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1. Responsible Conduct of Research

The Starting Point

Society has a vested interest in the research carried out at the University of Rochester - not only in the outcomes of that research, but also in the methods used and manner in which the work is conducted and supported. Much goes into the research enterprise at universities like UR, and much is expected in return. One reason for public interest stems from simple cost/benefit analysis. At UR in 2003-2004, over 2,400 projects were funded by external sponsors with a total combined budget of over $333 M.

The public is well served by this investment. Not only have critical discoveries emerged from this work, but so have generations of leadership in all fields of human endeavor.
 
Unlike the popular image of an "ivory tower," academic research is conducted in a social context, and human values enter into the process at many levels. To maintain confidence and trust in this enterprise, researchers must aggressively protect the empirical objectivity of research, the unbiased reporting of results, and the open sharing of that information for the good of society.
 
Issues that can impinge on public trust and confidence in research are brought together under the heading of "research integrity," and include such topics as:
  • environmental health & safety
  • use and protection of human subjects and lab animals
  • conflicts of interest
  • publication, intellectual property and data
  • error, negligence or misconduct
  • response to violations of ethical standards.
 
 
 
2. Environmental Health and Safety

University Environmental Health and Safety

Environmental Health & Safety's mission is to provide safety and advisory services to the University Community through:

  • Managing risk
  • Assessing and evaluating the environment
  • Advocating safe work practices
  • Providing quality educational programs
  • Ensuring compliance with University and regulatory standards

This commitment to providing a safe environment creates particular requirements for PIs in research laboratories. In the research environment, the PI is in a critical position to understand the operation and equipment involved, the materials and methods used, and, therefore, the potential risks associated with the work being done. Importantly, the PI's attitude toward health and safety will contribute significantly to the education of students regarding the conduct of research.

Labs at the University house biohazards, chemicals, equipment and other materials that can pose hazards to health. The proper management of these hazards is not only good lab management; it is also a regulatory requirement.

General guidelines for Principal Investigators and Supervisors are available through the EH&S Web site. Other specific policies related to biosafety, lasers, chemical hazards, emergency procedures, etc. are also available at this site. Particular attention should be paid to new federal regulations affecting UR research and clinical labs that pertain to "select agents". This more stringent set of regulations was enacted given intensified concern over bioterrorism, and the University has enacted its own Select Agent Program in response to the legislation. Additional safety related information not limited just to laboratories is found throughout the rest of the EH&S Web pages.

Training is fundamental to safety. The EH&S staff provides training on a wide variety of topics. All individuals conducting laboratory benchwork are required to attend Laboratory Safety Training (OSHA required training).

Vigilance in the lab also requires ongoing communication and the prompt reporting of problems. Staff is encouraged to contact EH&S with any safety concerns. Please refer to the department's directory of personnel to direct your concern to the proper person or contact the office at ext. 5-3241.

In addition to general safety requirements, there are two particular research areas that require special reviews and approvals. If your research involves either:

  • Recombinant DNA molecules, infectious or biohazardous agents, OR
  • Radioactive isotopes, or ionizing, ultraviolet laser and/or microwave radiation

your project protocol MUST BE REVIEWED AND APPROVED IN ADVANCE BY AN ADMINISTRATIVE PANEL. Faculty working with biohazardous agents and/or recombinant DNA molecules should be familiar with the Institutional Biosafety Committee (IBC). Those working with radiation should contact the Radiation Safety Officer, P. Andrew Karam for additional information.
 
3. Protection of Research Subjects


RSRB, WIRB and UCAR

Research involving either human subjects of laboratory animals is regulated by Government agencies and by UR policy. UR extends regulatory requirements in this regard to ANY research activity, regardless of the source of funding for the activity.
HUMAN SUBJECTS IN RESEARCH
The University of Rochester, by action of the President and Board of Trustees, has established a system of institutional review boards to review research. These boards, each with the title of Research Subjects Review Board (RSRB), are supported by a staff office (RSRBO). In addition to the four RSRBs that the University operates on-site, The University also uses one contract board (Western Institutional Review Board [WIRB]) to review certain industry supported research. The RSRBO is located within the Office of the Senior Vice President for Health Affairs. The boards review all human subject research that is conducted or supported by the UR to determine that the rights and welfare of the volunteers are adequately protected.

According to federal regulations, 'human subject' means a living individual about whom an investigator (whether professional or student) conducting research obtains (1) data through intervention or interaction with the individual, or (2) identifiable private information.

Application forms and general guidance, including the University's Consent Form Guidance are available on-line. Applications and other communications may be mailed to the RSRBO at Box 315 or delivered to the first floor of the Medical Center (1-6124). [(716/585) 275-2398]

The University's review boards are guided by the ethical principles described in the 'Belmont Report' and by the regulations of the U.S. Food and Drug Administration (21 CFR 50 and 56) and the U.S. Department of Health and Human Services (45 CFR 46). The University of Rochester maintains an Assurance of Compliance with the Office for Human Research Protection (OHRP).

Consistent with the University's policy to apply ethical standards to all studies, regardless of funding source, persons involved with human subjects research are required to take a training program and pass an examination before acting a an investigator, co-investigator, sub-investigator or study coordinator. Also, any other person obtaining research consent from human subjects must successfully complete the training.

There are two training programs, which are based upon the risk level of the studies conducted.

1. The Ethical Principles in Research Program (EPRP) was designed for studies that are low risk ('exempt studies') or that pose no greater than minimal risk. The program consists of an examination based on the definition of human subject research above, and the ethical principles for research outlined in the Belmont Report.

2. The Human Subjects Protection Program (HSPP) is for greater than minimal risk studies. This is a self-study program consisting of a manual and an examination. The manual was developed by UR faculty and staff and reviewed by an external (national) advisory committee. The advisory committee included government regulators, renowned clinical researchers (biomedical and behavioral) and bioethicists.
LABORATORY ANIMALS
The UR has one Institutional Animal Care and Use Committee (University Committee on Animal Resources [UCAR]) charged with reviewing all research protocols involving laboratory animals. No research involving the use of vertebrate animals can proceed without the approval of this Committee.
Faculty should meet with the Chair of UCAR or a representative as soon as they decide to use animals in research.

All faculty, staff, and students must attend the Animal Resource Orientation. This orientation is offered twice a month, and you may not work with animals until you are certified by attending this session and passing a quiz.
 
 
4. Conflict of Interest

Disclosure and Management

Conflicts of interest can be defined as SITUATIONS in which a divergence between personal and professional interests might be perceived, such that an individual's professional actions might be viewed to be influenced by considerations of personal gain. Conflicts of interest can erode SCIENTIFIC OBJECTIVITY.

In the modern research university, it is impossible to avoid conflicts of interest. The goal of UR's policies in this regard is not, therefore, to eliminate all conflicts but rather to manage them. The key to UR's conflict of interest process is DISCLOSURE.
ALL UR "investigators" are required to submit to their Chair or Director an annual financial disclosure in accordance with the Faculty Policy on Conflict of Committment and Interest). Investigator is defined as the PI, Co-PI, or any other person who is responsible for the administration, design, conduct or reporting of sponsored research. In addition, as circumstances may arise during the year, any UR personnel may be required to complete an ad hoc disclosure.
Conflicts of commitment, on the other hand, are situations in which the individual's time and energy are unreasonably diverted away from his or her primary professional allegiance, i.e., away from University responsibilities. Conflicts of commitment are managed in part through limits on the amount of time that a faculty member may consult (see the UR's policy on consulting). Consulting and outside activities can create real benefits for the faculty member and for the institutions involved; they can also create conflicts of commitment, and can precipitate conflicts of interest. In addition to policies governing faculty, UR has related policies for staff.

It is often difficult to identify a potential conflict of interest. As noted, disclosure and communication is the key. You can analyze hypothetical circumstances in which potential conflicts may present themselves. The scenario linked here was developed by the National Academy of Sciences for this purpose.
 
In addition to UR requirements, two of UR's largest sponsors - the National Science Foundation (NSF) and the National Institutes of Health (NIH) - have their own requirements for PI disclosures whenever a proposal is submitted to either agency. Special attention is focused on conflicts of interest in BIOMEDICAL research, particularly in the relationships between faculty and pharmaceutical companies in the conduct of clinical trials.

Any issues related to conflict of interest should be discussed with your Chair or School Dean. The University's Conflict of Interest Committee is an advisory body that can assist both faculty and academic leaders recommending appropriate steps to help to manage and mitigate conflict. The offices of the ORPA and of OTT are also available to provide advice and assist in the preparation of conflict management plans.
 
 
 
5. Publication, Data and Intellectual Property

UR's Open Academic Environment

UR considers an open academic environment, the unrestricted freedom to publish and access to research projects by all university faculty and students, to be of crucial importance. While this principle was originally articulated in the context of the prohibition on classified research on campus, it takes on new resonance at the start of the 21st century, where publication and sharing can conflict with patentability.
PI's should be alert to language in proposals, award notices, or other project documents that would limit the UR's basic academic freedoms. Any concerns about restrictions on openness or publishability should be resolved before an award is accepted.

Publication in peer-reviewed journals is at the heart of the academic research enterprise. Considerations around the sharing of information, and the ability to replicate research results, are discussed in the excerpt from "On Being a Scientist" linked in the box on the right.


As the UR has achieved a notable reputation for technology transfer, one outcome has been increased interest in patentability and licensing of intellectual property developed at the University. This has brought new attention to issues of openness and publishability. Another outcome has been the growth of UR start-up companies based on UR technology. This has brought new attention to the management of any real or perceived conflict of interest of the PI or the institution.

As a recipient of federal research funding, UR must report invention disclosures and promote technology transfer for the good of society. Specific provisions, including royalty-sharing, can be found in UR's Policy on Intellectual Property and Technology Transfer.
Finally, after the research project is complete, regulations stipulate the length of time that scientific records and data must be retained. In general, data must be kept for THREE YEARS following the closure of a project (this applies to both scientific and financial records). Special circumstances may require longer retention periods. Lab notebooks are crucial project records, for example, in support of a patent application.
 
 
 
 
6. Scientific Integrity

Misconduct and Reporting
Research is a human enterprise. Scientists are susceptible to human error and may certainly engage in differences of opinion about interpretations or judgments of data. Researchers also work under difficult constraints, such that publication pressures, limited resources and other contingencies can push against the desire to maximize quality.

Responsible research conduct includes maintaining high quality standards, while acknowledging mistakes. Research integrity rests on the judgment and conscience of the researcher.

Beyond human error or negligence, there are also errors that involve deliberate deception. Scientific misconduct is defined as "fabrication, falsification, plagiarism, or other practices that seriously deviate from those commonly accepted within the scientific community for proposing, conducting, or reporting research."
UR, along with the agencies that fund research conducted here, have explicit policy requirements related to allegations, investigations and reporting of scientific misconduct.

At the heart of discussion on these topics is concern about ethical responsibilities and reporting requirements. Integrity and conscience demand not only personal adherence to ethical standards, but reporting of suspected violations of those standards. Responsibilities in this regard are codified in two separate policies at UR, i.e, in the policy on Scientific Misconduct and in the Medical Center's Code of Conduct.
Violations should be reported in confidence through normal organizational channels. In the case of scientific misconduct, reports should be made to the Dean of the appropriate school.

Where reporting with a School structure is difficult, perceived violations of laws, regulations or grant/contract terms may be reported to the Director of University Audit, Medical Center Compliance Office or the General Counsel. Reports may be made confidentially, or even anonymously. Any report (whether from the Medical Center or River Campus) may also be made on the Strong Health Integrity Line at 756-8888. Reporting such concerns in good faith is a service to the University and to the larger academic community, and will not jeopardize anyone's employment.
 
 
7. PI Responsibilities in the University Sign-Off Process

Routing, Approval and Certification
Even prior to submitting a proposal for sponsored funding, the PI has defined responsibilities during the University "sign-off" process. While the sign-off (i.e., routing) process may be viewed as cumbersome, especially during that 11th hour when a deadline looms, it is a critical and necessary step. It is during this process that the University and PI are assured that:
  • The proposal is in line with the University's mission and objectives;
  • Appropriate personnel and facilities are available to carry out the project;
  • All reasonable and allowable costs have been included, and the proposal adheres to sponsor proposal guidelines;
  • All policy and compliance issues have been addressed.
The Proposal Sign-Off Form is the University's internal review form that authorizes proposal submission. Specific signatures on this form signify that the proposal has been reviewed for certain considerations, such as obligations of space and/or personnel. Sign-off requirements vary with each School/College; consult the ORPA Guide on Submission of Sponsored Project Proposals at http://www.rochester.edu/ORPA/OGUIDES/ or the relevant Dean's Office.
Regardless of the School/College requirements, the PI's responsibilities during the sign-off process remain constant. It goes without saying that the PI maintains the responsibility for preparing the scientific proposal and budget, and obtaining the required and appropriate approvals as dictated by department, School and University policy. What is often not recognized is the responsibility of assuring and certifying to various conditions on the Sign-Off Form. Some of the certifications on the Sign-Off Form are required by law; falsely certifying may invoke civil or criminal penalties. The Sign-Off Form can be accessed at http://www.rochester.edu/ORPA/Forms/
Of particular note:
  • Conflict of Interest: All investigators (key individuals responsible for the administration, design, conduct and reporting) are required to make an annual disclosure to their supervisors of outside remunerative and other activities related to their teaching, research and administrative responsibilities. When submitting NIH or NSF proposals, this disclosure is required when a significant financial interest related to that proposal exist. It is a federal requirement that such disclosures are submitted in advance of proposal submission to these agencies. This form can be found at http://www.rochester.edu/ORPA/Forms/
  • Debarment and Suspension: This regulation requires that applicants for federal funds certify that neither they nor their researchers are debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from covered transactions (e.g., grants and contracts) by any federal agency.
Other certifications on the Sign-Off Form pertain to procurement integrity and lobbying. A full description of the meaning and significance of these certifications can be found in the ORPA Manual at http://www.rochester.edu/ORPA/manual/ Falsely certifying may invoke action against the PI and key personnel not only by the involved federal agency, but by the University. PI's are to take sign-off requirements seriously.
 
 
8. Financial Management/Audit Realities

Audit Survival Guide

The topics discussed in the earlier pages of this site deal with issues around the general topic of responsible research conduct. These topics touch on different elements of the regulatory environment dealing with the conduct of research and the relationship between the researcher and society.

The remainder of this presentation deals with another aspect of the regulatory environment - that dealing with the management of project funding. Just as with the conduct of research, there are externally-imposed requirements on the individual researcher and on the institution related to the management of research funds. The remaining sections of this tutorial focus on obligations to sponsors to maintain fiscal accountability and comply with regulations.
The objectives of good research management are twofold:
  1. to make best use of available funds to achieve research outcomes
  2. to avoid problems of fraud, waste and abuse of sponsor support
Increasingly, requirements related to the use of federal funds create serious exposure for the University of Rochester and its individual PIs. One purpose of this presentation is to minimize that risk.

Audit focus today is on the direct costs of research, including the thousands of individual transactions in which PIs authorize the expenditure of sponsor funds for salaries, supplies and other costs of research. Recent audits have highlighted particular areas where regulations and compliance are complex and sometimes difficult. The following pages of this web site review these issues.
 
 
 
 
 
 
9. The Cost Principles: OMB Circular A-21

Fiscal Fundamentals

Anyone authorizing the expenditure of federal funds needs to understand the cost principles contained in Circular A-21, published by the Federal Office of Management and Budget (OMB). These principles govern costs that may be charged to the government by educational institutions either directly or indirectly.


The University of Rochester has implemented policies and issued guidelines on proper charging of costs, including the Implementation of Revisions to OMB Circular A-21 (December 27, 1993) that prohibits the direct charging of administrative costs to Federal awards. Generally, these same cost principles are applied to non-federal funding as well, although in some cases non-federal sponsors define allowable/unallowable costs differently than federal sponsors.
Any cost being charged to a sponsor must satisfy the following criteria:
  1. The cost must be ALLOWABLE as defined by Circular A-21 and/or by the terms of your particular award (discussed further on the next page of this site).
  2. The cost must be ALLOCABLE, that is, the project which paid the expense must benefit from it.
  3. The expense must be REASONABLE, that is, the cost reflects what a "prudent person" might pay.
If costs are not allowable, allocable and reasonable, then they may NOT be charged to a sponsored project.

In addition, A-21 requires that costs be handled consistently across the University. This means, for example, that particular types of expenses may not be charged directly in one School or Department, and charged as an indirect cost somewhere else. The University of Rochester's policies and practices regarding the consistent treatment of costs have been established to meet the compliance standards set forth in OMB Circular A-21 and the Cost Accounting Standards (CAS) applicable to educational institutions. It is the responsibility of principal investigators, department heads and administrators to understand and comply with this guidance in order to prevent cost disallowances by the federal government. Consistent treatment of costs is necessary to meet the ultimate objective of CAS 502 which is to prevent overcharging the federal government and double counting.

The ultimate key to consistency is the application of University of Rochester policy. As long as you know and apply University policies, you do not need to be an expert on A-21 or CAS. The University of Rochester employs experts to assure that policy guidance reflects regulatory requirements.
 
 
 
 
10. Award Terms & Conditions

Establishing the Groundrules

In FY 2001, the University of Rochester received funding from over 400 different sponsors, including federal agencies, foundations and for-profit companies. Each of these has the right to establish its own terms and conditions for its awards. In addition, each individual award may include specific terms applicable to that award.

The terms of an individual award take precedence over the provisions of A-21. For example, although travel is not defined as unallowable in A-21, your particular award may designate travel, or more likely foreign travel, as unallowable. In that case, you may not charge those expenses to that project. Similar types of provisions may pertain to the acquisition of equipment.
Where required by the terms of the award, you MUST have the written approval of the sponsor's Grant or Contract Officer before charging specified expenses.

Note that all terms and conditions specified in an award "flow down" to any recipients of subawards. Awards may also contain requirements for advance notification of certain conditions.

For federal grants, OMB Circular A-110 requires prior approvals of changes in PI status (including reduction of effort by 25% or more) or significant changes in scope of work.

A 1999 situation involving a PI at another academic institution illustrates the seriousness with which Federal agencies view these requirements. In that situation, a PI had failed to report a significant change is his personal situation, requiring his absence from the project. An individual in his lab reported this situation to the sponsor. (The PI had been charging 50% of his effort and salary to the project.) As a result of the "whistle blower" provisions of the Federal False Claims Act, damages were tripled and the resulting settlement cost the institution involved $920,000.

Cost-type contracts (vs. grants) have other requirements.
Required notifications must be in writing to the Contract Officer.

Finally, award notices specify requirements for reports. PIs who fail to submit timely technical or progress reports, for example, risk losing their own funding, and jeopardize the funding of other U of R PIs. Recently, University of Rochester has seen an increasing number of sponsors, both federal AND non-federal, exercising their right to suspend funding in these situations.
 
 
11. Administrative Salaries and Other Clerical Expenses

Major Projects or Significant Effort
The September 1, 1994 revision of Circular A-21 established the principle that administrative and clerical expenses are normally considered indirect costs. However, there are now two instances when administrative and clerical costs may be charged directly to Federal funds received either directly from the Federal Government or indirectly as a subrecipient under another entity's federal agreement; one, where the project is defined as a major project or activity; or, two, where the employee is providing a substantive contribution to the research project (defined below as significant research effort ).

Major Project or Activity

A project which is multi-purpose and multi-investigator or interdisciplinary, and requires a core administrative budget to ensure the project's operation and effectiveness. Examples of such major projects and activities include center grants or contracts ("P" series grants for PHS), cooperative agreements made for the purpose of running large programs (such as the LLE core agreement with DOE) and other major awards with an agency-approved administrative support portion (such as the DOD University Research Initiative or the NSF Science and Technology Center), projects in remote locations where departmental administrative support is not possible, conference grants, and similar activities. Where these projects are established with a master administrative account and several subaccounts, administrative and clerical salaries should be charged to the core administrative account.

Refer to OMB Circular A-21, Exhibit C for further examples of major projects. The key to this definition and these examples is the concept of "administrative intensity" beyond routine levels. If the technical nature of the work to be done includes components that are "administratively intensive", then A-21 allows the definition of the project as "major". The direct charging of those allocable administrative costs which make the project "major" is then appropriate. A project may be "major" regardless of its size or the amount of its funding.


Significant Research Effort

Salaries of administrative and clerical personnel may be directly charged to a federal agreement if it can be demonstrated that the person is performing a research service to the agreement. Administrative and clerical activities involving data collection (such as surveys), statistical analysis, literature searches, or similar efforts are examples of such extraordinary services. Routine account monitoring, meeting arrangements, or typing of general correspondence or project reports are not research services as used herein.



In either case (major project or significant research effort), the following criteria must be met for the charge to be allowable as a direct cost:
  1. the salaries are requested as part of the original project budget ( and are not specifically disallowed in the resultant award), or are subsequently explicitly approved by the funding agency;
  2. sufficient justification is made in the project budget to show other than routine administrative or clerical support to the project.
Note that this "major project" or "significant research effort" requirement applies to federal sponsors only. With respect to non-federal sponsors, administrative and clerical expenses that are allowable, allocable and reasonable may be charged without demonstrating the existence of a "major project" or "significant research effort".
 
 
 
 
12. Effort and Salaries

Proposing and Tracking Committed Effort
The commitment of effort made in proposals is the starting point for a significant amount of project cost. At the UR, approximately 60% of the direct cost expenditures for sponsored awards are for salaries and benefits. Commitment of effort also has significant implications for cost sharing. The following principles apply in this regard:
  • UR salary is allocated on the basis of a distribution of TOTAL effort (FTE, or Full-Time Equivalent), including teaching, research activities, administrative responsibilities, etc. Total effort is NOT based on a specified number of hours (e.g., 40 hours per week) and total effort is individualized for each faculty member.
  • No one has more than 100% FTE, and most Schools/Colleges require that a specified percent be reserved for non-sponsored activity.
  • Effort committed in a research proposal, awarded by the sponsor, and expended on the project must be matched with an equivalent salary charge EITHER directly to the sponsor, or to a cost-sharing account, or to some combination of these. These dollars then are included in UR's Organized Research base and become part of our indirect (F&A) cost rate calculation. For NIH investigators whose salary is above the current NIH cap, salary above the cap will be designated to an unrestricted account in accordance with the Finance Department's salary cap program. Effort may NOT be reduced to accommodate for the salary cap.
  • UR (and its sponsors) expects a commitment of PI effort for each research proposal. Except in specified cases (such as travel or conference grants), proposals that include no PI effort will be questioned.
NOTE: The UR's cost sharing policy states that PI's are strongly encouraged to limit voluntary cost sharing of effort, and that expected benefits and sponsor review priorities should be weighed prior to making such commitments.
A commitment of effort is usually made in the proposal budget, but it may also be made in the narrative or in conversation with the sponsor. When effort is committed, awarded and expended, corresponding salary must be directly charged or cost-shared.


In January 2001, the Office of Management Budget issued a clarification of Circular A-21, confirming that voluntary uncommitted effort should NOT be accounted for separately and included in the organized research base for the calculation of indirect costs. That clarification also reinforces the expectation that PI's WILL make a commitment of effort to their research projects. Effort should be reported to the sponsor as actually devoted and charged.
In addition to the reporting of effort on individual awards, the UR is obligated by Federal regulation to certify, at least annually, that the distribution of an individual's salaried effort is reasonable in relation to the work performed. At the UR, this is done retrospectively via our Payroll Action ("turnaround") Forms. The certification of effort stated on the Forms must be signed by a person having first-hand knowledge of the actual effort performed on a sponsored project, preferably the PI. Finally, the UR is also obligated by Federal regulation to have an acceptable payroll system that adequately captures effort distribution. Our system adheres to the "Plan Confirmation System". Note that cost shared effort (mandatory and committed voluntary) is identified via an annual fiscal year survey of cost sharing, in addition to any project specific reporting.
 
 
 
 
13. Documenting Allocability

Connecting Expense to the Benefited Project
An expense is allocable to a project if the item being charged, e.g., salaries, supplies, travel, student tuition, etc., benefits the project. Allocability is one of the cost principles defined in A-21, and expenses that are not allocable may not be directly charged.
Allocability is a focus of audit activity. Project expenditures must be supported by evidence of direct benefit to the project. The availability of funds to pay an expense, or its inclusion in a budget, is NOT evidence of the allocability of that expense to the project. In addition, if an appropriate basis, such as usage, cannot be identified at the time of purchase to allocate the charges with relative ease, such costs may be considered indirect costs (vs. direct costs).


For supplies and other non-salary expenses, allocability can usually be documented through purchase/payment records or other files, as well as through the certification of expenditures. A knowledgeable person in the department must review each month's project expenditures. Any errors or requests for clarification should be brought to the PI's attention and, if necessary, corrected PROMPTLY. For salaries and wages, the PI's review and certification of project expenditures is the primary documentation of allocability.

If an expenditure statement includes an error, the department initiates a cost transfer to move the charge to the right account. This needs to take place as soon as possible after identifying the need for a correction, and be sufficient to document the benefit to the project being charged. Transfers are fertile ground for audit activity, and they will be reviewed carefully -- first by UR staff, and then often by an external auditor. One very good reason to "Do it right the first time!" is to avoid the level of scrutiny that a transfer, even one that is necessary and appropriate, will invite.


A-21 allows that PIs may allocate costs among different projects, as long as the allocation method reasonably approximates the degree to which each project benefits. Allocation methods must be documented in department files or in the online transaction documentation
 
 
 
14. Monitoring Project Spending


From Start to Finish
Two common situations in which the allocability of an expense will be critically reviewed are those where expenses are incurred before the start of a project period, and those where expenses are incurred just before the end of a project period. During the project period, while the work of the project is being carried out, sponsors may also look closely at the RATE of project expenditures. When a new award is assured but the funding is delayed, it may be appropriate to open a "contingent account."

It is NOT appropriate to charge these costs to other restricted or sponsored accounts, even if you intend to transfer them later. You should also avoid charging these to non-sponsored accounts and then transferring them later.

By opening a "contingent account," you will not have to transfer expenses onto a new account when funds arrive, thus avoiding both administrative burden and audit exposure. Opening a "contingent account" requires the identification of a departmental unrestricted account number or "guarantee account," in the event the sponsored funds do not arrive.
During the project period, PI's can jeopardize their funding when spending EITHER accelerates at an unanticipated rate OR falls significantly behind project projections.

While there may be very good programmatic reasons for accelerated or decelerated levels of spending, it is ALWAYS a good idea to keep the sponsor - both the technical and the administrative officers - informed in these situations. In the case of Federal contracts, there are specific requirements for notification when the total cost will be greater or substantially less than the estimated cost, OR at the point when expenditures will exceed 75% of the total project cost.
Finally, it may be necessary and appropriate to purchase equipment, supplies or other expenses late in the project period. In these cases, it is particularly important to document the allowability -- and particularly the allocability -- of the expense.

Expenses incurred after the project period has ended are unallowable, unless the award contained provisions permitting them to be charged. This includes expenses incurred for the production of final project reports. If you have work left to do on a project, but have run out of time, request a no-cost extension. This request must be coordinated through the Office of Research and Project Administration (ORPA).
 
 
 
15. Equipment

Proper Stewardship of Equipment

UR's Property Management System is another point of audit focus. The proper identification and use of equipment is critical to the University's management of both the direct and indirect costs of research. The integrity of this system depends on individuals throughout the campus paying proper attention to the acquisition, use, tracking, physical inventory and disposition of equipment.
Capital equipment is defined as equipment with an acquisition cost of $1,000 or more per unit and a useful life of more than one year. Fabricated equipment, where the aggregate cost of the components is $1,000 or more and where the fabricated asset has a useful life of more than one year, is also defined as capital. Capital assets must be accounted for in UR's property management system. Equipment (especially computers) should not be purchased on personal credit cards. Rather, all equipment should be purchased through established University Purchasing processes (Procurement Card or 312 requisition), to ensure proper accounting and identification in our property system.
Be sure to check the terms and conditions of your particular award for information related to:
  • allowability of equipment charges
  • equipment title
  • joint funding or
  • fabrication of equipment
Any of these conditions require careful attention at the time that the award is established and throughout the life of the project.
Awards may also require advance notification or prior approvals of equipment acquisitions. In these cases, the written approval of the sponsor's Grant or Contract Officer must be obtained before acquiring the equipment. This is particularly important during the last 90 days of the award period (see examples of Late-in-Period costs)

If you intend to use a piece of equipment to support multiple projects, or to support both sponsored and unsponsored activity, there should be an appropriate, documented allocation of the cost. If a piece of "special purpose", i.e., scientific, equipment is purchased especially to carry out a particular project, A-21 allows that the expense may be charged fully to the project, even if it is subsequently used for other purposes.
In addition, if you plan to purchase "general-purpose" equipment for your project, you will normally need prior sponsor approval. You will also need to include a particularly clear justification in your proposal, and consider carefully the appropriate allocation of the cost of such equipment. As with administrative costs, the direct charging of "general-purpose" or non-technical equipment is subject to significant audit scrutiny by both UR and external reviewers. (This includes the acquisition of desktop computers.) Such acquisitions are often unallowable, unless the equipment can be justified as being used exclusively for the actual conduct of the project or is utilized as special purpose equipment (e.g., a computer that is necessary to perform and document scientific studies).
One key to effective property management is the early involvement of your departmental administrator. In particular, it's important to keep your administrator informed about the condition and the location of equipment, particularly when equipment is moved to an off-campus site. The federal government requires that the UR conduct a physical inventory of equipment (to be reconciled with our property records) at least once every two years. It is critical that departments respond in a timely manner to this inventory, and an up-to-date knowledge of the location of equipment is vital.
 
 
 
16. Project Closeout

Reports and Records
Projects are considered completed or "closed out" after the sponsor receives and approves all reports as required by the terms and conditions of the award, and notifies UR of its acceptance and closure of the project. It is the responsibility of the PI to be aware of when reports are due and to submit programmatic reports by the required dates. Closeout procedures may vary by sponsor. ORPA is available to assist PI's in the closeout process.

Reports required at the close of a project are generally due within 90 days of the project end date. These include:
  • a final technical report - submitted by the PI
  • final inventions report - submitted by the PI to ORPA for submission to sponsor
  • final financial report - submitted by SPA upon the certification of expenditures by the PI
  • final property report - submitted by Property Accounting
The Department should send a copy of the transmittal letter for final technical reports to ORPA. This will facilitate post award audits, and minimize requests to the PI and Department staff for evidence that reports were submitted.

Failure to submit required reports by the sponsor's deadline can result in the sponsor withholding continued funding or final payment on an award, and/or suspension and termination of any and all active awards.


In some cases, all of a sponsor's awards to UR are held pending submission of reports. In other situations, a sponsor may hold up funding to a PI in another department because of an individual's failure to respond to repeated requests for a technical report.
In 1994, the University was in danger of losing its expanded authorities privilege for NIH awards because of the number of delinquent reports.

Project records, both scientific and administrative, need to be retained for specified periods after close-out. Normally, the retention period is three (3) years after the termination date. Records are subject to audit at any time during this period.
 
 
17. Resources

Who to Call, Where to Look
This site presents information on a number of issues related to the conduct of research and the management of sponsored projects. It cannot, however, answer all of the questions that may come up in the course of proposing and conducting research at UR.
PIs and others involved in the research enterprise need to know where to go to get answers to questions. UR's research policies and other resources are collected and organized online and in the ORPA Manual. Staff in your department and school have resources and training available in order to assist you and to provide knowledgeable guidance. Staff should contact ORPA to find out more about training opportunities.
Much of the information in the site focuses on audit issuesIf you are contacted by an auditor, either from within UR or from an external organization, you should be aware of assistance provided by UR.
Thank you for your attention to this material, and best of luck in your work here at the University of Rochester.