Initial Grant Set-Up

Grants & Contracts

• Procedures for Financial Management of Awards and Restricted Funds
• Expenditure Processing
• Principal Invesitgator's Responsibility
• Grants & Contracts Accounting Responsibility
• Non-Personal Expenditures of $500 or more
• Personal Expenditures
• Cost Sharing (matching)
• General Administration
• Closing of the Aponsored Agreement
• Glossary of Terms

Procedures for Financial Management of Awards and Restricted Funds

The official Announcement of Grant Award in the Grants & Contracts Accounting Office is received from the Office of Sponsored Programs.

The Grants & Contracts Accounting Office will send the principal investigator post-award information, including the newly assigned restricted funds sponsored agreement (grant/contract) Department (deptid) number. Expenditures may not be made until this number has been assigned. (Pre-award costs are allowable by some sponsors prior to the effective date of the award. The Grants & Contracts Accounting Office will approve spending prior to receipt of a fully executed award document only if the principal investigator and academic unit's responsible person guarantee covering the expenses if the award is not funded. That guarantee must be in writing and must identify the source of funds providing the guarantee.)

The following information is enclosed:

• Signature cards — These need to be signed by all personnel who will be approving expenditures on the sponsored agreement, as well as the appropriate dean or department head.
  
  
• Access form — This form should be completed with all personnel logons of those who need to monitor the grant on the Peoplesoft Financial system. Anyone included on this form who has not attended a training session on the Peoplesoft Financial system will be given access upon completion of the required training. These persons will be contacted by the Security Coordinator from Accounting Services regarding the next available training session.
  
  
• Internal Budget — The Grants & Contracts Accounting staff will enter the budget according to the control and specified expenditures as written in the signed award document. All sources of required cost sharing (matching) must be identified on the internal budget form. If the principal investigator agrees with the budget and cost sharing data as shown, the top three approval lines on the form need to be signed. If any changes need to be made to the budget, the principal investigator must notify the Grants & Contracts Accounting office.
  
  

Each of the documents above should be returned directly to the Grants & Contracts Accounting Office at MSC 5713 upon Completion!

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Expenditure Processing

General Guidelines:

• Costs must occur within the period of the award. Procurement documents and requests for payment must include dates in the award period.
  
  
• Costs must be allowable according to University policy.
  
  
• Costs must be reasonable in that the price of the goods or services must be prudent.
  
  

All documents relating to payroll expenditures, travel reimbursement, equipment, subcontracts and Non-Personal Services (NPS) expenses of $500 or more on sponsored agreement accounts MUST be approved by the Grants & Contracts Accounting Office prior to processing by Human Resources, Procurement, or Accounts Payable.

Procedures for processing and monitoring Non-Personal Services (NPS) expenditures less than $500 are detailed below:

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Principal Investigator's responsibility:

• The PI prepares transactions according to JMU Policy and Procedures for procurement.
  
  
• Invoices are submitted directly to Accounts Payable for payment. If the invoice does not pass budget-check due to insufficient funds in the account code charged, Accounts Payable will route the invoice to the Grants & Contracts Accounting Office.
  
  

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Grants & Contracts Accounting responsibility:

• Non Personal Services (NPS) balances will be reviewed on a regular basis by the Grants & Contracts Accounting staff.
  
  
• No action will be taken if the posted charges are allowable.
  
  
• Upon identification of a possible unallowable charge, the PI will be contacted for resolution. If the charge is deemed unallowable, the PI and/or department head will be responsible for identifying an alternative source of funding for the charge within (5) business days and the charge will be transferred from the grant account. If an alternative source of funding is not properly identified, the appropriate department/dean's Indirect Cost Recovery budget will absorb the transferred charge.
  
  

Procedures for processing and monitoring ALL payroll, travel, equipment, and sub-contract expenditures, in addition to ALL Non-Personal Services (NPS) expenditures for $500 or more, are detailed below:

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Non-Personal Expenditures of $500 or more:

• Must be reviewed and approved by the Grants & Contracts Accounting Office. Note: If guidance is needed in completion of forms, a Financial Procedures Manual is located in the department head's office or you may refer to the Financial Procedures Manual online.
  
  
• Indirect cost charges will be processed by the Grants & Contracts Accounting Office, per the Federal Indirect Cost Rate and/or award agreement, on a monthly basis. (Current allocations of indirect cost recovery revenue is as follows: 30% to the University, 10% to Deans, 40% to Departments, and 20% to administrative support for the Grants & Contracts Accounting function.)
  
  
• Equipment purchased with grant/contract funds will be decaled in accordance with standard university procedure and entered into the university fixed asset system.
  
  

  Note: Disposal of equipment purchased with grant funds must be in accordance with the grant award agreement and Virginia state law. The PI should contact the Grants & Contracts Accounting office before proceeding with a disposal. If the PI leaves James Madison University, the department head becomes responsible for following the appropriate disposal process.

  
  
• Consult the Financial Procedures manual or the university homepage for the current travel regulations from the state. Unless there are specific exceptions stated in the award document, travel must follow state regulations.
  
  
• Tuition payments/reimbursements for students, paid with grant/contract funds, must be made only for semester dates that are within the award period actually funded by the grant/contract.
  
  
• Expenditures for legal services are NOT ALLOWABLE unless PRIOR written approval of the Attorney General's Office is received. The university liaison with the Attorney General's Office is the Assistant Vice President for Finance.
  
  

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Personal expenditures:

• All JMU employees paid from a sponsored agreement need a par form or student employment form designating the sponsored agreement department id # (deptid) as the pay source. Par forms and instructions for completing the par form are available from Human Resources. Prior to submission to HR, par forms require approval by the Office of Academic Affairs and then approval by the Grants & Contracts Accounting Office. (Payroll cutoff dates for submission of PARS, contracts and timesheets are posted on the Payroll website.)
  
  
• If there is a question as to whether a person is an employee or consultant, a twenty-question form is available from the Grants & Contracts Accounting Office that provides criteria required to clarify the situation. Alternatively, this issue may be addressed in the pre-approval process by making the Sponsored Programs Office aware of possible situations during the pre-award process.
  
  
• Prior to hiring consultants outside the university for above $2,000, the PI must submit a requisition to the Grants & Contracts Accounting office, which will be forwarded to Procurement. If a consultant will be paid $10,000 or more, the PI must justify the consultant as a sole source vendor and allow four weeks for processing. The home address and social security number is necessary for all consultants. This scenario may be brought to the attention of the Office of Sponsored Programs during the pre-approval process for alternative handling.
  
  
• ANY/ALL transactions with a foreign individual need to be reviewed by Dr. Bijan Saadatmand PRIOR to any commitment of funds. IRS regulations and Immigration Naturalization Service's treaties limit such payments based on the foreign national's VISA type.
  
  
• Federal granting agencies require that Effort Reports be completed for each school semester. This requirement also applies to federal flow-through funds administered by state and/or private funding agencies. The Grants & Contracts Accounting office compiles the payroll information and sends the completed forms to the PI for approval and verification by the employee and the PI. Failure to complete/return activity reports is a federal compliance violation and may result in inactivation of the grant/contract department budget until proper documentation is received.
  
  
• If a full-time employee leaves a sponsored agreement project, the PI should initiate a par form indicating the resignation of the employee, so pay will be stopped properly.
  
  

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Cost sharing (matching):

• The Principal Investigator is responsible for documenting cost sharing, both in-kind and in-cash and forwarding a copy of support documents to the Grants & Contracts Accounting Office. Documentation of both types of cost-sharing is very important. As a recipient of both federal and state funds, JMU is subject to federal, state and private audits, which require proof that James Madison University has upheld its portion of a grant/contract.
  
  
• If the matching funds are being transferred from a department, the funds need to be expended within the fiscal year or the funds will be reverted.
  
  

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General Administration:

• The PI should provide the Grants & Contracts Accounting office with all financial forms and rules governing the grant administration and reimbursement if they are not included in the original award agreement
  
  
• The Grants & Contracts Accounting office reviews grant/contract budgets monthly for billing of reimbursable grants. It is advisable to call the Grants & Contracts Accounting office if billing is to be done on a quarterly basis, or after a percentage of work is completed. All invoices are to be submitted to the Grants & Contracts Accounting office. The PI is ultimately responsible for the collection of all outstanding receivables for the grant.
  
  
• Accounting Services sends monthly printouts directly to the PI. (Obtaining access to the Peoplesoft Financial system alleviates the need to rely on the receipt of these hardcopy reports.)
  
  
• Transfers of equipment purchased with grant/contract funds must be authorized within the terms of the award. Actual transfers are not authorized until the JMU RESTRICTED FUNDS — EQUIPMENT TITLE TRANSFER form has been completed and submitted to the Plant Fund Accounting and Grants & Contracts Accounting Offices. This form may be obtained by contacting the Grants & Contracts Accounting Office or the Plant Fund Accounting Office or online from the Accounting Services webpage for forms.
  
  

Note: ALL financial information submitted to a funding agency should first be reviewed by the Grants & Contracts Accounting office. The information should be reconciled to the university accounting system prior to sending the information to the funding agency.

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Closing of the sponsored agreement:

• The financial accounting system will stop processing expenditures after the grant ending date. If the granting agency has extended the sponsored agreement, the Grants & Contracts Accounting office should be provided with written notification from the funding agency.
  
  
• The Grants & Contracts Accounting office will contact the PI in reference to:
  
  
  • Status of the project
  • Outstanding expenditures to be paid before the last reimbursement
  • Preparation of final reports (technical & financial)
  • Completion of cost-share forms
  
  
  
• Requests for extensions should be coordinated with the Office of Sponsored Programs no less than one month prior to the original grant/contract expiration date or as required per the original sponsored agreement.
  
  

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Glossary of terms

• Sponsored Agreement — any grant/contract/agreement extended to JMU from external funding sources.
  
  
• DPO — departmental purchase order
  
  
• Expenditure Account — different categories of expenditures are called accounts in the Peoplesoft accounting system. Example: 121500 = printing expenditure account.
  
  
• Granting Agency — the entity that is funding a grant/contract.
  
  
• In-Cash Cost Sharing — cash that JMU is obligated to spend on a particular grant per the signed agreement. Example: payment for copying, supplies, books required by, but not funded by, the funding agency.
  
  
• In-Kind Cost Sharing — an estimated cost that JMU is obligated to spend on a particular grant/contract per the signed agreement. Example: calculated expense for office space or faculty release time.
  
  
• Indirect Costs — indirect costs are charged based on a negotiated rate that JMU can charge a granting agency.
  
  
• Department ID (deptid) Number — In the finance system, each grant or department will be an individual deptid #. Example: 100026 = Math Department.
  
  
• Peoplesoft — the name of the integrated information system under which the entire university operates.
  
  
• PI — Principal Investigator — the faculty member that directs the grant activity.
  
  
• Revenue account — all funds coming into the university are coded to a revenue account. Example: revenue from a private foundation is coded to 010000.
  
  
• TA — travel authorization — this is required for all overnight travel.
  
  
• NPS — Non-personal services (all services other than personnel costs.)
  
  
• SPO — Sponsored Programs Office
  
  

Link to the Sponsored Programs Office

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