Authorized Grant Expenditures Policy

The Principal Investigator (PI), Project Director (PD) or Responsible Administrator as identified in the Program Set-up Form is generally the primary manager for the grant and initiates expenditures charged to the grant. (An exception to this exists for PI/PD salaries.  See Salaries paragraph below). 

All expenditures under Federal grants must conform with the guidance in the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance" and abbreviated in this policy to “UG”), which was officially implemented in December 2014. The UG – a "government-wide framework for grants management" – synthesizes and supersedes guidance from earlier OMB circulars.  The guidance in this policy reflects the UG.  Failure to comply with the UG as a whole can have serious consequences for the Colleges (see UG §200.338).  Accordingly, it is important for the PI/PD to familiarize themselves with the regulatory requirements summarized in this policy.

Additionally, the PI/PD must manage and administer Federal awards in a manner that ensures that Federal funding is expended and associated programs are implemented in full accordance with U.S. statutory and public policy requirements, including, but not limited to, those protecting public welfare, the environment, and prohibiting discrimination. The Federal awarding agency must communicate to the Colleges all relevant public policy requirements, including those in general appropriations provisions, and incorporate them either directly or by reference in the terms and conditions of the Federal award.  (UG §200.300)

The UG describes the costs that are eligible for reimbursement under Federal grants and contracts (allowable costs), and the costs that are not eligible for reimbursement (unallowable costs).  Except where otherwise authorized by statute, costs charged to a Federal award must meet the following general criteria in order to be allowable (UG §200.402 to §200.411):

  • Be necessary and reasonable for the performance of the Federal award and be allocable thereto under the UG principles;
  • Conform to any limitations or exclusions set forth in the UG principles or in the Federal award as to types or amount of cost items;
  • Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the Colleges;
  • Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost;
  • Be allocable to the Federal award;
  • Be determined in accordance with generally accepted accounting principles (GAAP);
  • Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period;
  • Be adequately documented.

Contact the Office of Sponsored Programs to determine the procedures involved for expending funds on items that relate to an awarded grant but were not included in the awarded grant’s budget.  For Federal awards, the Colleges are required to report deviations from budget or project scope or objective, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with UG §200.308.  Note that the changes requiring pre-approval are not all cost related (e.g., no cost scope or objective changes, changes in key persons specified in the application or award, etc.).  Accordingly, the PI/PD is encouraged to familiarize themselves in advance with the detailed requirements in UG §200.308.

Federal grant agreement related e-procurement transactions, initiated by the PI/PD faculty support, must be reviewed and approved by the PI/PD. All Federal grant agreement related e-procurement transactions, initiated and approved by the PI/PD, must be approved by the Grants Manager in the Business Office.

All Federal grant agreement related requests for reimbursement to the PI must be signed by the PI and reviewed and approved by the Grants Manager in the Business Office prior to the reimbursement being made.  The Business Office review will verify compliance and appropriateness to determine if the charge is correctly accounted for.

See the Unallowable Costs Policy for handling of expenditures deemed unallowable upon review.

Discussion of Specific Cost Categories

Consulting Services
The cost associated with the use of services of consultants may be limited by different granting agencies.  Please contact the Office of Sponsored Programs for specifics.  In general, consultants can only be used if:

  • There is evidence that the services to be provided are essential and cannot be provided by persons receiving salary support under the grant or otherwise compensated for their services;
  • A selection process has been employed to secure the best qualified person available; and
  • The charge is appropriate considering the qualifications of the consultant, normal consulting charges, and the nature of the services rendered.

Documentation detailing the necessity, selection process, and the qualifications of consultants used must be maintained to support the costs of consultants.

Equipment and Other Capital Expenditures
Under UG §200.439, special purpose equipment (e.g. scientific equipment) is allowable as a direct charge, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency.  Capital expenditures for general purpose equipment (e.g. office computer equipment) are unallowable as direct charges, except with the prior written approval of the Federal awarding agency.  Equipment and other capital expenditures are unallowable as indirect costs.

Faculty/Staff Salaries, Student Wages, and Time and Effort Reports
Salaries and wages may be charged to grants as appropriated in the approved grant budget.  For Federal grants, such charges must also comply with the detailed guidance in UG §200.430
Labor distribution information, i.e., the fact that an employee’s salary or portion of their salary should come from grant funds, must be communicated to Human Resources and sent to the Payroll Department for processing.

Student employment procedures must be followed to pay student wages from grant funds.  Student wages must be approved by Human Resources and Human Resources should be consulted when including student wages in a grant proposal.  See the Colleges’ Student Employment Handbook as well as the Supervisor Handbook for further details.

Grant salaries and wages can come in several forms such as monthly salary, hourly wages, and summer research stipends.  Regardless of the form, as described under Monitoring Expenses/Managing the Grant, below, for Federally funded grant agreements the wages will be reviewed by the Grants Manager in the Business Office, at least quarterly to verify compliance and appropriateness to determine if the charge is correctly accounted for.

Regular Time and Effort reporting must be completed as outlined in the Colleges’ Time and Effort Reporting Procedures, to verify the accuracy and allowability of Federal grant agreement salaried wages.  Hourly wages are supported by time sheets.

Fringe Benefits and Indirect (F&A) Costs (UG §200.414 and Appendix III to Part 200)
The Business Office is responsible for recording as grant expenses the fringe benefit charges and the approved “indirect (facilities & administrative (F&A)) costs” costs (formerly known as indirect costs).  Fringe Benefits and indirect (F&A) costs are charged according to the approved budget and the above-referenced UG.

The Colleges have a negotiated indirect (F&A) costs rate with the Department of Health and Human Services.  Contact the Office of Sponsored Programs for the most recent rate.  The Colleges’ federally negotiated indirect (F&A) rate must be accepted by all Federal awarding agencies, unless a different rate is required by Federal statute or regulation, or when a different rate is approved by a Federal awarding agency head or delegate based on documented justification.

The Colleges’ fringe benefit rate changes annually.  Contact the Office of Sponsored Programs for the most current rate.

Property and Services
For expenditures under Federal awards, refer to the requirements set forth in the Hobart and William Smith Colleges’ Federal Grant Purchasing Policy.

Supplies
Under UG §200.453, supplies necessary to carry out a Federal award are allowable.  However, routine office expenses (supplies, postage, telephone, photocopies, etc.) may not be charged to grants unless they are specifically included in the awarded budget.  Furthermore, please note that:

  • Purchased materials and supplies must be charged at their actual prices, net of applicable credits. Withdrawals from general stores or stockrooms must be charged at their actual net cost under any recognized method of pricing inventory withdrawals, consistently applied. Incoming transportation charges are a proper part of materials and supplies costs;
  • Materials and supplies used for the performance of a Federal award may be charged as direct costs. In the specific case of computing devices costing <$5,000, charging as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award;
  • Where federally-donated or furnished materials are used in performing the Federal award, such materials will be used without charge.

Travel Costs (UG §200.474)
All airline reservations must be made following the Colleges’ Travel and Reimbursement Guidelines available on the Business Office websiteFederally-funded travel must be on US flag carriers (with some limited exceptions related to travel logistics), in compliance with the Fly-America Act.  Mileage reimbursement rates are adjusted annually, typically on January 1st by the Business Office.  For the most current rate, visit the Business Office website.

Travel costs related to a Federal award must not exceed the costs normally allowed by the Colleges for non-grant travel allowed under the Colleges’ Travel and Reimbursement Guidelines. Travel costs that are charged directly to a Federal award must be supported by documentation that justifies that participation of the individual is necessary to the Federal award.

Airfare costs in excess of the basic least expensive unrestricted accommodations class offered by commercial airlines are unallowable under Federal awards, except when such accommodations would:

  • Require circuitous routing;
  • Require travel during unreasonable hours;
  • Excessively prolong travel;
  • Result in additional costs that would offset the transportation savings; or
  • Offer accommodations not reasonably adequate for the traveler's medical needs.

If any of the above airfare exceptions apply, the PI/PD must justify and document these conditions on a case-by-case basis in order for the use of first-class or business-class airfare to be allowable.

Where air travel is not by commercial carrier (e.g., charter aircraft), the portion of such costs that exceeds the cost of airfare as provided for in paragraph (d) of UG §200.474, is unallowable.

If a customary standard airfare or other discount airfare is unavailable for specific trips, the PI/PD must provide documentation to demonstrate that such airfare was not available in the specific case.

Travel costs for dependents must not be charged to a Federal award, except for travel of duration of six months or more with prior approval of the Federal awarding agency.
Temporary dependent care costs (as dependent is defined in 26 U.S.C. 152) above and beyond regular dependent care that directly results from travel to conferences directly charged to a Federal award is allowable provided that:

  • The costs are a direct result of the individual's travel for the Federal award;
  • The costs are consistent with the Colleges’ documented travel policy for all entity travel; and
  • Are only temporary during the travel period.

For all travel costs related to a grant, the PI/PD must submit receipts as described in the Colleges’ Travel and Reimbursement Guidelines.  No Federal grant funds may be used for alcoholic beverages and the PI/PD must verify that reimbursements for meals do not include payment for alcoholic beverages.

Travel reimbursements and advances must be requested by submitting the appropriate form (see the Travel Report or Request for Reimbursement Form on the Business Office website) to the Business Office.

Monitoring Expenses/Managing the Grant
The PI/PD is responsible for monitoring all expenses charged to the grant.  The Business Office recommends regular review of grant budgets and will provide training on how to access budget information in PeopleSoft as requested.  Be sure that all invoices, vouchers and payroll charges that have been submitted are properly charged to the grant.  Grant budget overruns are typically charged to the department of the PI/PD.

The Grants Manager in the Business Office will review the financial details of each Federal grant and send a budget-to-actual spreadsheet to the PI/PD at least each quarter, and the PI/PD is responsible for reviewing this spreadsheet timely to verify that there are no errors or issues with the costs charged. The PI/PD should review these reports each time they are received to ensure that issues are identified within the Colleges’ fiscal year.

Errors can occur; expenses posted to a grant in error can easily be moved if the error is caught within the Colleges’ fiscal year (June 1st to May 31st), but can be corrected up until the point when a grant is to be officially closed out.  However, as the Federal awarding agency can charge interest on errors (see UG §200.410 and §200.345), it is important to prevent errors where possible and identify them promptly when they do occur. For errors related to Federal grant agreements see the Federal Grants Cost Transfer Policy for correction procedures. 

In addition to reviewing the budget-to-actual spreadsheets noted above, for payroll purposes, it is important to communicate to HR when someone is hired to be paid by a grant. Additionally, HR must make sure that they are charging payroll expenses appropriately to the grant rather than the PI/PD’s academic department, if applicable. When payroll is not charged to the appropriate account, a Journal Entry can be posted to correct the error, and Payroll must be notified to make the change, effective immediately.  For errors related to Federal grant agreements see the Federal Grants Cost Transfer Policy for correction procedures.

As noted previously, the Colleges are required to report deviations from budget or project scope or objective for Federal awards, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with UG §200.308.  The PI/PD must sufficiently monitor progress under the award to allow compliance with these requirements.

Monitoring and Reporting Program Performance (UG §200.328)
The PIs/PDs are responsible for oversight of the operations of the Federal award supported activities. The PIs/PDs must monitor their activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the PIs/PDs must cover each program, function or activity.  UG §200.328 provides guidance on the periodic performance reporting requirements that PIs/PDs must adhere to.

Close Out (UG §200.343)
The Federal awarding agency or pass-through entity will close-out the Federal award when it determines that all applicable administrative actions and all required work of the Federal award have been completed by the Colleges. To complete this process:

  • The Colleges must submit, no later than 90 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award.  The Federal awarding agency or pass-through entity may approve extensions when requested by the Colleges;
  • Unless the Federal awarding agency or pass-through entity authorizes an extension, the Colleges must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award;
  • The Colleges must promptly refund any balances of unobligated cash that the Federal awarding agency or pass-through entity paid in advance or paid and that are not authorized to be retained by the Colleges for use in other projects.
    • If the Colleges do not do so, the Federal awarding agency may take other actions as specified in UG §200.345, including withholding payment of other funds and charging interest.
  • The Colleges must account for any real and personal property acquired with Federal funds or received from the Federal Government in accordance with UG §200.310 “Insurance coverage” through UG §200.316 “Property trust relationship” and UG §200.329 “Reporting on real property”.

CONTACT

Business Office
22 Seneca Street
Geneva, NY 14456

Phone: (315) 781-3343
Fax: (315) 781-3655
businessoffice@hws.edu

Hours: 8:30 a.m. to 5:00 p.m.

 

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Geneva, NY 14456
(315) 781-3000

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