compliance from ground zero: current issues facing
DESCRIPTION
TRANSCRIPT
Compliance From Ground Zero:Current Issues Facing Administrators in
Departmental and Central Offices NCURA Region 1 Annual Meeting
May 17, 2005, Mystic CT.
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Presented by:
Vivian Holmes- Harvard Medical School
Mark Daniel- Partners Healthcare System Inc.
We Are in a Target-Rich Environment…and …
We’ re Often Between a ROCK and a HARD PLACE
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Compliance: What do we really mean? Polices, Procedures, and Business Processes
Systems
Checks and Balances
Roles and Responsibilities
Training
Documentation
Stewardship of Sponsored Funds
Federal Regulations and Policies
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
What Are The Kinds of Compliance Issues We Deal With Every Day?
Departments
Central Offices
Institutional
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Outline: Common Compliance Issues
I. Financial
Budgeting
Standards for Costs
Expense Approval and Monitoring
Cost Transfer
Cost Sharing
Effort Reporting
Financial Status Reporting
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
II. Other Common Compliance Issues That We Deal With:
Recharge/Service Centers
Subrecipients
Clinical Research Billing
Documentation Standards, Records
Non-Financial Reporting
Humans and Animals
Ethics
Roles and Responsibilities
III. Guidance/Federal Regulations and Audits
IV. Training
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
I. Financial Compliance Issues
Budgeting
The need for budgets
Responsibilities of the parties in the budgeting process
Are annual budgets developed for sponsored projects and adjusted as needed?
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Standards For Costs
Consistency
Allocability
Allowability
Reasonableness
Documentation, Support
CAS
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Expenditure Monitoring
Grant expenditures must be reviewed, by Department Administrators each month and variances understood
Late expense monitoring is inefficient and creates risk
PIs must be kept informed of expenses and balances
Shadow Systems
Institutional Systems
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Cost Transfers Retroactive transfers of expenditure from one account to another as a result
of errors, oversight, re-budgeting, etc..
Frequent and/or undocumented and unjustified cost transfers may indicate problems
Must be managed
Must be allowable, allocable, documented, justified, and authorized
Can’t transfer expenses from overspent grants to other grants
Late- over 90 days old
Cost transfers should be used to correct errors not to manage the grant funds.
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Cost Sharing
Project costs not borne by the sponsor
Commitments made in proposal that support the project but is not paid for by the sponsor
May be required by the sponsor as part of the grant program (Mandatory) or voluntarily offered by the grantee (Voluntary)
Impacts calculation of indirect costs
All parties must understand the total costs
Policies
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Effort Reporting
Determines and supports salary (and FB) costs (including cost shared effort) charged to sponsored agreements
Involves programmatic and cost compliance issues and both direct and indirect costs
Acceptable methods
Certified Effort vs Charges to sponsored agreements
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
Financial Reporting
Financial Status Reports
Cash Reports
90 day timeframes
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
II. Other Common Compliance Issues That We Deal With:
Recharge/Service Centers
Monitoring Our Subcontractors
Clinical Research Billing Patient Care Costs
Clinical trial budgets and costs, including PI effort
Documentation and Records
Policies and Procedures: What to Save and for How Long
Source documents, paper trail vs. electronic
Non-Financial Reports: progress, inventions, equipment
Inventory
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
II. Other Common Compliance Issues That We Deal With:
Human Subjects; IRB
Animals
Conflict of Interest, RCR
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
II. Other Common Compliance Issues That We Deal With (cont):
Roles and Responsibilities:
Faculty and Research Administration’s perceptions and understanding about their respective roles often differ
some faculty understand / want their role to be limited to scientific or technical issues
some think PI should have total control
Departmental Administrators are often unsure about their role and responsibilities or abdicate them. (caught between a rock and hard place)
Research Administration’s and Research Accounting’s perceptions about their respective roles sometimes overlap; contributing to bottlenecks, confusion, frustration.
Compliance From Ground Zero - Finding Guidance
III. Things to remember about OMB Circulars and Certain Other Federal Agency Polices:
In many cases they provide “guidance” to the agencies
Often allow for some interpretation
Many agencies often have their own implementation standards that may differ from each other
Agencies generally may not be more restrictive, add additional requirements, or reduce minimum requirements unless authorized by law or approved by OMB.
Compliance From Ground Zero
What are we complying with?
Key guidance is contained in a number of different federal regulations including:
OMB Circular A-21 Cost Principals for Higher Education
OMB Circular A-110 Uniform Administrative Requirements..
OMB Circular A-133 Single Audits
NIH and NSF Grants Policy Manuals
Other Federal Policies, Regulations and Guidelines
Compliance From Ground Zero
OMB Circular A21 and Other Cost Principle Basics
Basic Cost Principles for Organizations Receiving Federal Awards
Educational Institutions: OMB Circular A21
Non-Profit Organizations: OMB Circular A122
Hospitals
These regulations establish principles for determining costs applicable to grants, contracts, and other agreements.
The principles are designed to provide that the Federal Government bear its fair share of total costs………..
Agencies are not expected to place additional restrictions on individual items of cost.
Compliance From Ground Zero
Cost Principles e.g. A21 (continued)
Direct Costs
Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
Indirect Costs
Indirect Costs, also sometimes referred to as F&A (facilities and administrative) costs F&A ( INDIRECT COSTS ) costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
Compliance From Ground Zero
OMB Circular A110- Uniform Administrative Requirements:
Establishes Administrative Standards that Grantees Must Comply With. For example:
Records that identify adequately the source and application of funds for federally sponsored projects
Effective controls over and accountability for all funds, property and other assets.
Comparisons of outlays with budget amounts for each award.
A-110, cont.
A110 Uniform Administrative Requirements (continued):
Written procedures to minimize the time elapsing between the transfer of funds to the recipient from the U.S. Treasury and the issuance or redemption of checks, ..
Written procedures for determining the reasonableness, allocability and allowability, of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award.
Accounting records including cost accounting records that are supported by source documentation.
Equipment Management standards..
Close-out standards..
Compliance From Ground Zero Current Issues from Departmental and Central Office Perspectives
OMB Circular A133: Audit
— Single Audit Act consolidates federal audits
— One annual audit
— Initiated during FY1992 ( first year covered 2 FYs); circular has been updated several times since then
— Grantees retain outside firm to conduct audit of compliance with federal regulations
— Grantees, federal agencies and auditors went through a learning process during first few audit cycles
— Data collection forms sent to Federal Clearinghouse
— Internal auditors may perform some of the field work
NIH Grants Policy Statement
NIH Grants Policy Statement contains information in addition to the OMB circulars which is specific to NIH awards and grantees such as:
SNAP guidelines
modular budgets
salary cap information
application of rates
prior approval requirements
roles and responsibilities of the parties
other
Updated periodically
Knock - knock…..
III. Audits and Site Visits:
OMB Circular A-133
Federal Agencies
Internal Audits
Non-Federal Audits
Whistle Blower Audits
Fraud Audits
Site visits
Compliance
IV: Training
Compliance Training Programs
Compliance Office
Questions: