Tax & Financial
Take home message: Grants and sponsored funds are provided to U-M for specific purposes, and on specific terms. It is important to administer these funds in compliance with the grant agreement and relevant laws and policies, as well as in accordance with the intended purpose for which the money was provided - otherwise, U-M risks having to repay those funds (and compromises its ability to secure future funds).
- Each principal investigator (PI) and research administrator (RA) working on each project is responsible for ensuring compliance with the fiscal and regulatory responsibilities that arise in managing grants and sponsored awards, as well as other compliance obligations that arise in conducting research.
- The Office of Sponsored Programs (within Financial Operations) supports the PIs and RAs in complying with their financial obligations, and the Office of Research and Sponsored Projects (ORSP) and Office of the Vice President for Research support them in complying with their other research compliance obligations. [See also the U-M Flint Office of Research, and U-M Dearborn Office of Research and Sponsored Programs]
- For all federally sponsored research: the OMB Circular A-21"Cost Principles for Educational Institutions" establishes the principles for determining costs applicable to grants, contracts, and other agreements between the federal government and educational institutions. In brief, the guidelines require that all expenses charged to a research project have a "direct benefit" and should be charged as "direct costs" to the project; and that effort certification be carried out (that is, U-M must certify to the percentage of effort that employees devote to sponsored projects). The Office of Cost Reimbursement (within Sponsored Programs) assures U-M's compliance with Circular A-21.
- Effort reporting: the U-M Policy on Effort Certification (SPG 501.10) sets out what is expected of employees with respect to effort reporting; see also the Sponsored Programs page on Effort Reporting [login required], which provides guidance to faculty and staff on effort reporting, including policies, procedures, educational material and expert contacts. For U-M Health System, see also the UMHS Compliance page on effort reporting.
- Indirect costs: the Standard Practice Guide on Indirect Costs (SPG 303.02) summarizes U-M's policy on the claiming of not only direct costs of research but also indirect costs: the real costs of
University operations which are not readily assignable to a particular project, such as facilities and administration costs).
- There are very specific rules relating to what indirect costs can and cannot be claimed, and these rules change from time to time: see the Sponsored Programs page on Indirect Costs for more guidance [login required].
- There is also a policy on how to manage expenses that are excluded from being claimed as indirect costs against grant funds, so that U-M can flag and monitor those costs - see the Policy on Indirect Cost Recovery Excluded (ICRX) Expenditures [login required].
- In some cases, U-M may choose to waive charging indirect costs against the sponsor funds, or lower the standard indirect cost rate; but this must be approved in advance. The circumstances in which this is permitted, and the procedure for obtaining approval, are outlined on the ORSP Indirect Cost Waivers page.
- For non-federal indirect costs, see the ORSP Non-federal indirect costs page.
- Human subject incentives: if you are providing any type of incentives (such as cash, checks, visa cards or coupons) to human subjects in exchange for participating in research, you must request the incentives through the Human Subjects Incentives Program (part of the Treasurer's Office). See also the Policy on Research Subject Incentives (SPG 501.07-1) and the Internal Controls guidelines for human subject incentives.
- For more information about the rules and compliance requirements that apply to managing money that comes from different kinds of grants and sponsored awards, see the Rules and Compliance page [login required] maintained by Sponsored Programs.
- For more information about the procedure for using grant funds to purchase goods or services, see the Procurement Services page on Purchasing with Sponsored Funds.
- There is an extensive network of research administrators across U-M, who are well versed in grant administration requirements. Utilize these experts in your local Department! You can find Research Administrators within your area by searching for your school or unit in the ORSP Blue Pages.
- Sloppy grant administration has real consequences. If you fail to spend sponsored funds properly, or fail to account for and reconcile funds properly, then you put U-M at risk of having to repay those funds. You also potentially compromise U-M's ability to secure future funds for research. If you deliberately use funds in an improper way, that could even amount to fraud and lead to personal criminal liability.
- Any incentives provided to human subjects participating in research projects need to be properly requested and tracked, regardless of their form. This also means that you may need to collect certain information from the subjects in order for them to be paid properly, and for U-M to report the payment to the Internal Revenue Service. Contact the Human Subjects Incentives Program for assistance.
- Finance isn't just important after you've been awarded a grant: talk to an expert in this area when budgeting for new proposals, so that you can better estimate indirect costs and seek an amount that more fully covers U-M's contribution to the project.
For finance questions related to grants and sponsored projects, contact Sponsored Programs. Their Contact Sponsored Programs page sets out who to contact for different types of questions. You can also speak to your local Department's research administrator, who you can find by searching for your school or unit in the ORSP Blue Pages.
For non-finance related questions related to grants and sponsored projects, contact the Office of Research and Sponsored Projects (ORSP) or Office of the Vice President for Research. See the Grants and Sponsored Research compliance page for more information.
On the U-M Flint campus, you can also contact the U-M Flint Office of Research with any of your questions.
On the U-M Dearborn campus, you can also contact the U-M Dearborn Office of Research and Sponsored Programs with any of your questions.