|
Policy for Financial Management of Research Projects | Policy 8.0
Background
The Grants Accountant periodically receives requests for changes among and between budget categories that were approved in the contract and recorded on the project activation form. Flexibility for moving funds between budget categories may or may not be permitted by the funding agency; for example, the following section appeared in a contract with a state agency:
The expenditure of funds made available through this contract must adhere to the line items in the attached budget. The CONTRACTOR may request a budget revision to the contract budget by letter, giving full details supporting such request, and submitting a revised budget summary page in the appropriate form and detail, and such adjustment may not be made without prior written approval of the STATE.
It is recognized that the principal investigator/project director needs flexibility in managing project budgets for optimum utilization of funds. In addition, this flexibility would encourage the appropriate expenditure of all project funds in meeting the project objectives.
Policy
In view of the importance of managing projects within approved budgets, requests for budget changes should, if possible, be anticipated in advance and a determination made (by the Office of Research) if the funding agency must approve the changes. Approval will be based on the request meeting one or more of the following criteria:
State Funds
- If the contract is specific on the issue of moving funds between budget categories, prior approval is to be obtained from the funding agency.
- If the contract is silent, a maximum of ten percent (10%) change from a budget category may be internally requested provided that the justification is given by the principal investigator/ project director. (Although this is a somewhat standard practice, this procedure may not be approved by the state auditors. A sound justification for the change with approval of the principal investigator/project director may preclude receiving an audit finding).
Federal Funds
The financial management of non-defense federal funds on nonconstruction awards may be governed either by OMB Circular A-21, "Principles for Determining Costs Applicable to Grants, Contracts, and Other AGreements with Educational Institutions," OMB Circular A-110, "Grants and Agreements with Institutions of Higher Education, et al.," Federal Acquisition Regulations (FAR), or the Education Department General Administration Regulations (EDGAR). Furthermore, each individual federal agency may have its own contract terms and conditions. In the absence of specific contract requirements, "Subpart C Post-Award Requirements " from OMB Circular A-110 may be helpful for financial management of projects as applied to Tennessee Technological University.
Federal Funds - Special
The Office of Research, working through the National Science Foundation, has established the University's Organizational Prior Approval System (OPAS). This review and approval system allows for certain budget modifications to be handled at the University level.
Other
Non-government funding agencies have their own policies regarding transfer between budget categories; for example, Martin Marietta Energy Systems, Oak Ridge, requires all changes in budget categories to be requested, preferably in advance. If a letter of approval is not on file, then an audit finding most likely will be made.
Implementation
If a change in a budget is requested, the detailed justification is to be sent to the Office of Research. A request for changes in budget categories will be initiated by a letter from the Office of Research to the funding agency's contract division. An effort will be made by the Office of Research to determine any restrictions to changes in the budget at the time the contract is being reviewed for approval.
____________________
Updated
July 25, 2008
|
