Federal Grants Management
Federal grants may be awarded for various academic and research projects at the university. If you are the recipient of a Federal grant, there is a great deal of information that your organization will need in order to be a successful steward of Federal funds. Funds received directly or indirectly from the Federal Government are subject to a rigorous annual reporting and audit process.
Departmental management of Federal funds should be undertaken only after consultation with the Office of Sponsored Programs (OSP).
Please see the Federal Grant Management course in Carmen that is required for anyone at the university who is managing a grant within the department.
As an employee of The Ohio State University, you are assuming an important stewardship role over the funds you receive via grants. The Federal Grant Management course in Carmen is required for anyone at the university who is managing a grant within the department. This course describes pertinent requirements for managing Federal grants and awards.
After completing this course, participants will be able to:
- Determine if your federally funded grant should be managed by the Office of Sponsored Programs (OSP).
- Describe the responsibilities of a Federal Grant Manager.
- Explain the 14 basic compliance requirements associated with Federal funds.
- Identify the fiscal activities of a Federal Grant Manager.
- List the items to review in a Grant Agreement.
- Identify the tasks involved when approaching the end of the grant.
- Explain the assistance available from the Office of Sponsored Programs in managing a Federal grant.
- Describe the types of audits conducted to ensure that a project is fulfilling its objectives.
Office of Sponsored Programs
Departmental management of Federal funds should be undertaken only after consultation with the Office of Sponsored Programs (OSP). Ample consideration should be given to the unit's ability to adequately comply with the relevant rules and regulations. OSP's grant management capabilities extend beyond research agreements. They are experts in dealing with Federal sponsors and are here to serve and protect the university.
If an agreement has one or more of the following characteristics, it must be administered by OSP:
- Significant compliance concerns.
- Activity utilizing human subjects or animals.
- Materials subject to export controls, radioactive materials or similar items that are subject to regulatory oversight.
- Activity that has time and effort reporting requirements.
- Documented cost sharing requirements.
- Publishable research and/or new knowledge.
If your grant has one or more of the activities listed above, refer to Tab 4 (OSP) of the Federal Grant Management course for more information about their grant management services.
A-133 Compliance Supplement
The OMB A-133 Compliance Supplement is a large and extensive United States Federal Government guide created by the Office of Management and Budget (OMB) for audit firms that conduct Single Audit examinations under A-133. This guide identifies compliance requirements that auditors include as part of a Single Audit, which is an annual examination of an entity that expends $500,000 or more of Federal grants or awards. The university and all employees managing Federal grants must comply with this document because we are subject to the requirements of the Single Audit Act.
The A-133 Compliance Supplement provides additional details on 14 compliance requirements(link is external) that apply to all Federal funds, including those that may be specific to individual Federal programs. Any failure to comply with requirements may seriously impact the university's ability to continue to receive Federal grants.
Each Federal program has a unique CFDA number in which the first two digits identify the granting agency. For example, US Department of Agriculture programs are in the 10.xxx series of CFDA numbers. The A-133 Compliance Supplement(link is external) is available online.
The Catalog of Federal Domestic Assistance(link is external) is available online. Individual CFDA numbers can be located using keyword searches or by searching all programs administered by a specific Federal agency.
See below for summarized information about compliance requirements that apply to all Federal funds, including those that may be specific to individual Federal programs:
Activities Allowed or Unallowed
The specific requirements are unique to each Federal program and are found in the provisions of contract or grant agreements pertaining to the program.
In addition, American Recovery and Reinvestment Act of 2009 (ARRA) restricts usage of funds for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool.
Allowable Costs/Cost Principles
OMB Audit Circular A-21 describes selected cost items, allowable and unallowable costs, and standard methodologies for calculating facilities and administrative costs (F&A) at institutions of higher education.
Section (J) of Circular A-21(link is external) includes general provisions for selected items of costs (including unallowable costs).
Federal funds must be separately accounted for using unique fund numbers (56XXXX range). Expenses charged to these funds must be clearly identifiable as individually allowable costs.
When grant funds are provided on a reimbursement basis, program costs must be paid for with university funds before reimbursement is requested from the Federal Government.
When grant funds are advanced, the university must follow procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and their disbursement by OSU.
Under the Cash Management Improvement Act of 1990 (CMIA), the university may be required to pay interest to the Federal Government in some circumstances.
Davis-Bacon Act (Prevailing Wage)
When required by the Davis-Bacon Act, ARRA, or by Federal program legislation, all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the U.S Department of Labor.
To ensure compliance with these requirements, departments must work with Facilities Operation and Development (FOD) on all construction and renovation projects.
Eligibility of Grant Awardees
The specific requirements for eligibility are unique to each Federal program and are found in the laws, regulations, and the provisions of contract or grant agreements pertaining to the program.
This compliance requirement specifies the criteria for determining the individuals, groups of individuals (including area of service delivery), or subrecipients that can participate in the program and the amounts for which they qualify.
Equipment and Real Property Management
Unless otherwise specified, title to equipment and real property acquired by the university with Federal awards vests with the university.
Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every two years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained.
When equipment with a current per unit fair market value of $5,000 or more is no longer needed for a Federal program, it may be retained or sold with the Federal agency having a right to a proportionate (percent of Federal participation in the cost of the original project) amount of the current fair market value.
With written approval from the Federal awarding agency, real property may be used in other federally sponsored projects or programs that have purposes consistent with those authorized for support by the Federal awarding agency. The university may not dispose of or encumber the title to real property without the prior consent of the awarding agency.
Matching, Level of Effort and Earmarking
Matching or cost sharing includes requirements to provide contributions (usually non-Federal) of a specified amount or percentage to match Federal awards. Matching may be in the form of allowable costs incurred or in-kind contributions (including third-party in-kind contributions). If proposed and included in the grant agreement, cost sharing becomes a requirement of the grant.
Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non-Federal or Federal sources for specified activities to be maintained from period to period, and (c) Federal funds to supplement and not supplant non-Federal funding of services.
Earmarking includes requirements that specify the amount or percentage of the program's funding that must be used for specified activities, including funds provided to subrecipients. Basic criteria for acceptable matching (cost sharing) are:
Verifiable from the non-Federal entity's records.
Not included as contributions for any other federally assisted project or program, unless specifically allowed by Federal program laws and regulations.
Necessary and reasonable for proper and efficient accomplishment of project or program objectives.
Allowed under the applicable cost principles.
Not paid by the Federal Government under another award, except where authorized by Federal statute to be allowable for cost sharing or matching.
Provided for in the approved budget when required by the Federal awarding agency.
Period of Availability of Funds
Federal awards may specify a time period during which the university may use the Federal funds. Where a funding period is specified, the university may charge to the award only costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency.
If authorized by the Federal program, unobligated balances may be carried over and charged for obligations of a subsequent funding period. "Obligations" means the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment during the same or a future period.
Procurement and Suspension and Debarment
Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred.
"Covered transactions" include those procurement contracts for goods and services awarded under a grant or cooperative agreement that are expected to equal or exceed $25,000 or meet certain other specified criteria.
The university must verify that the entity is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity.
Program income is gross income received that is directly generated by the federally funded project during the grant period. Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired with grant funds, the sale of commodities or items fabricated under a grant agreement, and payments of principal and interest on loans made with grant funds.
Program income may be used in one of three methods: deducted from outlays, added to the project budget, or used to meet matching requirements. Unless specified in the Federal awarding agency regulations or the terms and conditions of the award, program income shall be deducted from program outlays.
Real Property Acquisition and Relocation Assistance
The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, (URA) provides for uniform and equitable treatment of persons displaced by federally-assisted programs from their homes, businesses, or farms.
Federal requirements govern property appraisals, the determination of payments for replacement housing assistance, rental assistance, and down payment assistance for individuals displaced by federally funded projects. The regulations also cover the payment of moving-related expenses and reestablishment expenses incurred by displaced businesses and farm operations.
Each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency.
The standard financial reporting forms include the Financial Status Report (FSR), the Request for Advance or Reimbursement, the Outlay Report and Request for Reimbursement for Construction Programs, the Federal Cash Transactions Report and the Federal Financial Report.
Recipients shall submit performance reports at least annually but not more frequently than quarterly. These reports generally include a comparison of actual accomplishments with the goals and objectives established for the period, reasons why established goals were not met, if appropriate, and other pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
Special reporting rules apply to American Recovery and Reinvestment Act (ARRA) funds.
As a direct recipient of Federal funds you may collaborate with another entity considered a subrecipient and provide funds to them for services, etc. In this case, the direct recipient is considered a pass-through entity and is responsible for monitoring the spending of award funds by the subrecipient.
On the other hand, you may be a subrecipient and the pass-through entity will be monitoring your activities and spending.
A pass-through entity is responsible for:
Award Identification - At the time of the award, identifying to the subrecipient the Federal award information (i.e., CFDA title and number; award name and number; if the award is research and development; and name of Federal awarding agency) and applicable compliance requirements.
During-the-Award Monitoring - Monitoring the subrecipient's use of Federal awards through reporting, site visits, regular contact, or other means to provide reasonable assurance that the subrecipient administers Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
Subrecipient Audits - (1) Ensuring that subrecipients expending $500,000 or more in Federal awards during the subrecipient's fiscal year have met the audit requirements of OMB Circular A-133(link is external) and that the required audits are completed within 9 months of the end of the subrecipient's audit period; (2) issuing a management decision on audit findings within 6 months after receipt of the subrecipient's audit report; and (3) ensuring that the subrecipient takes timely and appropriate corrective action on all audit findings.
Ensuring Accountability of For-Profit Subrecipients - Pass-through entities are responsible for establishing requirements, as needed, to ensure for-profit subrecipient accountability for the use of funds.
Pass-Through Entity Impact - Evaluating the impact of subrecipient activities on the pass-through entity's ability to comply with applicable Federal regulations.
Central Contractor Registration - Identifying to first-tier subrecipients the requirement to register in the Central Contractor Registration, including obtaining a Dun and Bradstreet Data Universal Numbering System (DUNS) number, and maintain the currency of that information.
Special Tests and Provisions
The specific requirements for Special Tests and Provisions are unique to each Federal program and are found in the laws, regulations, and the provisions of contract or grant agreements pertaining to the program.
For ARRA funds, three special tests and provisions apply, including requirements to separately account for ARRA funds, to clearly distinguish ARRA funding in A-133 and Federal audit clearinghouse reports, and to separately identify subrecipients of ARRA funds (and ensure that these funds are properly identified in their A-133 and Federal clearinghouse reports).
Fiscal Activities of a Federal Grant Manager
The list of topics below represents the various types of fiscal activities of a Federal Grant Manager.
Review Award Documents
If at all possible, review the grant proposal before it is submitted. Once the grant is awarded, be sure the anticipated elements are included and that any restrictions are identified. Below is a list of items that may be important to your management of grant funds:
It is possible that your grant will require you to provide cost sharing or matching funds. These requirements are detailed in the grant agreement.
When your grant is approved by the funding agency, you will need to verify that the agency will allow the cost of all activities or purchases you make under the grant.
When in doubt about the allowability of any activity, contact the appropriate Federal agency before incurring the expense.
Human Resource Expenses
Be sure that any necessary salary and other expenses for human resources are permitted on the grant.
Verify that the budget period and project period included in the Grant Agreement are the same as the one you included in your application. The agency may have negotiated a change with you or the Grant award may have been delayed.
Be certain the time indicated is adequate to cover the time you expect to work on the project and that it includes the time during which you may have incurred costs before the agency awarded the grant.
Terms and Conditions
Your Grant Agreement will likely include three types of Terms and Conditions:
Administrative - Administrative Terms and Conditions involve such things as payment, applicable regulations, statutory requirements and required administrative reports.
Programmatic - Programmatic Terms and Conditions include the timing and content of progress reports, an explanation of substantial involvement for cooperative agreements, and special performance requirements.
High Risk - High Risk Terms and Conditions include things such as requiring reimbursable payment as opposed to advance payments.
Set up Fund in the General Ledger
You will need to set up a separate Fund number in the General Ledger for each grant or award. There is a range of Fund ChartField values (560000-589999) that represent Federal grants and contracts.
Each Fund represents a specific CFDA number based on the associated Federal program.
Do not combine different streams of Federal funding in one GL Fund.
Faculty and staff must follow the approved internal control system in place to adequately manage a Federal Award, including processing award amendments or funding supplements.
Spending must be accurately tracked throughout the life of the grant. This also facilitates compliance with requirements for allowable activities, separation of grant funds, monitoring subrecipients and reporting.
Control requirements should also be established for managing payments.
Expenses must be charged to the correct ChartField Fund and comply with the restrictions of the grant.
Spending Award Funds
Grant funding can be received by either Electronic Funds Transfer (EFT) or through the Department of Treasury's Automated Standard Application for Payments (ASAP). When you accept a grant, you agree to use one of these electronic methods to request and receive payments. You should also ensure subrecipients are only requesting funds for their immediate needs.
As a grant project progresses, you may find that you need more funding in certain budget lines and less in others. Some rebudgeting can occur without involving the funding agency. Other rebudgeting requires agency approval.
Transfers, Adjustments and Overruns
Cost transfers must be timely as required by the A-133 Compliance Supplement. Transfers of costs that are over 90 days old can be very complicated and may have implications for the university to receive Federal awards. Overruns of expenses in excess of the budget specified in the grant agreement must be transferred out on a timely basis to avoid impacting any reporting requirements.
Amendments and Revisions
If it becomes necessary to significantly change your grant/contract activities, you must obtain approval from the agency for the following:
A change in the scope or the objective of the grant project.
A change that requires additional funding.
Pre-award costs incurred more than 90 calendar days prior to award.
Subaward, transfer or contracting out of any work under an award unless included in the Grant Agreement.
Subgrants or subcontracts are issued for collaborative grant activities involving personnel at other institutions. The scope of work and budget for the subgrant are normally provided by the principal investigator (PI). A subgrant does not include purchased goods and services, technical assistance, or contracts which are required to be entered into and administered under the university's Financials system.
The principal investigator is responsible for preparing and submitting all technical reports (progress and final reports) required by the funding agency. This is an important obligation.
The Grant Manager is responsible for the annual and final financial reports, required certifications and other requirements identified in the grant agreement.
Failing to turn in reports on a timely basis can result in the agency delaying or suspending final payments on the grant or contract.
Check your award agreement to be sure you know when reports are due, what information is required, and what format is specified by the agency.
Important! Delays in compliance with the reporting requirements can jeopardize possible future funding from the agency, not just for your department but for other departments at the university as well.
Preparing for Audits
Federal Grant Awards received directly or indirectly from the Federal Government are subject to a rigorous annual reporting and audit process. The principal investigator (PI) is the primary contact for the Federal Auditors.
Be prepared with accurate documentation to support an audit of the activities and expenditures of a grant. An audit may go back several years. Be sure to organize retention of electronic documentation and be knowledgeable about the data archiving process.
Delays or failure to cooperate with the audit process can jeopardize any future funding from the agency, not just for your department but for other departments at the university as well.
Funding agencies will conduct various types of grant and/or contract audits:
Fiscal audits will confirm that GL entries booked for the grant are in balance.
Compliance audits verify that grant money is being spent as planned and that proper procedures are being followed for making the expenditures.
Program audits look at grant administration to see if the project is fulfilling its objectives and scope of work. Program audits are the most far-reaching of all agency audits and can be quite extensive.
All expenditures are subject to audit including these high-risk transactions:
Cost transfers > 90 days after occurrence
Unallowable expenses (alcohol, gifts, etc.)
Office of the Controller Audit Preparation
The Office of the Controller surveys university departments once a year in preparation for the A-133 audit. Departments managing Federal Grant Awards outside of OSP should be prepared for extensive audit testing at fiscal year-end, including:
Verification of the CFDA numbers and expenditure amounts for all Federal Grant Awards managed by the department.
Identification of any money received from the State of Ohio that may have originated as a Federal Grant Award, commonly referred to as "pass-through funding."
Information about the receipt of any non-cash Federal assistance.
Closing out a Grant
Items to consider when approaching the end of the grant:
Closing out Federal Award
Requirements for closing out Federal Awards include record retention and subsequent adjustments. The following actions should be considered prior to project end (90-120 days):
Terminate or move personnel appointments.
Ensure required cost sharing is recorded.
Remind subawardees to submit their final invoices as specified in the subaward.
Resolve open non-personnel commitments.
Determine when subsequent adjustments may be made after an award has closed.
Compare actual accomplishments with the goals and objectives established for the project.
Submit final reports.
Preparing for Final Audit
The Ohio State University is subject to the requirements of the Single Audit Act because it receives more than $500,000 per year of Federal funds.
To prepare for an audit after the end of the grant, you should verify that your records are complete, that you have complied with all Terms and Conditions of your grant, and that you have met the agency's regulatory requirements.
You must keep most records for your agency grant project for three years. However, you must keep records for real property and equipment acquired with Federal funds for 3 years after final disposition or according to the university retention policy (whichever is longer).
Disposing of Equipment
Equipment means tangible nonexpendable personal property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more.
In some cases, the agency provides equipment for use in a grant. If your organization has any agency owned equipment, you must make arrangements to return it to the agency at the end of the project in accordance with the agreement under which the agency transferred the equipment to you.
Generally, you will have used only equipment purchased with grant funds. The title to this equipment vests in your organization. When your project ends, you may continue to use the equipment for the same purpose for which it was acquired as long as it is needed.
To consult with the Office of the Controller on Federal funds managed in the colleges and VP units, contact:
- Tricia Privette at firstname.lastname@example.org or 614-688-3728
- Richelle Alamo at email@example.com or 614-688-4134
Additional guidance on sponsored research administration is available at: http://rf.osu.edu/