Faculty Frequently Asked Questions
What is the difference between a grant, cooperative agreement and a contract?
- A Grant: The purpose is to transfer money, property, services, or anything of value to a recipient in order to accomplish a public purpose. The sponsor allows more freedom and less oversight with a grant.
- A Contract: The purpose is procurement; to acquire property or services (deliverables) for direct benefit or use of the sponsor. A contract allows the sponsor to define the terms of the sponsored agreement.
- A Cooperative Agreement: The purpose is to transfer funds to the recipient to accomplish a public purpose. These awards are characterized by substantially more collaboration and involvement between the sponsor and recipient.
Do I need approvals before I submit a grant?
- Yes. Your chair and dean or unit supervisor, as well as RSP will review and approve the summary proposal and budget. RSP will help you conform the proposal to the agency’s requirements, and submit it to increase your chances of funding. If the grant is awarded, it will be awarded to Western Washington University. The federal government defines a grant recipient as an “organization” and not an individual (see 2 CFR Part 215/OMB A-110, Definitions: Recipient)
Why can’t I submit and sign sponsored agreements if I am the Project Director/Principal Investigator?
- Only the Vice Provost for Research is an authorized organizational representative (AOR); authorized to submit and sign sponsored agreements for the university.
What are direct costs?
- Direct Costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. (OMB A-21.D.1) Those costs must be reasonable, allocable, treated consistently, listed in the budget and justification, and approved by the agency.
- The most common examples of direct costs are salary, wages and fringe.
- In accordance with Circular A-21, most federal awards may not charge as direct costs the salaries of administrative and clerical staff and items such as office supplies, postage, local telephone costs and memberships.
What are some typical allowable and unallowable costs?
- These costs are defined in 2 CFR 220 (OMB Circular A-21). This circular states, that the total cost of a sponsored agreement is comprised of allowable direct costs, plus allowable F&A costs. The tests of allowability are:
- Costs must be reasonable
- Costs must be allocable (assignable) to the sponsored agreement
- Costs must be given consistent treatment by the institution. You may not designate a cost as a direct cost on one sponsored agreement and then designate the same cost as an indirect cost on another agreement.
- Costs must conform to any limitations or exclusions set forth in A-21 or in the sponsored agreement as to the types or amounts of cost items.
- The following are items listed as Unallowable in Section J of A-21
- Advertising, Public Relations
- Alcoholic Beverages
- Alumni Activities
- Bad Debts
- Certain Legal Costs
- Charitable Contributions
- Fines and Penalties
- First Class Air Travel
- Fund Raising, Investment Management
- Goods and Services for Personal Use
- Housing of Officers
- Interest Expense for Operating Purposes
- Lobbying Costs
- Losses on Sponsored Research Agreements
- Memberships in Civil, Community and Social Organizations
- Selling and Marketing Costs
- Telephone Line Costs
- Other items of cost may be Unallowable depending on the circumstances. Please speak with Research & Sponsored Programs (RSP) if you have questions.
- If an Unallowable cost is charged to a sponsored agreement, RSP will complete a cost transfer, moving the charge off the sponsored agreement account.
If I get a grant, can I use some of the funds for extra income?
- Charges for salary may not “exceed the proportionate share of the base salary for that period.” (A-21 J-10, d.1)
- Faculty may work on a grant during the summer and collect up to 3 months of your salary during that time if it is approved by the funding agency.
- Salary and wage increases on sponsored agreements (grants) must conform to the practices and policies of the institution.
- If you believe that you have a justified exception to the role governing overload pay, consult your faculty bargaining agreement and the RSP office.
Can I buy a computer with grant funds?
- A computer may be purchased with grant funds when it meets the standard for a direct cost. It must be reasonable, allocable, listed in the budget and budget justification, consistently treated and approved by the sponsor.
- If the computer meets the criteria above, the purchase is allowable, if the computer will be used solely to support the sponsored agreement. Grant funds may not be used to purchase general purpose computers.
- The F&A negotiations with the federal government includes equipment, supplies, and campus facilities that are donated by WWU to support grant projects. Campus (general use) computers are on the list of supplies and non-capital equipment that WWU donates to sponsored agreements. Therefore, general use computers cannot be purchased with grant funds.
What are facilities and administrative (F&A), indirect, or overhead costs?
- F&A, indirect or overhead are used interchangeably and mean the same thing. They are expenses that WWU incurs to support the institution’s major, mission-related activities, primarily identified as instruction, organized research, and public service. They are the real costs of managing sponsored agreements. Direct costs + Indirect costs = Total costs of the project.
- The federal government defines F&A costs as those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project an instructional activity, or any other institutional activity. (OMB A-21.E.1) "Administration" is defined as general administration and general expenses, departmental administration, sponsored projects administration, student administration and services, and all other types of expenditures not listed specifically under one of the subcategories of Facilities. Examples of facilities costs are water, electric, natural gas, custodial, interest on debt associated with certain buildings, equipment and capital improvements, operation and maintenance expenses, and library expenses.
- Western Washington submits an F&A application to the federal Department of Health and Human Services every 4-5 years; the indirect cost negotiation agreement. The agency examines all the supporting documentation and determines what the F&A rate for WWU will be.
- Federal agencies will use the negotiated rates for F&A costs in effect at the time of the initial award, throughout the life of the sponsored agreement. (OMB A-21 G7)
- Theoretically all sponsored projects will pay a fair share of the institution's F&A costs by paying the negotiated rate. This does not always happen. All too often sponsors do not pay the full F&A rate. The shortfall of reimbursement must be absorbed by the institution using other resources.
What are the restrictions on cost share?
- OMB Circular A-110 (2 CFR part 215), Section 23 addresses cost sharing requirements. All contributions, including cash and third party in-kind, shall be accepted as part of the recipient’s cost sharing or matching when such contributions meet all of the following criteria:
- Are verifiable from recipient’s records
- Are not included as contributions for any other federally-assisted project or program
- Are necessary and reasonable for proper and efficient accomplishment project or program objectives.
- Are allowable under the applicable cost principles.
- Are not paid by the Federal Government under another award.
- Are provided for in the approved budget when required by the Federal awarding agency.
- Conform to the other provisions of OMB A-110
- Unrecovered indirect costs may be included as part of cost sharing only with the prior approval of the Federal awarding agency.
- All persons who work on a federal grant project, whether they are paid or not, must document the distribution of charges for personal services; and reflect categories of activities as a percentage (not hourly) distribution of total activities.
What is committed effort?
- It is one method of cost sharing or providing match.
- Mandatory cost sharing or match is cost sharing that is required by legislation or sponsor policy requirements. It is necessary to track mandatory cost share effort using the institution's effort certification system.
- Voluntary committed cost share or match is not required by the sponsor but offered by the institution. Grant recipients are required to document or verify committed effort using the effort certification system.
- Voluntary uncommitted cost share or match, are contributions to the project in addition to that which is budgeted and committed in a sponsored agreement. Uncommitted cost sharing need not be tracked or accounted for by the university effort certification system.
What is effort certification or effort reporting?
- Effort certification/reporting is the mechanism used to confirm that salaries and wages charged to each federally sponsored agreement are reasonable in relation to the actual work performed. Certification of an effort report (or personal activity report) must reasonably reflect the activity for which an employee is compensated by the institution.
- Cost sharing commitments must also be confirmed either through the effort report or through some other reporting mechanism.
- Effort reporting is a requirement for all federal government grants. (OMB A-110 J-10, (2) c.(1).
- Mandatory cost sharing or match is cost sharing that is required by legislation or sponsor policy requirements. It is necessary to track cost share effort using the institution's effort certification system.
- Voluntary committed cost share or match is not required by the sponsor but offered by the institution. Grant recipients are required to document or verify committed effort.
- Voluntary uncommitted cost share or match, are contributions to the project over and above that which is budgeted and committed in a sponsored agreement. OMB Clarification issued January 2001 indicates that uncommitted cost sharing need not be tracked or accounted for.
Who has to complete effort reports and how do you do it?
- Any person paid or who has voluntarily committed effort to a federal sponsored agreement, must certify that the salary paid (or the commitment made) is reasonable in relation to the effort or activity devoted to the award. The individual faculty or staff member may report her own effort, or “a responsible person with/using suitable means of verification that the work was performed” may report for that individual.
- When effort is less than the salaries and wages charged to a sponsored agreement or less than the effort commitments, additional actions such as a salary reallocation or cost transfer may be necessary.
- What is a budget period?
- The interval of time, usually 12 months, into which the project period is divided for budgetary and funding purposes.
What is a project period?
- The total time for which support of a project has been programmatically approved. A project period may consist of one or more budget periods.
What is the difference between a Principal Investigator and Project Director?
- They are synonymous. A principal investigator (PI) manages a grant funded research project (investigates a hypothesis), and a project director manages a grant funded program (such as an TRiO, Upward Bound). The two terms are often used interchangeably.
What is a consultant?
- An independent contractor hired to provide professional advice or services for a fee, normally never an employee of the hiring institution.
What is a subaward, subcontract, subcontractor?
- Subawards are issued from prime grant awards. Subcontracts are issued from prime contracts. A subcontract or subaward is a sub recipient agreement. Subcontracts/sub awards/sub recipient agreements are issued under prime contracts, agreements, purchase orders, or grants for the procurement of purchased program-related tasks.
- Issuance of Subaward agreements under a federal prime award must be compliant with federal law and they are subject to the terms and conditions of the prime award and normal purchasing requirements of WWU.
What is capital equipment?
- Capital equipment is tangible property having a useful life of one year or more and an acquisition cost of $5,000 or more per unit. All equipment meeting this definition should be recorded on the College/Department equipment inventory and tagged with a control number.
- The net invoice price of the equipment including the cost of the modifications attachments, accessories, or auxiliary apparatus necessary to make the equipment operable is the acquisition cost. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, should be included to determine the actual acquisition cost.
Are personal computers regarded as capital equipment?
- If the computer system package is valued at $5,000 or more it is regarded as capital equipment and listed on the equipment inventory. PC system packages consist of a central processing (CPU), system software, and all accessories necessary to make the property operable. The value of the computer monitors purchased with the PC system should be capitalized as part of the PC system. Monitors purchased as replacements or upgrades or existing systems usually cost less than $5,000 and are not regarded as equipment.
- Software. Software is intangible property and is usually not considered capital equipment. Major software systems valued at $25,000 or more may be capitalized for financial statement purposes.
- Who completes financial reports on sponsored agreements?
- RSP completes and submits the financial reports.