PI Quick Guide

MAJOR CHANGES IN THE UNIFORM GUIDANCE AFFECTING

PROPOSAL BUDGETS AND CHARGING OF DIRECT COSTS

The Office of Management and Budget (OMB) has combined many federal circulars into a single guidance document (known as Uniform Guidance, or 2 CFR 200) that can be used by all agencies.  The 2 CFR 200 Uniform Guidance regulations became effective December 26, 2014.

CHARGING ADMINISTRATIVE/CLERICAL SALARY COSTS

Applicable Uniform Guidance (UG) Section:200.413

Administrative and clerical salaries, in certain circumstances, can be included on proposal budgets.  

Administrative and Clerical Salaries

In general, administrative and clerical salaries should not be direct charged to sponsored projects or activities, but the rules governing “major project or activity” exceptions have been replaced by the following criteria, all of which must be met:

  1. Administrative or clerical services are integral* to a project or activity;
  2. Individuals involved can be specifically identified with the project or activity;
  3. Such costs are explicitly included in the budget or have the prior written approval of the awarding agency; and
  4. The costs are not also recovered as indirect costs.

If all of these requirements are met, PIs/departments should add a new justification statement to proposals to facilitate the required agency approval.

 *Michigan Tech has determined that integral means: (1) the services are essential, vital, or fundamental to the project or activity; AND (2) a minimum of 10% FTE is budgeted in the project’s budget year or there are documented special circumstances.

COMPUTING DEVICES (UNDER $5,000 UNIT COST)

 

Applicable UG Section:

200.453

 

 

Computing devices can be included on proposal budgets.

Computing Devices

Computing devices under $5,000/unit may be direct charged to sponsored projects or activities if the devices are essential and allocable. Computing devices will be considered essential and allocable when the following criteria are met:

  1. The computing devices are necessary to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information;
  2. The project does not have reasonable access to other devices or equipment that can achieve the same purpose; devices may not be purchased for reasons of convenience or preference.

CONFLICT OF INTEREST

Applicable UG Section:

Information forthcoming

COST PRINCIPLES

Applicable UG Sections:

200.400 – 200.475

Section 200.407 Prior Written Approval (prior approval):

Certain items of cost specifically require prior approval and will affect the allowability of that element of cost if not received by the awarding agency as described in this section.

Reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute of costs, Michigan Tech may seek prior written approval from the awarding agency in advance of the occurrence of special or unusual costs.

Section 200.421 – 200.475 General Provisions for Selected Items of Cost:

Some changes were made in the allowability of certain items of cost. For a full listing of allowable direct costs, refer to the Allowable/Unallowable Cost Matrix located at the following Michigan Tech website link:

http://www.mtu.edu/research/administration/sponsored-programs/office/proposal-preparation/develop-budget/direct-cost/allowable-costs/

 

DEPENDENT CARE

Applicable UG Section:

200.474

Temporary dependent care costs above and beyond regular costs can be included on proposal budgets.

Dependent Care

Temporary dependent care costs above and beyond regular dependent care that directly results from travel to conferences can be direct charged to sponsored projects or activities provided that:

       1. Costs are a direct result of the individual’s travel for the award

       2. Costs are consistent with the unversity’s documented travel policy for all travel

       3. Costs are only temporary during the travel period

Michigan Tech Dependent Care Program

MODIFIED TOTAL DIRECT COST (MTDC)

Applicable UG Section:

200.68

The definition of Modified Total Direct Cost (MTDC) has been updated to add participant support costs to the list of items excluded from MTDC. MTDC is the direct costs charged to a sponsored project excluding equipment, tuition, participant support costs, and subcontracts greater than $25,000. 

PARTICIPANT SUPPORT COSTS

Applicable UG Sections:

200.75

200.308

200.456

Participant support costs can be included for agency approval on competitive proposal budgets.

After UG implementation, participant support costs (see 200.75) are considered exempt from F&A and are allowable with agency prior approval. This includes stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects. Participant support costs are not routinely allowed on research projects but can be charged if the project includes an education or outreach component and the agency approves such costs.

These costs should be explicitly listed in the proposal budget or approved by the funding agency after the award has been made.

For an awarded project, the transfer of funds budgeted for participant support costs to other categories of expenses requires prior agency approval.

POST-AWARD

Applicable UG Sections:

200.300-200.345

Cost Sharing or Matching, Section: 200.306

In-kind documentation from a third party organization for services of an employee must now be valued at and include all of the following:

  1. The employee’s regular rate of pay,
  2. An amount of fringe benefits that is reasonable, necessary, allocable, and otherwise allowable, and
  3. The third-party organization’s approved federally negotiated indirect cost rate, or, if one does not exist, the de minimis rate of 10% of modified total direct costs.

Retention Requirement for Records, Section: 200.333

In the rare case when there is a requirement for Michigan Tech to report program income that is earned after the performance period of an award, the 3 year retention period for the records pertaining to the earning of the program income starts on the first day of the following fiscal year in which the program income was earned.

Methods of Collection, Transmission and Storage of Information, Section: 200.335

Whenever practicable, Federal award-related information should be collected, transmitted, and stored in open and machine readable formats rather than in closed formats or on paper.

  • This section is referencing administrative Federal award-related information. Federal award-related information consists of financial records, supporting documents, statistical records, and any other records pertinent to the Federal award.
  • A machine readable format is a format in a standard computer language (not English text) that can be read automatically by a web browser or computer system.
If original records are paper, electronic versions may be substituted, as long as they are subject to periodic quality reviews to ensure the information has not been altered and that it remains readable.

PRE-AWARD

Applicable UG Sections:

200.200-200.211

200.458

Pre-Federal Funding Opportunity/Award Requirements:

 

  • Funding opportunities will generally be made available for application for at least 60 calendar days. An availability period of less than 60 days may be determined if exigent circumstances exist.
  • Federal awarding agencies must design and execute a merit review process for applications and that process must be described in the funding opportunity.
  • Federal awarding agencies must have a framework in place for evaluating risk posed by an applicant and depending on that result, may impose additional specific award conditions (more detailed financial reports, additional project monitoring, additional prior approval requirements, etc.).
Pre-award costs are allowable only with the written approval of the Federal awarding agency.

PROCUREMENT/PURCHASING

 

Applicable UG Section:

Information forthcoming

PROGRAM INCOME

Applicable UG Section:

200.307

Income may be earned on activities supported by sponsored projects to defray program costs where appropriate.

Program Income

Federal sponsors may specify in their regulations and/or terms and conditions of an award that program income may be used in one of the following three ways:

  1. Program income will be deducted from the total project costs, and the Federal share of the total project costs will be reduced by any excess program income earned;
  2. Program income will be added to the Federal funds awarded and may be used for the purposes and under the conditions of the award;
  3. Program income may be used to meet the cost sharing requirement of the award.


If the awarding agency does not specify how program income must be used in its regulations or the terms and conditions of the award, the program income will be added to the Federal funds awarded to be used for the purposes and under the terms and conditions of the award once prior approval has been granted by the awarding agency.

SUBAWARDS

Applicable UG Sections:

200.331

200.332

Subrecipient and contractor determinations must be documented.

The Sponsored Programs Office will work with the PI in determining and documenting whether an entity receiving funds should be in the role of subrecipient or contractor.

The subrecipient’s negotiated F&A rate or an alternative rate as described below must be used for all subawards included on proposal budgets.

If a federal program has a published statutory F&A cap, that rate must be used both by Michigan Tech and all of its subrecipients.  For all other federal programs, if a subrecipient has a federally negotiated F&A rate, it must be used.  If the entity does not have a negotiated F&A rate, a 10% de minimus F&A rate must be used instead.  There is no change to Michigan Tech’s recovery of its own F&A – this remains limited to receiving our F&A on the first $25K of each subaward.

Agency prior approval is required to enter into fixed price subawards, which may not exceed $150K.

Agency prior approval is required to enter into a fixed price  subaward rather than a cost-reimbursement subaward, and the total value of each fixed price subaward may not exceed $150K.