Quick Guide to Contract and Grant Fiscal Administration

Fiscal Administration

Fiscal management of grants, contracts, and other funding agreements is the responsibility of the principal investigator (PI) or project director (PD) and the administering department or organized research unit (ORU). The Sponsored Projects Office can provide liaison services with funding agencies.

The Award

The award document is the funding agency’s official obligation of funds for a project. Many awards cover a multi-year project period made up of several shorter (usually 12-month) budget periods. Funds often are awarded in budget period installments. Contract and grant terminology also includes common designations for a series of awards:

A new award is the original award of funds.
A continuation award obligates funds for a subsequent budget period within an existing project period.
A supplement adds funding to an existing budget period for additional work or costs not anticipated in the original proposal or award.
A renewal or competing continuation award provides funds for the extension of a project beyond the original project period.

Expenditures

The office of record for expenditures is Financial Accounting & Controls. Upon receiving a fully signed and executed award from the Sponsored Projects Office, Contracts and Grants Accounting establishes an account and fund number for the project, and the administering department or ORU charges all costs to this number under the direction of the PI or PD. The budget for expending funds is allocated to sub-budget categories based on amounts in the proposal budget agreed to by the University and the funding agency. Detailed information about the system of account codes is available in the UC Accounting Manual.

Fund Advance/Pre-Award Costs

If the award document is delayed but the agency’s decision to fund can be confirmed, the PI or PD may ask the Sponsored Projects Office to approve an advance expenditure authorization (fund advance). A fund advance directs Financial and Business Services to set up an account before the award document arrives and allows pre-award costs to be incurred before the start date. Some federal agencies routinely allow up to 90 days of pre-award costs. The request form for an advance is available on the SPO website.

Cost Sharing and Matching

Some funding agencies require the grantee institution to demonstrate its financial commitment to the project, or the commitment of other funding sources, by sharing the project costs. Cost-sharing funds may come from an outside source in the form of cash contributions, volunteer services, or donated property; from the University’s own funds (e.g., personnel effort without salary recovery); or from shared resources or facilities. If the award is federal, only acceptable non-federal costs qualify as cost sharing.

Matching funds, if required by the funding agency, are raised from non-federal outside sources to increase the level of support provided by the funding agency. Such funds must be identified by the donor or funding source for use as matching funds.

Changes in PI Effort

Many sponsors (federal as well as non-federal) require that they be notified and/or give prior approval before a PI changes his or her effort on a sponsored project. Some sponsors also apply the same requirements to other key personnel named in the project. A change of effort may be the result of a temporary or long term absence from the project or a reduction in the percent of time an individual planned to spend on a project (as described in the proposal). PIs always should review the terms and conditions of their award/s to determine if the sponsor requires notification and/or prior approval of such changes in effort. If so, all notifications and requests for approval should be submitted officially through the Sponsored Projects Office. PIs should consult their SPO Contract and Grant Officer for additional guidance on these matters.

For more information, see Introduction to Effort Reporting for UC Berkeley Faculty, Reduction in PI/Co-PI Effort, and PI Changes in Affiliation and Absences from a Sponsored Project.

Rebudgeting Award Funds

Rebudgeting, or changing the way award funds are spent, may require prior approval by the funding agency. Approval to rebudget, if required, must be requested of the agency in writing with the countersignature of the Sponsored Projects Office.

Federal agencies participating in the Federal Demonstration Partnership (FDP) allow rebudgeting among most funding categories without prior approval. The award document and Sponsored Projects Office staff can help interpret whether agency permission is needed to rebudget. Special care must be taken when rebudgeting amounts into or out of the equipment category, as that category bears no indirect costs in many agreements.

Carrying Forward Unobligated Funds

Some funding agencies allow unobligated funds from one budget period to be carried forward into the next budget period. Often, the PI or PD must ask the funding agency’s permission; however, federal agencies participating in FDP allow grantees to carry balances forward without prior approval.

No-Cost Extensions

If the project is not completed and awarded funds remain unspent towards the end of a project period, many funding agencies will allow the PI or PD to request more time to complete the work while spending remaining funds. A no-cost extension is an extension of the project period without additional funding. Often a no-cost extension must be requested of the funding agency in writing, with SPO countersignature, well before the existing project period end date. FDP agencies allow the institution to approve a single no-cost extension without prior approval but still require written notification.

Closeouts and Cost Transfers

Financial Operations prepares monthly and final expenditure reports that must be reconciled by the administering department or ORU. After-the-fact cost transfers must be properly documented. Financial and Operations provides guidance on reconciling accounts and transferring costs. Most funding agencies require a final financial report from Financial Operations within 90 days of project termination. See Sponsored Project Closeout for more information.

Federal Demonstration Partnership / Research Terms and Conditions

The Federal-Wide Research Terms and Conditions (RTCs) were developed from an initiative by the Federal Demonstration Partnership (FDP), an association of federal agencies, academic research institutions, and research policy organizations that works to streamline the administration of federally sponsored research. When the Uniform Guidance was issued in 2013, work began to update the RTCs to implement the Uniform Guidance. In March 2017, revised RTCs were issued, with participating agencies implementing the RTCs with agency-specific requirements at different dates in 2017.

See Research Terms and Conditions for guidance, links to each participating federal agency’s specific Research Terms and Conditions, and a Prior Approval Matrix that can be used to identify how different federal agencies have implemented the RTCs.

Participating agencies:

Department of Agriculture / National Institute of Food and Agriculture
Department of Commerce
Department of Energy
Department of Health and Human Services / National Institutes of Health
Department of Homeland Security
Department of Transportation
Environmental Protection Agency
National Aeronautics and Space Administration
National Science Foundation