RA02 Stewardship of Sponsored Programs

Contents:

PURPOSE:

To establish appropriate policies for the stewardship of sponsored projects, and to identify the roles and responsibilities of all individuals participating in sponsored program administration.

POLICY STATEMENT:

Principal Investigators and others involved in management of sponsored awards are stewards of these awards and are financially accountable for using University resources wisely and executing these responsibilities with integrity. Every employee who conducts transactions that affect University funds must be in compliance with all University policies, applicable laws, regulations, and special restrictions.

RESPONSIBILITIES:

Penn State recognizes that management of sponsored programs is a collaborative effort. All individuals involved in sponsored programs are expected to have read and understood all applicable policies and procedures in the University Policy Manual. This includes policies and guidelines related to Intellectual Property, Research Administration, Research Protections, Safety, and Travel. Below are the responsibilities for each of the positions involved with the management of sponsored programs:

• PRINCIPAL INVESTIGATOR: It is the Principal Investigator's (PI) responsibility to conduct and complete the scientific and scholarly work, submit satisfactory reports, meet the sponsor's application guidelines, oversee all aspects of subawards and subcontracts including the monitoring of the programmatic and financial performance and progress (see RAG80 - Subrecipient Monitoring), and certify that terms and conditions of the award are fully met. The PI is responsible for all financial aspects of the award, including the resolution of unallowable expenditures or over-expenditures. The PI also needs to ensure that all costs are reasonable, allocable, allowable and in compliance with sponsor requirements and regulations (see RA10 - Costing Principles for Sponsored Awards). This includes the confirmation of effort performed on the award, as well as justification of all costs charged to the award as required and part of the original proposal. The PI must also understand and comply with RP06 – Disclosure and Management of Significant Financial Interests.
• ADMINISTRATIVE SUPPORT STAFF: In providing support to the PI, administrative support staff is responsible for ensuring that adequate justification and documentation is provided for all expenditures, including labor costs and transfers.
• DEPARTMENT CHAIR OR BUDGET ADMINISTRATOR: As an academic administrator, the department chair is responsible for the activities in that chair's unit. As related to sponsored projects, the chair is responsible for ensuring that the PI is eligible to apply for funds and that the activity is appropriate and fits within the academic mission of the unit.
• RESEARCH ADMINISTRATOR: In providing administrative support, the Research Administrator is responsible for reviewing sponsor guidelines and working with the PI to submit an accurate and complete proposal. When awarded, a Research Administrator sets up the accounting information for the project and tracks its activity through the closeout of the award. They also assist the PI with rebudgeting and adjustments as required.
• FINANCIAL OFFICER: As the Associate Vice President for Budget and Finance's representative for the area, the Financial Officer is responsible for reviewing and approving of research expenditures to ensure that they are reasonable, allocable, allowable based on Penn State costing policies, and consistently applied. Financial Officers also must ensure that all University policies and procedures are followed.
• OFFICE OF SPONSORED PROGRAMS: The Office of Sponsored Programs is responsible for reviewing grants and contracts, identifying problematic clauses, negotiating acceptable terms and conditions, and implementing special compliance requirements. The Office of Sponsored Programs also reviews proposal submissions to ensure that representations and certifications are accurate and consistent with sponsor guidelines and Penn State policies. At the College of Medicine, this function is supported by the Office of Research Affairs.
• RESEARCH ACCOUNTING: Research Accounting is responsible for grant setup and maintenance, as well as submitting timely and accurate invoices and reports according to the Sponsor's payment terms and conditions.
• RESEARCH PROTECTIONS: The Office for Research Protections is responsible for reviewing projects involving human subjects, animal subjects, radioisotopes, biohazards, and financial conflicts of interest.

COMPLIANCE:

False Claims Act (FCA)

The False Claims Act (FCA) (US Code: 31 USC 3729) makes it a crime for any person or organization to knowingly make a false record or file a false claim with the government for payment. This Act was further expanded through The Fraud Enforcement and Recovery Act of 2009 (FERA) (Public Law 111-21). These and related amendments are applicable to the administration of federally sponsored research, and impose liability on any person who knowingly:

1. submits a false or fraudulent claim for payment,
2. causes such a claim to be submitted for payment,
3. makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim,
4. conspires to get such a claim paid or approved, or
5. makes a false record or statement to conceal or avoid an obligation to pay money to the government.

Those managing federally sponsored awards, especially Principal Investigators, are subject to the False Claims Act and can be criminally prosecuted for mismanagement of federal funds. Therefore, those managing these funds must take responsibility for understanding costing policies and the impact on their specific sponsored awards.

Specific Issues Relating to Allocation of Costs

PIs and others with responsibility for sponsored research need to be aware that:

1. Any costs allocable to a sponsored project may not be shifted to another sponsored project in order to meet deficiencies caused by cost overruns, to avoid restrictions imposed by law or terms of the sponsored project, or for other reasons of convenience, even on a temporary basis. In addition, any costs allocable to activities sponsored by industry, foreign governments, or other sponsors may not be shifted to another sponsored project. PIs must ensure that costs that benefit multiple projects are properly allocated to all projects based on a reasonable allocation method.
2. When managing multiple awards, utmost care must be given to manage each award separately, and not to view the various sponsored awards as one large award pool. Generalized costs allocable to different awards cannot be paid on one award one time and a different award the next time – the costs need to be allocated based on usage or another reasonable method for each incurred transaction. The University's accounting system allows for the allocation of costs to multiple awards at the time of the transaction.

See the Allocable Costs section of RA10 – Costing Principles for Sponsored Awards for additional details.

Reporting Non-Compliance

Anyone involved in sponsored award administration who believes that a non-compliance issue has arisen must contact the Research Administrator, Financial Officer or the Compliance Hotline. PIs and Co-PIs have the primary responsibility for ensuring that all costs charged to the sponsored award are related to the project. The PI should consult with the Research Administrator and/or Financial Officer regarding any questions about costing policies or specific award compliance issues.

FURTHER INFORMATION:

For questions, additional detail, or to request changes to this policy, please contact the Office of the Senior Vice President for Research or the Office of Budget and Finance.

CROSS REFERENCES:

Other Policies may also apply, especially:

RA10 – Costing Principles for Sponsored Awards

RAG80 – Subrecipient Monitoring

RP06 – Disclosure and Management of Significant Financial Interests

Revision History:

• July 11, 2023 - Editorial changes:
  • References to the Corporate Controller changed to the Associate Vice President for Budget and Finance
  • References to the Office of the Corporate Controller changed to the Office of Budget and Finance
• July 21, 2020 - Updated description of Research Accounting's responsibilities
• September 18, 2019 - Changed Vice President for Research to Senior Vice President for Research
• February 26, 2016 - This new policy has been created as part of the policy reorganization brought about by implementation of the Uniform Guidance (2 CFR 200).