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Administration and Fiscal Management

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Human Resource Issues

The role of human resources in grant and contract administration is important in many ways. An administrator needs to know their institutionís hiring practices and policies, and should have a strong working relationship with all human resource departments. Below are several human resource issues an administrator may become involved in:

Departmental administration of effort certification
Federally sponsored research regulations require that specified employees' activity be periodically reported and certified (Office of Management and Budget Circular A-21). Effort certification is normally required for the following type of employees:
  • Those whose earnings are charged directly (at least in part) to sponsored agreements.
  • Those who contribute effort for cost sharing purposes.
  • Certain employees who devote effort to departmental administration.
Employee or Contractor Relationship?
Research administrators and PIs should determine whether a service provided on their sponsored research is being provided by an employee or an independent contractor. An employee is under the direction and control of the employer. The employer not only controls what is done, but also the method by which it is done. The employer has the right to discharge or terminate an employee.

An independent contractor controls the means and methods of activities, realizes profit or loss from services, works for more than one firm at a time, makes services available to the general public, has a significant investment in tools and materials, and furnishes tools and materials for job.

Types of Employment
Each institution has different types of employment designations. Faculty, administrative professional/exempt, classified staff/civil service, student part-time, non-student part-time are common categories. Each category is governed by a set of institutional policies that effect rate of pay, benefits, and other important issues.


Environmental Health And Safety

Research institutions usually have a service department dedicated to environmental health and safety (EH&S) to promote and support a safe, healthy, and clean environment for the well being of its employees, students, and visitors. Areas covered by EH&S can include environmental services, occupational health and safety, operations, public health / air and water quality and training and development. Services are generally provided free of charge and are part of the cost base for which an institution creates its facilities and administrative cost rate.

EH&S can assist in hazardous waste removal, chemical and battery recycling, clean up of chemical spills, reduction of environmental impact of research pollution, and contaminated site remediation. EH&S is an institutionís first line of defense to protect researchers, research assistants, and students.

Principal Investigators and administrators should work with EH&S when their projects involve lab safety, radioactive materials, hazardous wastes, or biosafety measures. EH&S departments generally provide lab safety manuals, lab signage, and training in hazardous waste disposal. EH&S also helps researchers/departments obtain appropriate personal protection equipment (PPE).


Procurement

Institutions provide various purchasing methods, depending on the source of funding for a project and each institutionís standard policies. There are common types of purchases and general policies that must be followed when using extramural funding, and an administrator should become familiar with these methods and policies. Basic requirements are determined by statute and state and institution administrative regulations. Institutional purchasing departments have primary responsibility for interpreting these requirements and establishing appropriate guidelines.

To assure compliance with all regulations, all purchases should have appropriate prior approval. A purchasing departmentís objective is to obtain specified goods and services at the lowest price, maintain quantity and quality, comply with regulations, and spend institution money wisely. To achieve this goal, suppliers are contacted locally, in state, out of state, and internationally through the competitive bidding process.

Many institutions require sole source justification to ensure fair business practices. This justification indicates that the requested vendor is the only available source of supply for a good or service, which must be unique or proprietary in nature. All sole source requests are closely reviewed by state and federal auditors.

Small business and minority firms should be used as suppliers to the extent it is consistent with effective performance policies, particularly in subcontracting under federal contracts. To comply with federal funding regulations, vendors providing goods or services must certify agreement to Executive Order Number 11246, which states a commitment to the active pursuit of equal employment opportunity.

The PI and administrator are responsible for ensuring that all equipment requisitions to be purchased with sponsored funds are in accordance with institution, state, and sponsor policies, regulations, and guidelines.

An administrator should be familiar with the clauses contained in the Federal Procurement Regulations (FPR) and the Defense Acquisition Regulations (DAR), which apply to all federal fund expenditures. These clauses cover many issues such as anti-kickback procedures, the Buy American Act, the North American Free Trade Agreement, integrity of unit prices, equal opportunity, notice to the government of labor disputes, restrictions on subcontractor sales to the government, the Service Contract Act of 1965, as Amended, and termination for convenience of government (education and other nonprofit institutions).


Research Integrity

The scientific community and the community at large rightly expect adherence to exemplary standards of intellectual honesty in the formulation, conduct, reviewing, and reporting of scientific research. Integrity requires acting correctly or properly. In research, integrity requires adhering to responsible research practices.

The United States Public Health Service Office of Research Integrity (ORI) was created in 1980 in response to problems brought to the publicís attention concerning scientific misconduct at four major research centers.

ORI oversees and directs Public Health Service (PHS) research integrity activities on behalf of the Secretary of Health and Human Services with the exception of the regulatory research integrity activities of the Food and Drug Administration. Included in the PHS are:
  • National Institutes of Health.
  • The Centers for Disease Control and Prevention.
  • The Food and Drug Administration.
  • The Substance Abuse and Mental Health Services Administration.
  • The Health Resources and Services Administration.
  • The Agency for Healthcare Research and Quality.
  • The Agency for Toxic Substances and Disease Registry.
  • The Indian Health Service.
Members of all research institutions share responsibility for promoting and maintaining the principles of academic integrity. Researchers must adhere to the highest ethical standards in the conduct of research activities and be committed to vigorously enforcing those standards. Good faith complainants are protected from retaliation by the provisions of state law and institutional policy. Each institution should have a policy for responding to allegations of scientific misconduct, setting forth the institutional officials who handle procedural requirements and receive inquiries and/or investigation reports. The appropriate officials determine whether to conduct an investigation, whether misconduct occurred, whether to impose sanctions, of whether to take other appropriate administrative actions.


Cost Accounting Standards

Public Law 100-679 (41 U.S.C. 422) requires certain contractors and subcontractors to comply with Cost Accounting Standards (CAS) and to disclose in writing and follow consistently their cost accounting practices. In 1968, Congress asked the General Accounting Office (GAO) to study the feasibility of establishing and applying CAS to provide greater uniformity in cost accounting as a basis for negotiating and administering procurement contracts. CAS were designed to achieve uniformity and consistency in the measurement, assignment, and allocation of costs to Government contracts. The standards were based on examinations of common cost accounting practices throughout the industry. Key to the standards are treating costs consistently, and ensuring reasonableness, allowability and allocability.

The four standards consist of CAS 501: Consistency in Estimating, Accumulating and Reporting Costs by Educational Institutions; CAS 502: Consistency in Allocating Costs Incurred for the Same Purpose by Educational Institutions; CAS 505: Accounting for Unallowable Costs; and CAS 506: Consistency in Using the Same Accounting Period for Purposes of Estimating, Accumulating and Reporting Costs.

The following sponsored projects are covered by CAS: all federal awards; all awards that contain any federal flow-through money; all awards where the terms and conditions of the proposal or award documents reference OMB Circular A-21 or Cost Accounting Standards; and any sponsored project whose funds are being used as cost sharing on a CAS covered project. Only the individual cost(s) being used as cost sharing will be subject to the definitions of direct charges and ďunlike circumstancesĒ. Awards not covered under CAS are still subject to the requirements listed in the award and University and State guidelines. Failure to follow CAS can lead to severe penalties when audits turn up improprieties.

For further information about cost accounting standards, visit the following website: http://www.arnet.gov/far/current/html/FARTOCP30.html.


F&A Agreements

Facilities and administration costs (F&A), sometimes called indirect costs, represent institutional costs that cannot be specifically associated with a particular grant. F&A rates are determined through a negotiated rate with a Federal agency based on costs for operations. F&A rates are reviewed and adjusted periodically to better reflect current institution costs.

It is incorrect to think that F&A funds are ďextra dollarsĒ for an institution. Projected F&A funds are part of the institutionís budget and are key to meeting real costs incurred for activities such as human resources, IT infrastructure, facilities maintenance, payroll processing and utilities. Most institutions return a portion of F&A back to the units of generation, to be used to foster new research and assist new researchers with seed money.

Under the Modified Total Direct Cost method of calculating F&A, it is important to know when preparing an extramural project budge that certain items are excluded. In particular, capital equipment purchases of $5,000 and above and subcontracts after the first $25,000 cannot be figured into the direct costs from which the F&A amount is determined. Requests for proposals (RFPs) or program announcement (PAs) may designate F&A restrictions that do not follow an institutionís established agreement. It is imperative that any F&A calculation that differs from the institutionís negotiated rate be submitted with supporting documentation from the funding agency.


Intellectual Property

Intellectual property (IP) is a term for various legal entitlements which attach to certain types of information, ideas, or other intangibles in their expressed form. The holder of this legal entitlement is generally entitled to exercise various exclusive rights in relation to the subject matter of the IP. The term intellectual property reflects the idea that this subject matter is the product of the mind or the intellect, and that IP rights may be protected at law in the same way as any other form of property. Intellectual property laws are designed to protect different forms of intangible subject matter including copyrights, trademarks and patents.

Most research institutions house a department for the protection and administration of intellectual property and to encourage the transfer of technologies and disclosure of intellectual property. A principal investigator cannot negotiate license agreements or disclose institution confidential information to a company or potential licensee, instead these are to be disclosed to and managed by the institutionís office of intellectual property administration per the institutionís policies and procedures. In keeping with the federal Bayh-Dole Act a PI, who is a named inventor on institution owned intellectual property, can receive royalties from institution-licensed inventions.


International Issues

An administrator must be aware of the risks associated with international sponsored research. Issues such as human subject research approvals, budgeting and oversite (currency issues), host government inter-workings and politics, personnel issues, selecting and managing subcontractors, supplies and inventory management, and real estate leases and purchases must be addressed for a successful research experience.

Institutions must understand the operation and adequacy of local institutional review boards (IRB) and guarantee that the institutionís own requirements are met.

The administrator should understand the grant terms and objectives and know to what extent the government agency will be involved in daily work. The administrator must become familiar with the foreign government offices such as tax, labor, health and education ministries.

Local legal counsel may be required and should be obtained to help with agreement negotiation, obtaining required licenses, personnel issues, due diligence in selecting subcontractor, and tax issues.