Grant Expense Guidelines

The Office of Management and Budget (OMB) has combined many federal circulars into a single guidance document to be used by all federal agencies. This combined document is known as "Uniform Guidance" or 2 CFR 200, and went into effect December 26, 2014.

Drake University must comply with Uniform Guidance (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Drake University also has established allowable costs (Finance & Administration Guidelines and Policies). If allowable costs for Drake University and Uniform Guidance differ, the more strict regulations will apply.

It is the responsibility of the Principal Investigator (PI) to ensure that all funds are spent in compliance with the funding documents and University policies.

Personnel

Employee vs. Independent Contractor

Determine whether the personnel in your grant should be "Employees" or "Contractors/Consultants." Drake's qualtrics from the Human Resources Office can help make that determination.

Independent Contractor/Consultant

Independent contractors should be bonded and insured. Payments should be made to the consultant within a month of providing services.

Employees

Grant-funded employees are treated the same as other Drake employees. The PI must contact Human Resources regarding the process for new hires and Grants Accounting regarding available budget dollars before making any commitments for hiring. Grant-funded employees will be subject to the same pay scale as other Drake employees in similar positions. Human Resources will help in determining the appropriate pay scale based on the job description and requirements.

Drake employees being paid through grants will receive the same rate of pay as they receive for similar duties at Drake University. When exempt Drake employees receive summer or additional pay, an appointment letter must be drafted by the Dean's Office and routed through Sponsored Programs Administration & Research Compliance (SPARC). This must be done before the work is initiated.

For non-exempt Drake employees paid hourly, a time card must be completed and submitted to payroll weekly as the work is done.

Salary Rates for Faculty

SPARC offers the following guidance for faculty who, in addition to their 9/10 month academic year base salary, choose to devote effort and receive compensation from sponsored projects during the summer months of June, July, and August.

Charges for work performed by faculty on sponsored agreements during the summer months will be determined for each faculty member at a rate not in excess of the 9/10 month academic year base salary divided by the period to which the base salary applies. For example, a 9/10 month faculty member making $54,000 a year could earn an additional $18,000 during the summer months on grants.

Please note the following restrictions:

All effort devoted and corresponding salary charged to a sponsored project(s) must be in compliance with sponsor and institute policies.

Committed effort on a sponsored project should be devoted exclusively to the activity supported by that sponsored project. Salary charges must align on a monthly basis to the effort provided to the sponsored project.

Time committed to other activities performed during the summer months, e.g., any general administrative or academic activities or writing new proposals may not be charged to a sponsored project (§200.430).

Students

Staff and faculty who receive grants and wish to employ students to work with them should contact Human Resources. Before students begin working, they are required to complete specific forms (I-9, W4s, and direct deposit). Additionally, a position control number for the grant-specific job and an hourly wage (based on the grant) will be assigned by Human Resources.

Students record their time worked online, using a timesheet through myDrake. In rare instances, some student work hours are recorded on a paper timecard. Questions pertaining to the method of recording the time should be directed to Human Resources.

Regardless of the method of recording time, students should record their time as they work. Timesheets are to be submitted by the 2nd business day of the following month, by noon, for processing. Timesheets then need to be approved by the PI, or a proxy, within a timely manner. Time cards must use the student's Banner ID number. Also, each time card must include the rate of pay and the grant fund code. Time cards should be signed by the student employee and the PI, and turned into payroll before 9:00 a.m. on the second working day of the following month.

Students are paid on the 12th of each month, with payment directly deposited into a checking or savings account. If, for any reason, students need to change their direct deposit account information, an updated form is required.

Employee Benefits

Grant employees have the same benefits as other Drake employees.

Drake negotiates staff benefit rates with the U.S. Department of Health & Human Services for use on all grants.

These rates are applied to all non-student salaries, for both full- and part-time employees. The negotiated rates are charged to all externally funded grants on a monthly basis. If staff benefits are an allowable cost to the funding agency, but no benefits are budgeted, the salary budget will be reduced to allow for charging the grant for benefits at the negotiated rates. 

Benefits are not charged on student wages paid by a grant during the academic year. Students employed and taking less than 6 credit hours will be charged FICA at the rate of 7.65%.

Facilities and Administration Costs

Facilities and Administration Costs (F&A) are indirect costs also referred to as overhead costs or administrative costs. These are actual costs incurred to conduct the normal business activities of an institution and are not readily identified with or directly charged to a specific sponsored research award. The normal activities of the University that are classified as F&A expense include:

• General Administration
• Departmental Administration
• Sponsored Programs Administration
• Operation and Maintenance
• Library
• Building and Equipment Depreciation
• Non-Capitalized Interest

Requirement

F&A are actual costs which are necessary to support sponsored programs, but which cannot be readily assigned to individual projects. F&A should be requested at Drake's approved rate on all sponsored programs applications unless the sponsor prohibits F&A or designates another rate. Exceptions must be approved by the Vice President for Business and Finance and the Provost before the application is submitted.

Drake's Negotiated Rate

Drake University's F&A rate is calculated in accordance with federal cost principles and is negotiated periodically with the U.S. Department of Health and Human Services (HHS).

On-Campus: A project is defined to be "on-campus" if 50% or more of the Drake activities are performed in facilities and/or to which rent is directly paid by Drake. In this case, the on-campus rate will apply to the entire project and the first $25,000 of each subcontract.

Off-Campus: A project is defined to be "off-campus" if 50% or more of the Drake activities are performed in facilities outside of Drake and/or to which rent is directly allocated to the project(s).

Exceptions: Any exceptions to the above must be approved by the Vice President for Business and Finance and the Provost.

Subcontracts

As the primary recipient, ultimate responsibility for any federal funds rests solely with Drake University. The federal government holds the recipient, not the subrecipient, responsible for compliance.

Subawards are described in the grant application and funded in the approved awards. Otherwise, prior approval from the granting agency must be obtained before issuing a subrecipient award.

A subcontract or subaward is an agreement that is written under the authority of, and consistent with, the terms and conditions of a prime award and authorizes a portion of the research or substantive effort to be performed by another organization, which is a separate legal entity. The involvement of the subcontractor organization is that of actually performing a portion of the programmatic activity as opposed to simply providing a routine service to the prime award recipient.

The following sections outline the identifying characteristics of subcontracts and monitoring:

• Subcontract vs. Vendor
• Subaward Monitoring

Subcontract vs. Vendor

One or more of the following factors indicate a subcontract:

The other organization which,

• Has responsibility for programmatic decision-making
• Contributes to the scholarly/scientific conduct of the project as described in the statement of work for the prime award
• Uses the funding to carry out its own program, as compared to providing goods or services for a Drake program
• Provides matching funds or cost sharing
• Requires considerable discretionary judgment and the unique expertise of the other organization in the conduct of the work
• Measures performance against the objectives of the prime award
• Considers its investigator as a co-author of publications resulting from the work performed under the prime award
• Has responsibility for adherence to applicable federal program compliance

One or more of the following factors indicate a vendor:

The other organization which,

• Provides goods and services within normal business operations
• Provides similar goods and services to many different purchasers
• Operates in a competitive environment
• Provides goods and services that are ancillary to the operation of the federal program
• Is not subject to compliance requirements of the federal program

Program Income

Program income means gross income earned by the non-Federal entity (Drake University) that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in §200.307 paragraph (f) Income after the period of performance. Program income includes but is not limited to income from fees for services performed, the use or rental or real or personal property acquired under Federal awards, the sale of commodities or items fabricated under a Federal award, license fees and royalties on patents and copyrights, and principal and interest on loans made with Federal award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in Federal statutes, regulations, or the terms and conditions of the Federal award, program income does not include rebates, credits, discounts, and interest earned on any of them. See also §200.407 Prior written approval (prior approval). See also 35 U.S.C. 212 “Disposition of Rights in Educational Awards” which applies to inventions made under Federal awards.

Program income is gross income earned by the recipient directly generated by a supported activity or earned as a result of the award. This does not include rebates, discounts or credits.(§200.1 Definitions. Program income)

Program income earned during the project period shall be retained by Drake and shall be used in one or more of the following ways: (§200.307(e) Use of program income.)

1. It may expand the scope of the project over and above the federal and nonfederal shares provided in the original budget;
2. It may be used exclusively to meet the matching and cost sharing obligations of a recipient, in whole or in part;
3. It may be spent on the project and thereby proportionally reduce the federal and nonfederal required contributions to a project.

In the event the federal awarding agency does not specify in its regulations or the terms and conditions of the award, the default method is #3, which means the actual federal share of a project will be reduced.

Method #1 is favored because it allows more funds to carry out the program activity.

If treatment of program income is not addressed in the grant application or award notification, prior approval must be obtained from the grantor if using methods #1 or #2.

Note: Once the final financial report has been submitted by Drake University, any further program income belongs to Drake University and Drake has no further reporting requirements to the federal funding agency.