocated to ensure items purchased will be utilized to perform the scope of work within the budget period.

Further information required to determine allowability of expenses on a sponsored project can be found in Uniform Guidance under  §200.403 Factors affecting allowability of costs and residual supply inventory information under  §200.314 Supplies.

How will this effect my sponsored project accounts?*

When an individual works on one or multiple awards, their salary is allocated based on a general percentage that represents a reasonable amount of time in relation to the work performed to each project. CDEM (Cost Distribution Entry Module) is a tool to track and capture the general percentage an individual should charge a cost object and fund over the expected period of work, also known as the cost distribution plan.

CDEM provides the ability to compare the commitment (proposed salary expense) versus actual salary expense throughout the life of the cost object and assess whether a cost object is being charged as intended. A commitment entry must be created for every cost object and fund before it can be used in a cost distribution plan. A commitment in CDEM should be not confused with a commitment (encumbered) expense in SAP. CDEM commitments are not exported into other institutional reporting systems such as BW Reporting.  CDEM also provides a way to specify a period to prorate a distribution percentage when the period of work begins or ends in the middle of a payroll period.

CDEM replaced both manual entry into SAP for monthly IT0027 screens and the FES system for faculty cost distributions.  FES “tracks and versions” are no longer needed as cost distribution plans feed directly to SAP from CDEM.  Bi-weekly payroll cost distribution plans will be added to CDEM during FY22.

AVC check is the available control (AVC) that checks consumption (actual plus encumbrances) against budget to prevent overcharging. CDEM compares the In-progress plan with the Active plan distributions.

AVC check must pass or pass with credit.

• Requires Check – AVC check needs to be performed before workflow can be initiated

*Any sponsored project account that was active as of March 1, 2021 will need to be checked in GMAVCOVRW and with your Ledger to make sure the salary is budgeted and charging appropriately.  Repeated budget revision requests to keep up with the payroll posting issue(s) will not be allowed.  The account must be monitored according to University BPM policy E-17-6.  If an account has ended and reaches the close out phase but has a salary sponsored class with a zero budget and over expenditures that have posted, the costs will be moved to the Dean’s Indirect Overrun cost object.

More info can be found here:  https://www.uky.edu/ufs/cdem

Compensation offered as an incentive to offset any costs due to participation of human subjects is covered by the Office of Treasurer under BMP E-9-1. Important definitions, outlines of PI and Business Staff responsibilities, compensation procedures, and policies on amounts can be found in BMP E-9-1.

• Compensation of Cash or Non-Cash items of $100 or less
• Compensation of Cash or Non-Cash items of $101 to $500
• Calendar payment exceeding $600
• Incentive Awards and Prizes; drawing
• Exception to Documentation Requirements - Certificates of Confidentiality

The recipient shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and shall not encumber the property without approval of the Federal awarding agency. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities, in the following order of priority: (i) Activities sponsored by the Federal awarding agency which funded the original project, then (ii) activities sponsored by other Federal awarding agencies.

During the time that equipment is used on the project or program for which it was acquired, the recipient shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal awarding agency that financed the equipment; second preference shall be given to projects or programs sponsored by other Federal awarding agencies

The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment.

Additional information regarding Equipment Guidelines can be found in the UK Business Procedures Manual. 

The E-Verify clause will be included on the following federal contracts and subcontracts:

• Contracts with a performance longer than 120 days and a value above the simplified acquisition threshold of $250,000
• Subcontracts for services or for construction with a value over $3,000
• Indefinite-delivery/indefinite-quantity contracts. 

The following individuals will need to be screened through E-Verify:

• Current employees who will perform work on the contract must be screened 30 days from the date the individual is placed on the contract
• New employees hired to work on the contract must be screened within 3 days of their hire date.

Exceptions, instructions, and more information is available on UK HR E-Verify Process.  

Office of Management and Budget Uniform Guidance 2 CFR Part 200 establishes the principles for determining costs applicable to grants, contracts and other agreements with educational institutions. The principles are designed to provide that the federal government bear its fair share of the total cost, determined in accordance with generally accepted accounting principles, except where restricted or prohibited by law. The basic considerations for determining the allowability of costs are:

1. Costs must be reasonable. This is defined as the action a prudent person would have taken under the circumstances.
2. Costs must be allocable to sponsored agreements under the principles and methods described in 2 CFR Part 200. Any costs allocable to a particular sponsored agreement may not be shifted to other sponsored agreements to clear an overdraft or for any other reasons of convenience.
3. Costs must be given consistent treatment through the application of generally accepted accounting principles appropriate to the circumstances.
4. Costs must conform to any limitations or exclusions set forth in these principles or in the sponsored agreement as to types or amounts of cost items. 

UK's "Costing Guidelines for Sponsored Projects" establishes the processes that UK uses to meet the requirements of OMB 2 CFR Part 200. The Costing Guidelines provide additional detail on allowable and unallowable costs and exceptions that exist based on UK's implementation of the requirements. The Costing Guidelines also provide detail on acceptable accounting practices. 

Explicitly Unallowable Costs on Federal Agreements

Federal regulations identify specific categories of costs that cannot be charged, directly or indirectly, to federally sponsored agreements. 

The following list covers costs specifically designated as unallowable in OMB 2 CFR Part 200. This is a quick reference. 

• Advertising & Public Relations Costs
  • Purchase of promotional items. Production and distribution of magazines, newsletters, radio and TV programs, direct mail, exhibits, unless directly related to the performance of a sponsored project. 
  • Expenses for employee and subject recruitment are allowable
• Alcoholic Beverages
• Alumni Activities
  • Costs incurred for, or in support of, alumni activities and similar services are unallowable.
• Bad Debts
  • Any losses, whether actual or estimated, arising form uncollectible accounts and other claims, related collections costs, and related legal costs, are unallowable.
• Commencement and Convocation Costs
  • All costs related to commencement and convocation are unallowable.
• Contingency Provisions
  • Contributions to a contingency reserve or any similar provision made for events, the occurrence of which cannot be foretold with certainty as to time, intensity, or with an assurance of their happening, are unallowable.
• Directly Associated Unallowable Costs
  • Costs that are directly associated with the unallowable costs are also unallowable. A directly associated cost is defined in federal regulations as any cost which is generated solely as a result of the incidence of another cost, and which would not have been incurred had the other cost not been incurred.
  • An example of a cost that is directly associated with an unallowable cost is the cost of airfare to go to another city for the purpose of entertaining business associates, or for fundraising. Since entertainment and fundraising costs are expressly unallowable under 2 CFR Part 200, and the airfare would not have been incurred had the unallowable costs not been incurred, the airfare is an unallowable directly associated cost.
• Entertainment
  • 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.
• Fines and Penalties
  • Costs resulting from violations of, or failure of the institution to comply with, Federal, State, and local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the sponsored agreement, or instructions in writing from the authorized official of the sponsoring agency authorizing in advance such payments.
• Fund raising
  • Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions, are unallowable.
• Goods or Services for Personal Use
  • Costs of goods or services for personal use of the institution's employees are unallowable regardless of whether the cost is reported as taxable income to the employees.
• Lobbying
  • Attempts to influence the outcomes of any Federal, State, or local election, referendum, initiative, legislation, or similar procedure, through in kind or cash contributions, endorsements, publicity, or similar activity.
• Losses on Other Sponsored Agreements or Contracts
  • Also known as Cost Overruns
  • Any excess of costs over income under any other sponsored agreement or contract of any nature is unallowable. This includes, but is not limited to, the institution's contributed portion by reason of cost-sharing agreements or any under-recoveries through negotiation of flat amounts for F&A costs.
• Medical Liability Insurance
  • Only allowable on research programs to the extent that the research involves human subjects.
• Memberships
  • Membership in any civic or community organization or country club or social or dining club or organization are unallowable. As is membership in business, technical, and professional organizations.
• Pre-Agreement Costs
  • ​​​​​​​Costs incurred prior to the effective date of the sponsored project, whether or not they would have been allowable thereunder if incurred after such date, are unallowable unless specifically set forth and identified in the sponsored agreement, or approved through prior approval procedures.​​​​​​​​​​​​​​
• Selling and Marketing
  • ​​​​​​​Costs of selling and marketing any products or services of the institution are unallowable.
• Student Activity Costs
  • ​​​​​​​Costs incurred for intramural activities, student publications, student clubs, and other student activities, are unallowable, unless specifically provided for in the sponsored agreements.

Meals can be charged to a sponsored project, provided the sponsor does not explicitly prohibit such costs, if the following conditions are met:

1. The meeting includes a majority of outside/external participants, AND
2. The meal is served at a formal meeting being conducted in a business atmosphere where the provision of the meal serves to maintain the continuity of the meeting, AND
3. The activity at which the meal is being served is significant and integral to the goals of the project

Documentation that supports meals as an allowable charge in an audit must include:

• Meeting invitation that describes meeting purpose
• Meeting agenda
• Attendee roster
• Description of the activity associated with the meal in the proposal narrative and/or budget justification

Business meals may not be charged as project costs when individuals decide to go to breakfast, lunch, or dinner together when no need exists for continuity of a meeting. Such activity is considered to be an entertainment cost. 

NIH Grants Policy Statement: Part III: Terms and Conditions for Specific Types of Grants, Grantees, and Activities - Allowability of Costs/Activities

When certain meals are an integral and necessary part of a conference (i.e., a working meal where business is transacted), grant funds may be used for such meals, as qualified under "Travel". Where meals and/or lodgings are furnished without charge or at a nominal cost (e.g., as part of the registration fee), the proposed per diem or subsistence allowance must take this into consideration.

GPS 9505 15. Consumer/Provider Board Participation: When not specifically authorized by program regulations, only the following costs are allowable with the prior approval of the PHS awarding office: a. Reasonable and actual out-of-pocket costs incurred solely as a result of attending a scheduled meeting, including transportation, meals, babysitting fees, and lost wages. b. The reasonable costs of necessary meals furnished by the grantees to consumer or provider board participants during scheduled board meetings only if not reimbursed to participants as per diem or otherwise. 

NSF Grant Proposal Guide (GPG), Budget - Proposal Section, Meals and Coffee Breaks. No NSF funds may be spent on meals or coffee breaks for intramural meetings of an organization or any of its components, including, but not limited to, laboratories, departments, and centers.

USDA Terms and Conditions: Meals may not be charged as project costs when individuals decide to go to breakfast, lunch, or dinner together when no need exists for continuity of a meeting. Such activity is considered to be an entertainment cost. In contrast, it is NIFA policy that a formal group meeting being conducted in a business atmosphere may charge meals to the project if such activity maintains the continuity of the meeting and to do otherwise will impose arduous conditions on the meeting participants. Please note this requires ADO approval prior to incurring such cost. 

NIH Childcare Reimbursement

Full-time NIH-funded trainees (appointed on T32, TL1, TU2, or T90 grants) and fellows (on F30, F31, F32 and F33 grants) are eligible to receive reimbursement for childcare costs up to $2,500 per budget period. NOA for the current budget period will confirm if such funding has been provided for your grant. Reimbursement is NOT available for students/postdocs employed on other types of NIH grants (e.g., R01).

The requirements for obtaining these funds through the related grant are slightly different between fellows (on F30, F31, F32, and F33 grants) and for trainees (appointed on T32, TL1, TU2, or T90 grants) but the reimbursement process to receive up to $2,500 to cover eligible childcare costs per budget period is the same. A summary of how this process works, plus links to other resources, are available here:

Childcare Summary

Childcare Reimbursement Request

Childcare Reimbursement Process

NRSA Fellow Childcare Attestation Form

NRSA Trainee Childcare Attestation Form

Participant Support Costs

Participant support costs (PSC) are defined by the Uniform Guidance in §200.75:

Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

A participant is the recipient, not the provider, of a service or training opportunity as part of a workshop, conference, seminar, symposium or other short-term instructional or information sharing activity funded by a sponsored award. Participants may be, but are not limited to, students, scholars, scientists from other institutions, or teachers. Participant support is funding provided to help defray the costs to participants or trainees (but not employees) of participating in a conference or training activity.

See the solicitation and/or award document for award specific PSC requirements.

Management of Participant Support Costs

Participant support costs are budgeted in a separate category in the application budget and must be accounted for separately. Participant support costs are excluded from the MTDC base when calculating F&A costs.

Once awarded, OSPA establishes a separate scope account under the prime award to isolate participant support costs and to ensure that F&A is not applied against these costs.  All expenses must be consistent with University policies for payments, travel, fees, and other costs.  Consult with your College Grant Officer (CGO) on how to pay the stipend.   The sponsored class will depend on whether or not the individual is a non-student or student and, if a student, whether or not s/he is attending UK.

Rebudgeting Participant Support Costs

Rebudgeting funds from the non-participant project into the participant support project may or may not require sponsor approval, depending on the applicable award terms. However, funds provided for participant support costs cannot be rebudgeted for use in non-participant projects and some participant categories unless prior written approval has been obtained from the sponsor.  If a project has unexpended participant support funds that the PI/department would like to repurpose, the PI/department should work with their OSPA contact to process a prior approval request with the sponsor.  Such rebudgeting should be done as soon as possible during the life of the award.

NSF Participant Support PAPPG Requirements- (Line F on the Proposal Budget)

This budget category refers to direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with NSF-sponsored conferences or training projects. Any additional categories of participant support costs other than those described in 2 CFR §200.1 (such as incentives, gifts, souvenirs, t-shirts, and memorabilia), must be justified in the budget justification, and such costs will be closely scrutinized by NSF. (See also Chapter II.F.7.) Speakers and trainers generally are not considered participants and should not be included in this section of the budget. However, if the primary purpose of the individual’s attendance at the conference is learning and receiving training as a participant, then the costs may be included under participant support. If the primary purpose is to speak or assist with management of the conference, then such costs should be budgeted in appropriate categories other than participant support.

For some educational projects conducted at local school districts, the participants being trained are employees. In such cases, the costs must be classified as participant support if payment is made through a stipend or training allowance method. The school district must have an accounting mechanism in place (i.e., sub-account code) to differentiate between regular salary and stipend payments. 

To help defray the costs of participating in a conference or training activity, funds may be proposed for payment of stipends, per diem or subsistence allowances, based on the type and duration of the activity.  Such allowances must be reasonable, in conformance with the policy of the proposing organization and limited to the days of attendance at the conference plus the actual travel time required to reach the conference location. Where meals or lodgings are furnished without charge or at a nominal cost (e.g., as part of the registration fee), the per diem or subsistence allowance should be correspondingly reduced. Although local participants may participate in conference meals and coffee breaks, funds may not be proposed to pay per diem or similar expenses for local participants in the conference. Costs related to an NSF-sponsored conference (e.g., venue rental fees, catering costs, supplies, etc.) that will be secured through a service agreement/contract should be budgeted on line G.6., “Other Direct Costs” to ensure appropriate allocation of indirect costs.

This section of the budget also may not be used for incentive payments to research subjects. Human subject payments should be included on line G.6. of the NSF budget under “Other Direct Costs,” and any applicable indirect costs should be calculated on the payments in accordance with the organization’s Federally negotiated indirect cost rate.

Funds may be requested for the travel costs of participants. If so, the restrictions regarding class of accommodations and use of U.S.-Flag air carriers are applicable.17 In training activities that involve off-site field work, costs of transportation of participants are allowable. The number of participants to be supported must be entered in the parentheses on the proposal budget. Participant support costs must be specified, itemized, and justified in the budget justification section of the proposal. Indirect costs (F&A) are not usually allowed on costs budgeted as participant support unless the recipient’s current, Federally approved indirect cost rate agreement provides for allocation of F&A to participant support costs. Participant support costs must be accounted for separately should an award be made. 

The Payment Request Document (PRD) must be used for categories identified in the Business Procedures Manual (B-3-2-2) when approved sources will not accept UK Procurement Cards, or when the transaction is not authorized on the procurement card. See the guidelines above for full details on using PRDs. 

Procurement Cards (ProCards) may be used to pay for small dollar acquisitions, to provide an alternative for cash funds, and for travel advances. They may also provide optimal procurement and payment solutions for other suitable projects that have a define purpose, timeframe and budget. See the Business Procedures Manual (E-7-16) for full details on Procurement Card use. 

Journal Vouchers (JVs) A full explanation of Journal Vouchers, including when and how to use them, is available through the Business Procedures Manual, section E-4.

To attract the most qualified faculty and staff, the University of Kentucky will reimburse certain expenses incurred during the recruitment process. For full details on the Recruitment Expenses Policy, see the Business Procedures Manual (E-7-9) and Uniform Guidance, Recruiting costs (§ 200.463).

Where relocation costs incurred incident to recruitment of a new employee have been funded in whole or in part to a Federal award, and the newly hired employee resigns for reasons within the employee's control within 12 months after hire, the non-Federal entity will be required to refund or credit the Federal share of such relocation costs to the Federal Government. See also § 200.464.

What is included in the routine review?

• Review expense documentation 
• Ensure documentation is sufficient to support expense
• Match documentation to expenses posted in SAP
• Ensure expense was processed and posted (product/service invoices received and paid)
• Review labor distribution reports for reasonableness with time spent on the project
• Review encumbered/open items to determine if action is needed to resolve (i.e. travel, subawards, JVs, POs, procards, etc)
• Review available budget

Why is a routine review needed?

• The University requires at least a monthly review of ledgers.  See resources below.
• The review demonstrates financial oversight of the funds and is the primary method for detecting errors, omissions and fraud.
• This timeframe also allows for all corrections to be identified and processed timely.

For additional detailed information, see the following resources:

BPM E‐1‐3 Fiscal Roles and Responsibilities 
https://www.uky.edu/ufs/sites/www.uky.edu.ufs/files/bpm/E-1-3.pdf

BPM E‐17‐6 Reconciliation and Review of Financial Transactions https://www.uky.edu/ufs/sites/www.uky.edu.ufs/files/bpm/E-17-6.pdf

RFS Presentations:  https://www.uky.edu/ufs/sponsored-projects-bits-pieces-presentations

Hand in Hand Reconciliation Procedures http://www.uky.edu/ufs/sites/www.uky.edu.ufs/files/Reconciliation%20procedures.pdf

A cost transfer is any transfer of an expense involving a sponsored project via a Journal Voucher.  While every effort should be made to charge all direct costs to the appropriate sponsored project when the expense was initially incurred, cost transfers are sometimes necessary. If a journal voucher or payroll retroactive adjustment has been submitted, it must comply with federal regulations, the sponsor’s terms and conditions, and University policies.

As examples, a transfer may sometimes be necessary to:

• Correct bookkeeping or clerical errors in original charges;
• Properly allocate costs to the appropriate accounts using a verifiable and reasonable method in accordance with the cost principles; or
• Transfer charges between accounts supporting closely related work for reasons other than covering over expenditures.

Full guidelines on cost transfers is available in the Business Procedures Manual, E-50-3.

• Replacement Account Request Process

All charges to a grant project, particularly in the final months of the project period, must be allowable and allocable as a direct cost to the grant, and be reasonable and necessary for the conduct of grant activities. Equipment may not be purchased simply to use an unobligated balance remaining at the end of the project. If the equipment is for a preponderance of use on the project, then ample time is required to purchase the item, use it and be able to report the results in the final report. 

If equipment is purchased during the last 6 months of a project, additional justification will be required from the PI:

• Confirmation whether or not the PI will be requesting an extension.
  • If the project is continuing, no heightened scrutiny will be needed for purchases made late in the current budget period.
• Receipt date of the equipment or expected receipt date of equipment.
  • Note: if the equipment is ordered, but not received by the end of the budget period, it will not be an allowable expense. 
• What equipment the PI was using before the equipment purchase or a programmatic reason as to why the equipment was not necessary until now.

The Research Administrator is responsible for reviewing guidelines and confirming whether or not sponsor approval is required for equipment purchases.

Equipment Grants: Due to the purpose of equipment grants, time of expenditures incurred at the end of the project are not scrutinized like they are on other grants.