Business Services

Account Lifecycle: The Beginning

Session 2

Award Establishment

Policy Training Program for the Lifecycle of an Account

Business Services

Team Members

• Suzanne Bennett, Electrical and Computer Engineering

• Jeanette Greener, Discovery Park

• Christy Haddock, Vice President for Research

• Meagan Kramer, Sponsored Program Services

• Mary Millsaps, Sponsored Program Services

• Helen Moschinger, Sponsored Program Services

• Patty Oswalt, Pharmacy

• Becky White, Sponsored Program Services

Business ServicesCourse Content

• Contracting

• Notice To Proceed (NTP)

• Electronic Award Notices

• Award Set Up

• Examples

• Resources

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Upon completion of this course you will understand:

• The role of the contract analyst and what governs their actions

• The Notice to Proceed (NTP) process

• The importance of electronic award information requests and award notices

• The issues of Award Set Up

Course Objectives

Business ServicesContracting

What is a Contract?

• A Contract is a promise or set of promises to do (or not do) something.

• Creates a legal duty to perform the promise which is enforceable through the courts.

• There are many different names for contracts, all create obligations on the part of the University.

Business ServicesContracting

Types of Contracts: Spectrum of Sponsor Influence

Gifts MOU/MOA Grant Contract(no consideration)

Teaming Agreement Cooperative Agreement

Each represents a “legally binding agreement,” no matter what we call it.

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• Purchasing – University dollars going out (not subcontracts for sponsored projects)– Purchasing Agreements– License Agreements

• SPS/Fed/State Contracting Team – (work closely with the Young and DP PreAward Teams)

– Federal and State of Indiana Contracts/Grants– University Pass-through from the Federal and State of Indiana

• Associated Subcontracts– Miscellaneous agreements

• SPS/Industrial Foundation Group – Contracts with Industry and Non-Profits, regardless of the prime

• Associated Subcontracts– Material Transfer Agreements– Confidential Non-disclosure Agreements

Why are the University Contracting offices organized the way they are?

Business ServicesContracting

Contract Analyst role:

• It is the role of the contract analyst, to ensure that:

– The University can and should meet the obligations as written.

– The contract truly reflects the University’s understanding of the activity.

– Any contract the University enters into is in compliance with Federal and State Law and University Policy.

Business ServicesContracting

Current Strategic Plan Goals

• Launching tomorrow’s leaders (Education of our students)

• Promoting discovery with delivery (Research for the greater good and economic development)

• Meeting global challenges (international collaborations)

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• Statement of Work – Academic Approvals

• Regulatory Approvals

• Budget – Are all costs covered?

• System Assessment – Can we meet the terms as written?

Factors for Consideration

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• The Proposal!!

• Discussions with – PI– Business Office– SPS Post Award– Other central offices impacted

Where does the analyst get this information?

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Contract Analyst’s role:

• It is the role of the contract analyst, to ensure that:

– The University can and should meet the obligations as written.

– The contract truly reflects the University’s understanding of the activity.

– Any contract the University enters into is in compliance with Federal and State Law and University Policy.

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Contracting

• Federal Law– OMB Circulars A-21 and A-110– Federal Acquisition Regulations (FAR)

• State Law– State Disclosure Laws– Conflicts of Interest

• University Policies (Approved by the Board of Trustees)

What governs the terms and conditions the University can accept?

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• Types protected by law– Patents, Copyrights, Trademarks and Trade Secrets

• Other types mentioned in contracts– Information, Data, Know-How

What is Intellectual Property?

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• VIII.4.1 Intellectual Property– Except for Copyrights to Instructional and Scholarly Works, the

University retains ownership of all IP developed by Purdue employees and students involving or relating to the use of University Resources

http://www.purdue.edu/policies/pages/teach_res_outreach/viii.4.1.htm

University’s policy on Intellectual Property

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• Licensing Revenue for PI, Department and University

• Right to Publish– Academic/Scholarly Works

– Student Theses

• Right to pursue related research

What does the ownership of IP impact?

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• Contract Review Board– Director of SPS

– Associate Vice President for Research

– Director of Office of Technology and Commercialization (Office of PRF that licenses Purdue IP)

They determine appropriateness based on the given situation.

What happens if the analyst can’t arrive at a compromise that is within University policies?

Business ServicesContracting – Example Situation

Acme Corp is insisting on owning all data and restricting publication rights.

Who might be involved in resolving this for the University?

Business ServicesContracting – Example Answer

- Contract Analyst

- Principal Investigator

- Industrial Foundation Group Assistant Director

- Contract Review Board

- Department Head or Dean

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• Signature Delegation

• When is Gift not a Gift?

• How can we work together to make the process more efficient?

Other Points of Interest

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• Legal Entity: The Trustees of Purdue University

• Bylaws of the Board of Trustees

• Signature Delegation Authority granted to Executive Vice President and Treasurer and is managed by the Director of Purchasing

• Agreements requiring PI acknowledgement: Confidential Non-Disclosure Agreements and Material Transfer Agreements

Why can’t faculty sign their own contracts?

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Contracting

• Expressed or implied expectation of economic benefit back to the donor (favorable IP terms)

When is a gift not a gift? (IRS determination)

A gift with strings attached – Managed by SPS

• Financial management requirements• Financial reporting requirements• Repayment provisions

Business ServicesContracting – Example Situation

NanoTech Inc. gives Professor Little a gift that comes with an award letter. In the award letter it states that by accepting this gift, Purdue agrees to grant NanoTech the first right to license to any developed IP.

Is this a gift, and how would you handle this award letter?

Business ServicesContracting – Example Answer

- NO!!

- Get award letter to SPS/IFG for review

- Inform PI he may need a proposal

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• DO – Communicate, Communicate, Communicate!!• DO – Ask questions of the PI and contracting office• DO – Involve the appropriate contracting office early & often• DO – Have fiscal information necessary for account set up• KNOW – What resources are available to you

– Standard Contract Templates – available on the SPS website– COEUS Negotiation Record– assigned analyst– spscontr@purdue.edu

How can we work together to effectively navigate through the contracting process?

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Coeus Negotiation Record

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Bottom Line:

Contract and file must stand on its own years after the active participants are no longer

involved.

Business ServicesContracting – Example Situation

• Professor Thomas brings a contract to you and asks you to get it to the appropriate office.

– What questions would you want to ask at this point?

Business ServicesContracting – Example Answer

• Who are the parties involved in the agreement?• What activity is this contract governing?• Is there money involved?• Is this related to an already submitted proposal?

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Resources:

SPS Website - contracting tabhttp://www.purdue.edu/sps

Generic email for sponsored program contracting groups

spscontr@purdue.edu

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Contracting

Questions?

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Notice to Proceed

Notice to Proceed (NTP)

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Notice to Proceed

What is a Notice to Proceed (NTP)?

• A NTP is a line of credit established to allow a project to begin prior to receipt of a fully executed award.

• If the award fails to materialize the liability for expenses is the responsibility of the department or University, depending upon who is financially backing it.

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Notice to Proceed

Why should I request a NTP?

• A NTP must be requested if a PI wants to begin incurring any costs prior to receipt of an award document.

• Eliminates the need for correcting documents as it allows charges that benefit a project to be incurred on that project.

• Eliminates questions that may arise due to cost transfers from general funds or other sponsored projects.

• Assures proper regulatory approvals are in place prior to the start of the research.

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Example Situation

PI Smith brings a purchase request for sheep to the business office.

What questions should you ask?

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Example Answer

The department should ask the following questions:

• Is this department or sponsor research?

• If sponsor research, is there already a sponsored account for this purchase?

• Is there an approved animal protocol for this purchase?

Regardless of the source of funding, if there is not an approved protocol the purchase cannot be made.

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Notice to Proceed

When would SPS authorize a University Backed NTP?

• Before the university will establish a NTP the following must be confirmed by the fiscal office of the sponsor:

– The beginning and ending date of the project

– The award amount

– Confirmation of the estimated receipt date of the fully executed agreement

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Notice to Proceed

When should a Department back a NTP?

• Department must back NTP if fiscal information cannot be confirmed and department wishes to allow expenditures.

• The department is already backing the research if expenses for a project are being incurred on departmental funds.

• Regulatory compliance approvals must be complete prior to establishment of a NTP regardless of the backing.

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Notice to ProceedWhy is it important to run the NTP report monthly?

• Monitoring of the monthly NTP report is needed for the following reasons:

– If the NTP is department backed and all NTP funds have been exhausted or NTP end date has passed, the department will need to assess if they want to continue the NTP. If the decision to not continue the NTP is made all charging to the account must stop.

– If the NTP is University backed, SPS may need to make additional contact with the sponsor to check the status of the award to determine if extending the NTP is appropriate.

– Monitoring the status of the award is important as any expenses incurred while on NTP are the liability of the department or the University.

Business ServicesNotice to Proceed

Resources

NTP Formhttp://www.purdue.edu/sps/pdf/ntp.pdf

Account Management Guidelines for SPS Fundshttp://www.purdue.edu/sps/doc/Account

%20Management%20Guidelines%20for20SPS%20Funds.doc

SPS Staff Directoryhttp://www.purdue.edu/sps/staffDirectory.htm

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Notice to Proceed

Questions?

Business ServicesElectronic Award Information Requests & Notices

Electronic Award Information Requests &

Notices

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Electronic Award Information Requests & Notices

Why is it important to understand electronic award information requests?

• They inform the business office that a proposal has been funded.

• Provide accurate information to SPS based upon PI responses to ensure the award is set up correctly.

– # of internal orders, RCC for each account, Co-PI for each account, budget for each account, credit split if different, AIMS access

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Electronic Award Information Requests & Notices

• Award notice gives key pieces of information regarding the grant.

• Business offices should review the grant to verify accuracy at award setup.

• Award documentation is attached as a reference tool to outline sponsor requirements.

Why is it crucial to understand electronic award notice emails and award documentation?

Business ServicesAward Set Up

Award Set Up

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Award Set Up

What are some possible issues when setting up a new SPS award?

• General sponsor understanding

• Items out of the ordinary

• Reporting requirements

• Cost sharing

• Subcontracts

• Award budget deviations from the proposal

• Regulatory

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Award Set Up

General sponsor understanding

• To determine the budget / spending flexibility (prior approval requirements)

• Restricted costs vary according to sponsors

– Prior approval may need to be obtained before allocating expenses not awarded by the sponsor.

http://www.purdue.edu/sps/accountmgmt/priorapproval/index.html

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Award Set Up

Items out of the ordinary

• Fully review the award to highlight terms that could impact grant management.

– Unique categories (task, projects, sub-project, or programs) and reporting requirements.

– Unusual project periods

– Incremental funding

– Salary restrictions (NIH salary cap, NSF 2/9)

– Specific budgetary restrictions

Business ServicesExample Situation

PI Jones has been awarded a new grant that has five distinct tasks. The sponsor requires financial reporting by task.

How can the grant be established in Purdue’s system to accommodate this requirement?

Business ServicesExample Answer

• Separate internal orders should be established for each task.

• Sponsored program titles can be tailored to help identify each task.

Business ServicesAward Set Up

Reporting Requirements

• Awareness of required reports & responsible party

– SPS

» Fiscal

» MBE/WBE

» Property

– Principal Investigator

» Technical» Invention (in cooperation with OVPR)

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Award Set Up

Cost Sharing• Commitments and account set up can be rather complex.

– Multiple departments, colleges and the OVPR

– Various funds and types

– What was committed (i.e. Salary? Equipment?)

• Cost share accounts should be set up with the same thought process used for the sponsor dollar accounts.

• Multiple areas contributing to one account

Communication and oversight are critical at award setup!

Business ServicesAward Set Up

Subcontracts

• Subcontract negotiations begin after Purdue’s agreement is executed and the account is established.

• Post award will work with the appropriate contracting office to initiate the subcontract process.

• An updated status of the negotiation for subcontracts can be found in the COEUS negotiation module.

Business ServicesExample Situation

A new award has three subcontracts in the budget. Two of the subcontracts were fully executed within the month of the award.

What may be holding up execution of the final subcontract?

Business ServicesExample Answer

• Missing/incomplete budget or statement of work from the subcontractor

• Missing letter of concurrence from the subcontractor’s sponsored programs office (for University subs)

• Pending regulatory approvals from the subcontractor

• Other negotiation issue (terms, payment method, governing law, e.g.)

Business ServicesAward Set Up

Award budget deviations from the proposal

• If award amount is different than proposed amount, SPS will work with business office.

• Change in award amount may impact cost share commitment.

– A revised form 32 will be requested, if needed

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Award Set Up

Regulatory

• Regulatory approvals MUST be in place before account is set up. – Human Subjects*

– Vertebrate Animals*

– Recombinant DNA*

– Radioactive Materials*

– Biohazard*

– Export Control*

– Lasers (Class 3 or 4)

– Federal Good Laboratory Practice

*status can be found in COEUS negotiation record

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Award Set Up

What is the impact of assigning a responsible cost center (RCC)?

• Grant Level RCC – overall management

• Sponsored Program Level RCC – administratively responsible for expenditures

• Correct assignment is essential for account management reports and routing for SRM approvals.

• Create an account for each department involved.

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Example Situation

The business office received an award notification for Professor Purdue, four months later the business office realized that the account isn’t showing up on their account balance listing report.

What could be wrong and what should be done to correct this?

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Example Answer

• The wrong RCC could be listed in the sponsored program and this could have been caught upon the award set up review by the business office.

long term issue – expenses weren’t tracked for that department which impacts the research incentive funds

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Award Set Up

What’s the impact of the “Credit Split”?

• Proposal Reports

• Award Reports

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Award Set Up

What is the impact of the additional data tab?

• The RCC on a sponsored program will receive expenditure credit.

• Allows for flexibility to allocate expenditure credit among multiple academic departments and add DP centers.

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Award Set Up

Additional Data Tab - GMPROGRAM

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Why does SPS track interest earnings on grants where the interest goes back to the project?

• When required by the sponsor to ensure that any interest on the cash balance is credited to the grant.

• Allows the interest earned to be used by the project.

This is not a common requirement of sponsors and is most often from foundations.

Business ServicesElectronic Award Information Requests & Notices and Award Set Up

Resources:

• Account Management Guidelines for SPS Funds– http://www.purdue.edu/sps/doc/Account%20Management%20Guidelines%20for20SPS

%20Funds.doc

• GM Account Set Up checklist– http://www.purdue.edu/sps/xls/GMAccountSetupChecklist.xls

• OVPR website for Regulatory compliance– http://www.purdue.edu/Research/vpr/rschadmin/rschoversight.shtml

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Award Set Up

Questions?