Contracts & Grants: Fiscal Oversight
Regularly Monitor the Award
As the project progresses, the project should be monitored monthly to ensure adherence to award terms and conditions.
- Financial Ledger Reviews should be performed at least once a month.
Here are a few suggested methods and a checklist to help you ensure that your project and award are on track and within compliance.
- Are you completing all reports as required by the award sponsor?
- Has there been a change of plan or scope of work?
- Are you on track to complete the project within award period?
- Has there been a change in PI or other key personnel? This includes PI disengagement from the project for more than 3 months or a 25% reduction in effort devoted to the project.
From the UC Davis, PI Ledger Review Report instructions
Only costs which directly benefit a project may be charged to a project and must be in accordance with the terms and conditions of the award. The following are a few suggestions to consider when reviewing the report for allowability and allocability of expenses charged to your accounts.
Salary and Benefits
- Did the individuals listed on the report work on the project in proportion to the percentage of their salary charged?
- Are all salary charges allocable to the project?
- Are there any individuals who worked on the project and should have been charged but do not appear on the account?
- Do any changes in staff assignments need to be communicated to your administrator so payroll charges will accurately reflect effort expended in support of the project in future periods?
Supplies and Expense
- Are all expenses on the account allocable and allowable to the project?
- Are there any additional expenses that should have been charged but do not appear on the account?
- If expenses were allocated to multiple projects, was the allocation to each project based on proportional benefit?
- Is the equipment expense allowable according to the terms of the agreement?
- Were the necessary prior approvals obtained, if applicable?
- If the equipment was charged to multiple projects was the allocation methodology appropriately documented to support the charge to each account?
- Was the cost allocated to each project based on proportional benefit?
- Is travel allowable according to the terms of the agreement?
- Did the travel directly benefit the project?
- Were the necessary prior approvals obtained, if applicable?
- Are reimbursements to subcontractors in alignment with actual work performed in support of the project?
Other Considerations While Reviewing the Report
- Are the percentages listed an accurate reflection of commitments made to the sponsor?
- Are the listed individuals on track to meet their effort commitments to the sponsor?
- Does the % Spent to Project Completion shown on the report appear reasonable in light of your knowledge of how the project is progressing?
- Are there any budget categories in overdraft that require re-budgeting actions, including approvals, if applicable?
- If the award is ending within the next ninety days and the project will not be completed within that timeframe, has a no-cost extension been initiated?
A cost transfer is the movement of an expense from one account to another. Cost transfers are closely scrutinized by auditors and should be rare exceptions, not regular occurrences. If you observe an incorrect expense on your ledgers, contact the BOC or your Unit Business Manager to initiate a cost transfer. The transfer must be recorded in the general ledger within 120 days from the close of the month in which the original charge is posted to the ledger. You will need to approve a cost transfer that includes a full explanation and justification for the change. It should include the reason why the original charge was incorrect and the reason why the charge is allowable and allocable to the new account.
Cost Share Certification
Please see also the Budget Preparation – Cost Sharing Tab for more information on what is Cost Sharing and eligible costs.
The PI, unit Business Manager, BOC, and Extramural Funds Accounting staff share responsibility for tracking, reporting, and certifying cost-shared direct costs. At ANR, tracking and certification is facilitated by the Cost Share Tracking system. The BOC or unit Business Manager is responsible for recording and tracking cost share expenses. The PI is responsible for reviewing and certifying cost share reports to ensure that all cost share contributions are captured correctly and that all cost sharing obligations are met in a timely manner.
It is important to notify OCG immediately if there is any possibility that a cost sharing commitment will not be fulfilled. This includes situations in which a PI transfers to another institution during the performance period of a project, because the sponsor may hold ANR responsible for fulfilling all, or a proportionate share, of any cost sharing commitment associated with the project.
The PI and/or the BOC or unit Business Manager must submit cost share contribution reports, signed by the PI, to Extramural Funds Accounting for submission to the sponsor in accordance with the reporting terms defined in the award agreement
For ANR employees paid through the UC Davis payroll system, general effort reporting and certification is conducted annually and aligns with the federal fiscal year (October 1 through September 30). At UC Berkeley and UC Riverside, effort reporting and certification for federally funded employees is conducted quarterly. In addition to the general effort reporting, the Agricultural Research, Extension, and Education Reform Act (AREERA) requires a quarterly confirmation of effort expended, which is conducted outside the UC Davis annual reporting and certification process. This quarterly confirmation of effort expended is initiated by ANR Financial Services.
What is Effort Reporting? Effort reporting is the documentation of time spent by any employee working on a federally funded project. Effort reports demonstrate that the amount charged or cost-shared on an extramural award is accurate and is reported for all employees whose salaries are charged directly to federal funds and federal flow through funds. As Directed by the VP ANR, PIs and Co-PIs are required to commit a minimum of 1% effort for federally funded awards up to $25,000 and a minimum of 2% effort for awards of $25,000 or more. As effort reports show the percentage of time an individual spends on a funded project, the effort report must account for all of an individual’s total institutional activities and the combined effort must always add up to 100 percent, regardless of the number of hours assigned to the funded project.
PIs and others in academic and management classifications are required to certify their own effort. Effort for other employees must be certified by the PI or by some other responsible official. The certified must have firsthand knowledge of the work performed and the amount of effort expended on that project.
Invoices / Financial Reports
Depending upon the terms and conditions of the award, monthly or quarterly invoices may be required to be submitted to the sponsor. Accounting services prepares the expenditure reports that must be reconciled by the administering department or regional office and approved by the PI prior to submitting to the sponsor. Any after-the-fact cost transfers must be properly documented.
Monitoring Your Subawardee
Subawardees must comply with all applicable terms and conditions of the prime award. The PI is responsible for monitoring the Subrecipient for compliance with the award terms and for satisfactory performance which includes the completeness of the work performed and fulfillment of any applicable cost sharing commitments. The PI must review the subawardee’s performance reports, maintain regular contact with the subawardee about program activities and progress, and review their invoices. Invoices must be approved by the PI prior to processing for payment.
Subrecipient Checklist to Monitor Your Subawardee’s Performance:
Use financial reports, regular contact with subrecipient, invoice reviews, or any combination thereof.
- Are subrecipients adhering to committed scope of work?
- Are they including only allowable costs?