TMCC

Grants and Fundraising

Tips for Managing Types of Costs in the Award

Payroll Charges and Effort Reporting

Federal regulations require that the College complete effort reporting for all salary charged to sponsored accounts. Timesheets is the documentation that the College uses to support salary charges.

Effort reporting is the process of confirming that the payroll distribution was reasonable for the employee’s activity in an effort reporting term. In order for effort reporting to work correctly, the employee’s payroll allocation must be correct on the Payroll Action Form or PAF. PI/PDs will know the PAF is set-up correctly when the account’s monthly balance and activity report shows the correct payroll charge.

Key items in effort reporting:

  • Effort is NOT certifying payroll. Effort reporting is the process of confirming that the payroll distribution was appropriate in relation to the employees work activities in a specific reporting term.
  • Effort is a percentage of the employee’s total institutional activities.
  • It confirms to the sponsor that you have met your commitment to work on the project based on the proposal.
  • Effort reporting is not required for employees paid based on hours recorded on timesheets.

Certifiers must verify that the effort is correct prior to certification. Recertifying effort is not possible except in very rare circumstances. If you are not sure the effort is correct, DO NOT CERTIFY THE FORM. Resolve your concerns before completing the report. Employees may face financial and criminal consequences for falsifying effort.

Operating

Sponsoring agencies reimburse the College for office supplies through the Facilities and Administrative (F&A) rate. Therefore, the purchase of office supplies are restricted, however there are exceptions. For example, if the project requires a mail survey, the purchase of envelopes would be allowable because the quantity of envelopes needed exceeds normal business activities.

Travel

Travel can be charged to grant accounts if the personnel are working on the project. There should be an effort report or other payroll documentation that matches the travel expense. In some cases, the sponsor must pre-approve the travel. The PI should work with the Grants Office to obtain the prior approval if required.

Equipment

Federal regulations require that the sponsor approve equipment purchases, either in the proposal or in a special request during the award phase. Under the revised Federal regulations that were revised in December 2013, (2 CFR 200 Uniform Guidiance), purchasing equipment based on a sole source justification is no longer an allowable practice. All equipment purchases over $3,000 must have multiple quotes, irrespective of State of Nevada procurement policy.

Consultant or Vendor Agreements

Consultant or Vendor Agreements must comply with State of Nevada purchasing regulations. It is not allowable to enter into a verbal agreement with a consultant or vendor prior to the fair and open competition process.

After the College issues a contract to the consultant or vendor, the PI is responsible to notify the IA Grants Office if there is an issue with the performance of the consultant or vendor. If the College uses a sponsored account to pay for a consultant or vendor and the work is not satisfactory, the PI/PD should process a JV to move the expense to a non-sponsored account while the performance issue is resolved.

Sub Recipient Awards and Monitoring

When TMCC issues a sub award to another institution, the College has a number of obligations. The College is responsible to ensure the entity is eligible to receive a sub award and has the required mechanisms to ensure compliance with the regulations for allowable costs, personnel, project reporting, and any special terms and conditions of the award. The Grants Office will work with the sub recipient to complete necessary paperwork.

The PI is responsible for the following:

  • Support the administrative process and facilitate professional relationship between the sub recipient and the College;
  • Review and sign all invoices;
  • Ensure that the technical reports from the sub recipient are submitted on time;
  • Review technical reports for appropriateness;
  • Request amendments to the subcontract through IA Grants Office;
  • Confirm that the sub recipient ensures that all compliance is in place and up to date;
  • Bring concerns about project performance, invoicing or use of funds to the immediate attention of the IA Grants Office. Do not approve invoices for payment.

Program Income

Federal regulations define program income as income earned by the College generated by a grant. For example, if the project is to put on a conference, the registration fees paid by the conference attendees are program income.

All principal investigators should plan the use of program income due to a possible impact the program income will have on the scope of work of the award. Federal regulations dictate that the College must manage income revenue in one of three ways, depending on the sponsor’s policies:
Matching Method: The College can use the Program income as cost share.
Additive Method: The College can add the program income to the amount of total project costs.
Deductive Method – The College must deduct the program income to the amount of project costs paid by the sponsor.

Example: A sponsor awards $100,000 for a project. The project generates an income of $30,000.
Matching Method: If the College were required to supply matching funds, e.g., $50,000, the College would now have to provide $20,000.
Additive Method: The total project cost will be $130,000.
Deductive Method: The sponsor will now only fund $70,000 of the project's costs.

The College must use the same cost principles in the management of the program income costs. Expenses that are unallowable on the main project account are also unallowable on the program income account.

Timing of Purchases

Purchases should not occur during the last month of the project unless the PI/PD needs the item to complete the project. Unspent funds belong to the funding agency. Auditors often disallow purchases made during the final weeks, based on the assumption that the PI is simply using up the money. PIs/PDs are encouraged to purchase in a timely manner, and be certain that the purchase is in accordance with the budget as well as being allocable to the project.