Internal Audit Office

Kansas State University
5 Anderson Hall
Manhattan, KS 66506-0118

 

785-532-7308
785-532-0186
internalaudit@k-state.edu

Pre-Awards

Chapter 7010
Revised July 30, 2013

Table of Contents

.010 Introduction
.015 Differentiating Sponsored Projects From Fee for Service Activities and Gifts
.020 General Information
.030 Support Services
.040 Legal Name and Official Address of University
.050 Signatures of Authorized University Representatives
.060 Designation of Principal Investigator or Project Director
.070 Authorization to Negotiate a Grant or Contract with Sponsor
.080 University's tax ID and Other Identification Numbers
.085 University Policy on Classified Research
.090 Conflict of Interest
.095 Nepotism
.100 Specific Information Regarding Grant and Contract Documents
.110 Proposals
.120 Awards
.130 Assignment of Account Numbers
.140 Overdraft Requests
.150 Modifications or Amendments
.160 Organizational Prior Approval System (OPAS)
.170 Notices of Proposals That Are Not Funded
.200 Processing Sponsored Project Activity Documents
.210 Sponsored Projects Transmittal Sheet (SP001)
.220 Signature Approvals Required
.230 University Routing Procedures for Proposals and All Other Grant and Contract Documents
.240 Lead Time Required to Process Proposals
.250 Number of Copies of Documents Required
.300 Budget Preparation
.310 Salaries and Wages
.320 Employee Fringe Benefits
.330 Service Charges for Specialized Cost or Recharge Centers
.340 Consultants and Subrecipients
.350 Tuition and Fees
.360 Other Direct Costs
.370 Cost-Sharing, Including Matching Funds and In-Kind Contributions
.380 Facilities and Administrative Costs
.390 Request for Variation of Facilities and Administrative Cost Rate
.400 Contractual Issues
.410 Insurance and Indemnification
.420 Publications
.430 Intellectual Property Rights (Inventions and Patents)
.440 Data Access and Retention
.450 Questions
Related Content
.500 Sample Cover Sheet
.510 KSU's Standard Memorandum of Agreement (MOA)
.520 Overdraft Request
.530 Modification of Agreement
.540 Request for OPAS Authorization
.550 Sponsored Projects Transmittal Sheet
.560 Guide to Completing the Sponsored Projects Transmittal Sheet
.570 Request for Variation of Facilities and Administrative Cost Rate
.580 Sample Budget

.010 Introduction

The President has delegated the authority with respect to contractual and compliance matters for sponsored projects involving University personnel or facilities to the Vice Provost for Research. Operationally, that authority is exercised through the Office of Research and Sponsored Programs which has been designated to be the sole office within the University for the required official signature authority with respect to all contractual and compliance matters that involve University personnel or space and that are proposed to be submitted to potential sponsors external to the University. Thus, all proposals whether new or continuing must be processed through ORSP for formal University approval and signature prior to submission to external sponsors. The ORSP also has sole authority in the acceptance of grants and contracts and subsequent modifications. These policies and procedures apply to all campuses and branch stations of Kansas State University. Operationally, many of these responsibilities are processed through PreAward Services (PAS) in ORSP. General areas of responsibility assigned to PAS include:

  • Negotiating the terms of all contracts and agreements with sponsors, including intellectual property rights and copyright assignments, and requested restrictions on publication rights.

  • Negotiating directly with sponsors for any requests to reduce or waive the facilities and administrative cost rate that the University is obligated to recover under the terms of the agreement negotiated with the federal government that makes it applicable to all sponsored projects.

  • Reviewing all proposed commitments of University funds, new personnel, or additional space requirements being made in the proposal.

  • Providing University assurance to external sponsors on all research compliance issues, including the use and protection of human subjects in research, use and protection of animals in research, the use of biohazardous materials, and assurance of resolution of matters with real or potential conflicts of interests.

  • Handling requests for exceptions to the University policy that Principal Investigator status is reserved for regular members of the University faculty.

  • Reviewing and approving requests for overdrafts and "organizational prior approval systems" modifications (internal approval of modifications without agency approval).

In this chapter, pertinent information and procedures are outlined to assist faculty, staff and others involved in sponsored project activity with both the construction and the processing of sponsored project activity documents.

Sponsored project activity documents include:

  • PROPOSAL: an offer made to an external agency for the purpose of requesting financial support for the proposed research, instruction, service, or other University programs.

  • AWARD: acceptance of the support from an agency.

  • MODIFICATION or AMENDMENT: a change in the initial terms of the award.

Grants, contracts, research agreements, and sponsored award documents are legal instruments which bind the parties to terms stated therein. Therefore, state and federal laws as well as policies and regulations of Kansas State University and the Kansas Board of Regents must be followed when preparing, accepting, signing, and executing such legal documents. The University has authorized only certain individuals to sign such documents and has officially filed these names with the Board of Regents. See section .050 for a list of authorized signatories for sponsored projects at KSU.

As all proposals, awards, and modifications or amendments are legal documents of the University, the policies and procedures outlined in this chapter must be followed in the preparation and submission of documents to extramural funding agencies for their consideration.

The chapter consists of five sections:

  • .020 General information related to sponsored project activity
  • .100 Specific information on grant and contract documents (proposal, award, and modification or amendment);
  • .200 Processing of documents;
  • .300 Basic information on constructing a budget;
  • .400 Potential contractual concerns.

.015 Differentiating Sponsored Projects From Fee for Service Activities and Gifts

The following information is provided to assist in determining when external funds to be received by Kansas State University should be administered as a sponsored project, a fee for service activity, or a gift. In certain circumstances, it may be difficult to determine without a review of the pertinent University and Board of Regents policies and procedures. In these cases, the intended use of the funds, the source of the project specifications, the nature of the proposed work, and the need/requirement for a legal binding agreement are all critical components in determining whether they should be managed as sponsored projects, fees for service, or gifts. The information provided is intended to help define KSU's legal obligations and liabilities, and it is relevant for all personnel who manage such funds. Unresolved issues and any questions should be referred to the Assistant Vice Provost for Research, Office of Research and Sponsored Programs (ORSP), PreAward Services (532-6804) or the Assistant Controller, KSU Controllers Office, Sponsored Projects Accounting (532-6207).

SPONSORED PROJECT (Requires FIS project number beginning with G-)

Generally, whenever KSU agrees (orally or in writing) to provide any goods or services using university facilities or the official time and services of KSU faculty and/or staff, the funds received are to be treated as sponsored project awards to KSU. Sponsored projects occur when KSU or an employee of KSU submits a bid, offer, proposal, or the like or responds (orally or in writing) to a request, announcement, call for proposals, or the like, that results in the issuance of an award involving KSU and another party. These awards could be in the form of grants, contracts, cooperative agreements, or a variety of other agreement formats. All proposals for external sponsored project support regardless of funding source must be processed through PreAward Services. Likewise, all awards for external sponsored project support must be processed by PreAward Services and then forwarded to Sponsored Projects Accounting for deposit with the KSU Controllers Office.

The presence of any one of the following factors generally distinguishes the resulting funds from a fee for service activity or gift, thus classifying the award as a sponsored project:

  1. The proposed activity requires the execution of a grant, contract, agreement, Memorandum of Agreement or Understanding, term sheet, or other such legal instrument which binds the parties to terms stated therein, thus requiring a contractual review to insure that KSU's ability and responsibility to comply with all state and federal laws, as well as policies and regulations of KSU and the Kansas Board of Regents (KBOR) have not been compromised or superseded.

  2. The funds originate from a governmental source.

  3. The proposed work binds the University to a specific line of research or scholarly activity which requires a statement of work or an orderly testing of specific hypotheses, methodology, or validation of particular approaches, i.e., specific expectations or deliverables are attached to the project.

  4. A specific commitment is made regarding the level of personnel effort, items of output (e.g., publication of papers or reports), or achievement of specific performance targets as a condition of funding.

  5. A budget for expenditures by activity, function, or project period is required as a condition of funding and a fiscal report, activity report, or external audit is required during the course of the work or at the end of the project period.

  6. The proposed agreement with the sponsor provides for the disposition of tangible property (e.g., equipment, records, technical reports, theses or dissertations) or intangible property (e.g., rights in data, copyrights, and inventions) that may result from the activity.

  7. Construction projects or acquisition of equipment or facilities where a state or federal government agency provides the funds.

With any of the above factors, PreAward Services must be contacted to review and facilitate the activity.

FEE FOR SERVICE (Requires departmental restricted fees FIS account number)

All fees for service activities at KSU are subject to the KBOR policy on Sales of Products and Services and KSU policies and procedures regarding the establishment of a Schedule of Charges. These policy statements may be referenced in the KSU Policy and Procedures Manual within Chapters 6080 and 6085 respectively. Generally, any sale of products or services by a Regents institution, its auxiliary enterprises, or an affiliated corporation of a Regents institution is deemed appropriate only if such sale is an integral part of, or reasonably related to, an activity which is essential to the fulfillment of the institution's instructional, research or public service mission. The provision of such services fits with the missions of the University when: 1) the University is uniquely qualified to offer such special services; 2) those services provide additional research experience and training for the University's faculty, staff, and students; or 3) access to those services or specialized equipment is not readily available through local commercial means. These services include the utilization of specialized expertise that faculty members possess or specialized instrumentation that may be offered to the University's various constituencies through the University's tripartite mission.

Prior to the sale of any product or service, the responsible unit must establish and receive approval of a Schedule of Charges through the KSU Controller's Office, Financial Reporting & Inventory Control. The subsequent service center established within a department or other administrative unit is referred to as a Recharge and Service Center which has been established for the purposes of providing support for the research and public service activities of University departments, the University community, as well as the provision of services on an incidental basis to external users. The approved pricing, called the Schedule of Charges, shall include applicable facilities and administrative costs (when products or services are offered to external users), and shall follow the breakeven concept, which is accomplished by (1) balancing the accounts at the end of each fiscal year and (2) analyzing the rates on a fiscal year basis and adjusting them to account for any operating surplus or deficit. All fees collected are to be deposited to the appropriate restricted fees fund and shall be used solely for the specific purpose or purposes for which collected. The presence of the following factors generally distinguishes the resulting activity from a sponsored project and classifies the activity as a fee for service.

  1. The activity does not require the execution of a grant, contract, agreement, Memorandum of Agreement or Understanding, term sheet, or other such legal instrument which binds the parties to terms stated therein.

  2. The approved activity involves the standard routine analysis, evaluation, classification, diagnostic, or interpretation of a client's data, samples, mechanisms, procedures, or products, as detailed and approved in the Schedule of Charges and no applied or basic research by the University will be involved in the preparation of or in the conduct of the proposed activity.

Fee for service activities, including the establishment of a Schedule of Charges, should be coordinated with the Assistant Controller, KSU Controllers Office, Financial Reporting & Inventory Control (532-1853).

GIFT

All gifts to Kansas State University are administered by the KSU Foundation. The presence of any one of the following factors generally distinguishes the resulting funds from a sponsored project or fee for service activity and classifies the award as a gift.

  1. The funds are from a non-governmental source and are for facility enhancement ("bricks and mortar") or for the University's endowment.

  2. The funds are from a private individual, corporation, or foundation and no specific deliverables like those in a sponsored project are specified or expected.

  3. Similarly, the donor specifically intends the contribution to be a charitable gift with no sponsored project deliverables specified or expected.

  4. General conditions or stipulations placed on the intended use of the money serve merely to direct the funds to some area such as scholarships, facility enhancement, or general research support. The donor may request a summary of how the funds were utilized.

  5. The donor intends the gift to be irrevocable and, therefore, relinquishes the right to reclaim the gift or any unused portion thereof.

  6. The donor makes the gift to the University without expectation of economic benefit or other tangible benefit commensurate with the worth of the gift.

Gift solicitations should be coordinated with the appropriate KSU Foundation representative in each college or other relevant unit. The KSU Foundation should be contacted for procedures applicable to gift solicitations.

NOTE: Regardless of whether funds are classified as sponsored projects, fees for service, or gifts, approval(s) must be obtained from the proper compliance committee(s) if any of the funds are to be used to support activities involving human subjects, animal care and use, radiological hazards, or biohazards. The approval(s) must be obtained prior to the commencement of activities and the expenditure of any funds in support of such activities, per federal regulations.

.020 General Information

General information on sponsored project activity includes:

  • University support services
  • Legal name and official address of the University
  • Signatures of authorized university representatives
  • Designation of Principal Investigator/Project Director
  • Authorization for negotiating a grant or contract with a sponsor
  • University's Tax ID and other identification numbers
  • University policies on classified research, conflict of interest and Nepotism

.030 Support Services

ORSP provides comprehensive services for new program development, proposal preparation assistance, seed grant programs, and matters related to University policies on research, including research compliance assurances.

The location of ORSP is:

OFFICE OF RESEARCH AND SPONSORED PROGRAMS (ORSP)
102 Fairchild Hall
Telephone: 532-6195 and Telefax: 532-5944

The Office of PreAward Services (PAS), which provides comprehensive services related to proposal activities, is located in:

PREAWARD SERVICES (PAS)
2 Fairchild Hall
Telephone: 532-6804 and Telefax: 532-5944

The URL for the Research home page on the World Wide Web is as follows:

http://www.ksu.edu/research

Services provided by PAS include:

  • Budget preparation assistance
  • Assistance in completion of forms, e.g., assurances and certifications
  • Securing of signatures for special approvals, including research compliance
  • Review of proposal documents to determine responsiveness to and compliance with sponsor guidelines
  • Photocopying, proposal assembly, and mailing
  • Executing contracts
  • Reviewing Request for Proposals (RFPs), Request for Applications (RFAs), and Request for Quotations (RFQs)
  • Locating information on funding sources through access to national databases (call 532-5045 direct or visit our web site at http://www.ksu.edu/research.

.040 Legal Name and Official Address of the University

Board of Regents' policy states that ALL CONTRACTS SHALL BE IN THE NAME OF THE INSTITUTION and that individual departments, divisions, or colleges SHALL NOT ENTER INTO CONTRACTS.

The legal name and official address (to be used on all sponsored project documents) for the University are:

NAME:Kansas State University
  
ADDRESS:2 Fairchild Hall
Manhattan, KS 66506-1103

In some special cases, representation of the department may be expressed as shown in the sample cover sheet in Attachment .500, or as shown in the first paragraph of KSU's standard Memorandum of Agreement, Attachment .510, which is also available in electronic format and downloadable from the research WWW site).

.050 Signatures of Authorized University Representatives

The President has designated University signature authority for all sponsored programs to the Vice Provost for Research. This authority is delegated to the Associate Vice Provost for Research. In general, all sponsored program activity documents must be so authorized prior to any communications of a contractual nature with the sponsor. All proposals should show the following name and title on the signature page of the proposal or other formal document related to the sponsored program:

Paul R. Lowe
Assistant Vice Provost for Research

If sponsors require signatures of other university officials, allowances for these signatures should be made as follows:

When the signature of the UNIVERSITY FISCAL OFFICER or the VICE PROVOST for RESEARCH is required, the additional designations should be:

Thomas M. Rawson
Vice President for Administration & Finance

R. W. Trewyn
Vice Provost for Research

When the signature of either the PRESIDENT or the BOARD OF REGENTS is required, leave the signature block blank for PAS to complete.

.060 Designation of Principal Investigator or Project Director

The Principal Investigator (PI) or Project Director (PD) is the individual who accepts full responsibility on behalf of the University for the technical execution of the proposed project. The normal requirement to serve as a PI/PD is that the individual be a regular member of the faculty of Kansas State University as defined in Section C10 of the Faculty Handbook.

When it is desirable or necessary for other individuals who have official, continuing relationships with the University, to serve as a PI/PD, special permission may be granted by the Vice Provost for Research. This permission should be sought by making a request in writing that states clearly the reasons for requesting such an exception. This request should be accompanied by signatures of approval of the appropriate Department Head and the appropriate College Dean. Such requests must provide assurances by the deparment that all necessary space is available for the conduct of the proposed work, that the department will assume full responsibility for the financial aspects of the project, provide assurances that all research compliance issues will be satisfied, and that all sponsor requirements (including intermediate and final reports) will be provided according to the sponsor schedules so that funding for other programs is not placed in jeopardy. Usually, the Department Head assumes the responsibility to satisfy these sponsor or university requirements in the event that the designated PI/PD is unable to fulfill them.

In special circumstances, non-KSU employees may serve as Co-Principal Investigators. This requires a written agreement between either (1) the University and the non-KSU employee, or (2) the University and the non-KSU employee's institution. The agreement should outline both the commitment and the responsibility of the individual and the institution to the project. This written agreement normally takes the form of a subcontract with the institution where the non-KSU Co-PI/PD is employed.

.070 Authorization to Negotiate a Grant or Contract with Sponsor

The negotiation of terms and conditions of grants and contracts requires full compliance with the laws of the State of Kansas and the federal government, as well as the policies and procedures of the Kansas Board of Regents and of Kansas State University. Furthermore, consideration of the specific terms and conditions set forth by the potential sponsor is equally critical.

The Vice Provost for Research has delegated the negotiation of grants and contracts for sponsored projects to PreAward Services (PAS) in the Office of Research and Sponsored Programs; these negotiations are generally conducted by the Director of PAS or designee. In more sensitive cases, the Vice Provost for Research, or the Associate Vice Provost for Research, will conduct these negotiations. On special or unusual occasions, authorization to conduct negotiations may be delegated by the Vice Provost for Research to other university administrators and/or faculty members such as when these negotiations must take place in a foreign country. This delegation must be secured in writing in advance, and will be made only on a project-by-project basis.

.080 University's Tax ID and Other Identification Numbers

The federal tax identification number (TIN) for Kansas State University is 48-0771751.

Other useful identification numbers are:

ID for DHHS1-480771751A1
Institutional Code for NSF0019281000
Dunn & Bradstreet Number92-977-3554
Standard Industrial Code (SIC)8221
CAGE Code4B817
FEIN Number (same as TIN)48-0771751

.085 University Policy on Classified Research

The University has the policy (see Faculty Handbook) that classified research may not be carried out under university auspices. Classified research is broadly defined as research about which any of the following aspects are kept secret for an indefinite period, with control of their release or publication exercised by an agency other than the University:

  1. The purpose of the research
  2. The name of the investigator(s)
  3. The amount or the source of funds
  4. The university facilities used
  5. The research procedures
  6. The results of the research

The University's official policy statement on classified research may be found in the Faculty Handbook Sections G51 through G53.

.090 Conflict of Interest

PIs/PDs who have, or whose family members may have, any financial interests with any non-governmental sponsor proposing to fund their research, must disclose that interest according to University policy. These financial interests may include, but are not limited to: equity, managerial roles, or consultantship arrangements. Faculty and Unclassified staff must submit disclosures to their Department Head and Dean of the College, and then to the Provost, prior to the submission of a proposal involving such potential conflicts of interest (COI). In addition to the submission of the disclosure, a management plan must be developed by the PI/PD and approved by the Department Head, Dean, and Provost for apparent conflict of interest. Federal regulations dictate that an acceptable management plan must be in place prior to acceptance of funding for the proposed research.

Both NIH and NSF have published regulations which require all Universities and other recipients of federal funds to have a Conflict of Interest Policy in affect to be eligible to receive extramural funding from their agencies; all other federal agencies have a congressional mandate to publish similar policies addressing COI. Disclosure should be made to department heads and college deans and forwarded to the Provost's office using the "Report of Non-University Interests and Commitments" form available from the Provost's Office. This report is to be filed annually, with updates submitted as needed to indicate any significant changes throughout the academic year.

The current version of the University policy will be found in the Faculty Handbook beginning with Section D39, and also Appendix C. The Kansas State Laws governing Conflicts of Interest are set forth in K.S.A. 46-215, et seq. of the State Government Ethics Act.

.095 Nepotism

The Board of Regents (BOR) has a policy regarding appointments of family members (Section A40 of the Faculty Handbook) that states:

Persons may be appointed to classified or unclassified positions without regard to family relationship to other members of faculty or staff. If a person is in a position which requires an evaluation on a personnel decision such as those concerning appointment, retention, promotion, tenure, or salary of a close relative, such condition shall be deemed a conflict of interest and that person shall not participate in such a decision, and that person shall not participate in any group or body which is considering any such decision (BOR 11-20-81).

This policy applies to all appointments at the University, including those on extramural sponsored programs. Procedures should be set up for administration of this policy, usually by having the department head assume administrative responsibility. A memo should be placed in the personnel file for each such situation detailing how personnel actions will be handled, referencing all of the categories prescribed by the Regents, including salary. A copy of that memo should also be provided to PAS for inclusion in the project file. The latter is best done at the time of proposal submission so that PAS can respond properly and knowledgeably to inquiries from federal agencies. This must be done prior to making any appointments that fall in this category.

The State Law governing nepotism is set forth in K.S.A. 46-246 of the State Government Ethics Act.

.100 Specific information reagarding grant and contract documents

Grant and contract documents include proposals, awards, and modifications or amendments. Specific information on each of these types of documents is provided below. Section .200 provides information on processing grant and contract documents through university channels.

This section also includes topics on: assignment of account numbers, overdraft requests, Organizational Prior Approval System (OPAS), and notifications of non-funding.

.110 Proposals

Proposals include:

  • Solicited proposals in the form of a Request for Quotation (RFQ), Request for Proposal (RFP), or Request for Application (RFA).

  • Unsolicited proposals in various formats.
  • Standard applications such as those to federal agencies or to foundations.

FORMAL PROPOSALS: Most proposals are FORMAL and require university approval prior to submission. Formal proposals are usually prepared using forms and guidelines provided by the sponsor. When submitting proposals for university approval, a copy of the sponsor's guidelines must be forwarded to PAS, with the exception of standard applications to DHHS, NSF, USDA-CSREES, and DOE.

FIXED PRICE AGREEMENTS or INFORMAL PROPOSALS: In some instances, it is encouraged as well as advantageous to submit an "informal proposal" that often takes the form of a Fixed Price Agreement. This method is particularly advantageous when dealing with corporate sponsors, as the proposal specifies a set or "fixed" price to perform an agreed upon set of specified deliverables, but contains no details of the budget. Rather, the budget is kept only internal to the University for cost accounting purposes only. In these types of agreements, sponsors agree to the scope of the work to be performed, with an agreed upon value, but provide no details of how the funds are to be spent on personnel, supplies, equipment, travel, or facilities and administrative costs. Further, in such fixed price agreements, should any funds remain at the conclusion of the project, the residual funds may be transferred to a departmental Restricted Fees Account, if permitted by the agreement (see PPM Chapter 7050, Section .210). To ensure that university policies on these matters are adhered to, investigators must utilize the services of PAS.

The proposal signed by PAS is a legal document binding on the University and hence no changes in the proposal may be made after that signing without the written approval of PAS. PAS retains this legal document until an award notice is received.

.120 Awards

An award is a SIGNED DOCUMENT from the sponsor notifying the UNIVERSITY that a project is being funded at a specified level, usually for a specified term. Notification of an award comes in various forms, such as by a letter, grant, contract, cooperative agreement, service agreement, or purchase order. For non-federal sponsors that do not have a standardized format for making awards or that do not require that their format be used, the University's standard Memorandum of Agreement (MOA) is recommended. See Memorandum of Agreement (MOA)(Attachment .510), downloadable from the research WWW site. The MOA is accompanied by a description of the scope of work and a project budget. However, if a Fixed-Priced Agreement (Section .110 and .300) is used, the detailed budget will not be provided with the MOA.

Official awards must be ACCEPTED by BOTH the SPONSOR and the UNIVERSITY. That is, communications such as phone conversations, letters of intent, or unsigned documents are NOT official awards and will not be honored.

When the award notice is received by PAS, the notice is forwarded either to the affiliated administrative unit or to the PI/PD, depending on the procedures established by the unit, for processing through the appropriate administrative channels (see Section .230). When a fully executed award notification is processed, PAS first records the award and transfers both proposal and award notification to Sponsored Projects Accounting (SPA), a unit of the Controller's Office housed under the Vice President for Administration and Finance. SPA has sole responsibility for activating the fiscal accounts for the required financial reporting and for maintaining auditable records (see Chapter 7050 on Post-Award Procedures for more details).

.130 Assignment of Account Numbers

Upon receipt of the proposal and award notice from PAS, SPA assigns the account number. The accountant for the department or other administrative unit responsible for financial matters will be notified via electronic mail of the account number.

.140 Overdraft Requests

When a department or college has received either verbal or written notification that an award is forthcoming and believes that the risk is minimal, provisions can be made for establishing an account prior to actual receipt of the official award. This is done using an Overdraft Request Form (Attachment .520), downloadable from the research WWW site. The amount of funding requested in an overdraft should be limited to anticipated expenses to be incurred prior to receiving the official award notice. If the project is not funded, the unit(s) indicated on the Overdraft Request Form assumes financial responsibility for all expenses incurred. Approval of an overdraft is also contingent upon an adequate balance in the state's restricted fees account.

.150 Modifications or Amendments

Modifications or Amendments to a project include:

  1. change in PI/PD
  2. change in scope of work
  3. change in period of performance
  4. budget revision
  5. carryover of funds
  6. other contractual terms and conditions

Because a modification is a change in the legal terms of an agreement, whether initiated by the PI/PD or by the sponsor, it must be reviewed by the University and is subject to the approvals for the initial proposal or award. When initiating a modification, the appropriate method for accomplishing this may be sponsor dependent, with the usual options given in 1-3 below. If there is doubt as to the most appropriate method, consult the PAS or SPA offices.

  1. Many sponsors ask for a letter from the PI/PD to the sponsor, approved and cosigned by the institutional representative. Some sponsors are willing to approve the modification simply by signing the letter of request; other sponsors have formal vehicles for modifying a grant of contract.

  2. Where sponsors signed KSU's standard Memorandum of Agreement, the Modification of Agreement (Attachment .530) (downloadable from the research WWW site) should be used.

  3. Several agencies of the federal government delegate broad authority to the institution to make on-site changes although some restrictions apply. This authority is referred to as the Organizational Prior Approval System (OPAS), discussed in Section .160 below.

Note: When an award document allows minor reallocation of funds from one budget category to another category (usually within a certain percentage of the overall budget), no action is required by any of the parties involved. In other cases, the award document may require institutional approval only, termed Organizational Prior Approval System (OPAS).

.160 Organizational Prior Approval System (OPAS)

Federal agencies that delegate OPAS authority to Kansas State University include:

AFOSRAir Force Office of Scientific Research
DHHSDepartment of Health and Human Services (research grants only)
DOEDepartment of Energy
EPAEnvironmental Protection Agency
NASANational Aeronautics and Space Administration
NEHNational Endowment for the Humanities
NSFNational Science Foundation
USDAU.S. Department of Agriculture (limited to CSREES programs)

As this list is not all inclusive, please contact PAS for guidance.

Within the constraints imposed by OPAS, changes that the University is empowered to authorize must be approved first by the department head or chair and the college dean and/or the director of the research office through which the project is administered (see the Request for OPAS Authorization (Attachment .540) , (downloadable, from the research WWW site). If this request is approved by PAS, it is forwarded to SPA for implementation. A copy of the approval is sent to the PI/PD, department head/chair and the director or dean.

OPAS guidelines require that any changes approved by the University must be in advance of the action, and that all changes must be deemed necessary to carry out most effectively the goals for which the original award was made. The guidelines also stipulate that the change must be adequately justified in writing.

UNLESS OTHERWISE STATED IN THE GRANT AGREEMENT, the institution is authorized to approve the following:

  1. PREAWARD COSTS:

    Expenditures are authorized within 90 days prior to the effective date of the award. However, such expenditures that precede the award are solely at the financial risk of the unit requesting these expenditures (e.g., college or department). When OPAS approval is granted by PAS for such preaward expenditures, a project account number is assigned by SPA.

  2. NO-COST TIME EXTENSION (in the final budget period):
    • extensions are not allowed under OPAS for AFOSR awards
    • extensions of up to 12 months for DHHS, EPA, NASA, NEH, NSF and USDA-CSREES awards to name a few
    • extensions may not be exercised merely for the purpose of using unliquidated balance.

    When time extensions are granted through the OPAS process, the University is required to notify the agency in writing within 10 days of approval and/or at least 10 days prior to the end date specified in the award. PAS will communicate the granting of a time extension to the agency. A copy of the letter to the agency will be sent to the PI/PD, departmental head/chair and director or dean.

    Federal OPAS guidelines authorize the University to grant an OPAS time extension up to 10 days prior to the expiration date of the award. If PreAward Services receives a request for a time extension after this deadline, the request will not be processed per federal regulations.

  3. CARRYOVER OF FUNDS from one budget period to the next period for continuing awards. When necessary, SPA will notify the agency when the last billing for the period is made.

  4. REBUDGETING OF FUNDS FROM ONE CATEGORY TO ANOTHER may be approved under OPAS with certain exceptions. Exceptions to this authority are:

    • Significant transfers that result in a change in the scope or objectives of the project
    • Reallocations of funds budgeted for participant or trainee costs
    • Reallocation to transfer funds for subcontracts or subawards if not described in proposal and funded in the award document
  5. SPENDING FOR NON-BUDGETED ITEMS, such as equipment or travel with certain exceptions. Exceptions to this authority are:

    • Capital expenditures for land or buildings
    • Equipment over $5,000 on NASA awards
    • General purpose equipment
    • Equipment that was originally proposed but removed from budget by sponsor prior to award
  6. UNDER OPAS, THE UNIVERSITY CANNOT AUTHORIZE:
    • Change in principal investigator
    • Change in scope of work
    • Expenditures not directly related to the agency approved scope of the project

.170 Notices Of Proposals That Are Not Funded

If a PI/PD receives a notification that a project will not be funded, that notice should be provided to both the department or appropriate research unit and to PAS.

.200 Processing Sponsored Project Activity Documents

The following topics are addressed in this section:

  • Sponsored Projects Transmittal Sheet
  • Signature approvals required
  • Routing procedures for grant and contract documents
  • Lead time required for processing
  • Number of copies of documents required

Documents prepared for the purpose of seeking support from any source external to the University must be processed through the appropriate administrative unit(s) on campus and then submitted to PreAward Services as the authorized representative of the University. Notifications of funding and subsequent contractual documents are to be processed using the same procedures.

.210 Sponsored Projects Transmittal Sheet

The Sponsored Projects Transmittal Sheet is a required, internal university control form used for recording sponsored project related information. This is an official document of the University that must accompany proposals, revised proposals, award notifications, and project modifications. All University commitments of personnel, matching funds, and additional space requirements, along with certifications regarding research compliance issues such as conflict of interest, use of human subjects, use of biohazards, use of animals, etc are made on this form, and these must have signature approval of all parties responsible for making these commitments and or certifying compliance.

A copy of the form and details on completing it are provided in Attachment .550 and Attachment .560. Hard copies of the current version of this form are available in PAS. It is also available as a downloadable form from the research WWW site.

.220 Signature Approvals Required

Generally sponsors require original signatures on proposals, including those of the PI/PD(s) and the authorized institutional representative. In addition, the University requires on the Sponsored Projects Transmittal Sheet signatures of approval of the department head (chair), college dean, and the director of an experiment station, if appropriate.

On occasion, other signatures of approval may be required, either by the sponsor or by the University. These approvals, referred to as SPECIAL APPROVALS, are discussed in Section 2 below, and include:

  • certifying all research compliance issues, such as the use of human subjects, live animals, radioactive materials, recombinant DNA, other biohazardous materials, and infectious agents

  • assignments of intellectual property rights;

  • any other administrative approvals and programmatic commitments

Provisions for signatures of approval of academic and research units and for all required special approvals are made on the Sponsored Projects Transmittal Sheet. In addition, the delineation of financial commitments of matching funds should be made on this form or by separate letter. It should be noted that approval signatures indicate concurrence with the contents of the document in terms of contractual and financial commitments, and are considered binding commitments. If concerns or disclaimers about the contents or commitments exist, the exception must be noted in writing on this transmittal sheet or, if preferred, in a separate memorandum accompanying this form. Signatures of approval obligate the signatories to provide all space and fiscal commitments, except where deviations are specifically delineated and accepted by PAS.

  1. Department, College, and Experiment Station Approvals

    The Department Head or Chair approves for the Department. The Dean of the College approves for the College, other signatures may be required such as those involving experiment stations.

    If a sponsored project involves faculty members (with time direct- charged or cost-shared) from MORE THAN ONE department, college, OR if a project involves faculty members with JOINT department, college and/or station appointments, approval of each represented department, college, and/or experiment station is required.

    If additional space is required that is not already available in the department or is not committed by the Dean of the College, then a letter must be included with the proposal notifying the University that additional space will be required if the award is made and accepted. If this request is not made and accepted, the home unit assumes sole responsibility for providing the additional space required to conduct the project.

  2. Special Approvals

    In addition to department, college, and experiment station approvals, other University approvals are required for the following reasons:


    1. Intellectual Property. Proposal/award requires intellectual property to be licensed by, or assigned to, the sponsor (Vice Provost for Research)

    2. Administrative Approvals

      1. New faculty hired using project funds, but who will have continuing commitments or expectations beyond the duration of the project (College Dean)

      2. Faculty members on the project who will be off-campus for three months or longer, e.g., sabbatical or IPA (College Dean, Provost and Board of Regents)

      3. Seeking of federal monies for capital improvements. (Vice President for Administration & Finance, and Board of Regents)

      4. Faculty overloads in instruction. (Department Head, College Dean, Dean of Continuing Education, and Vice Provost for Research)

      5. Construction or alterations of facilities, including electric power modifications, additional or unusual space requirements, or project space not presently available or assigned to PI, department or college. ** (Department Head, Assistant Vice President for Facilities Management)

      6. Purchase of computer equipment in excess of $50,000 per year. (Vice Provost for Information Technology Services)

        ** It is assumed that all space requirements for a sponsored project being proposed can be satisfied within the space assigned to the Department or the Dean of the appropriate College. Concurrence is signified by the appropriate signature on the Sponsored Projects Transmittal Sheet.

      When additional space for the project is required, a separate letter identifying necessary space and requesting its use should accompany the Sponsored Projects Transmittal Sheet so that the request can be reviewed. Approval of the request must occur before the proposal is submitted.

      In general, the University will attempt to provide needed space when the award recovers full facilities and administrative costs, as obligated by the University in accepting the award. Projects that require additional space but do not recover full facilities and administrative costs will be expected to include all costs of the space required as a direct cost in the proposal.

    3. Programmatic Commitments: Various programmatic commitments require signatures of approval before a proposal may be submitted to an extramural sponsor. These include:

      1. New academic programs or administrative organizations to be established (College Dean, Graduate Dean, Vice Provost for Research, and Provost)

      2. Project or program involving KSU as a member of a formally established consortium. (Vice Provost for Research)

      3. New Centers and Institutes (Vice Provost for Research, Provost, and Board of Regents)

      4. New graduate programs and graduate instructional credit or fellowships (Dean of the Graduate School)

      5. International program activities (Associate Provost for International Programs)

      6. Cooperative Extension programs (Director of Cooperative Extension)

      7. Conferences, workshops, or off-campus courses (Dean of Continuing Education)

    4. Research Compliance: When the proposed research activity involves the use of human subjects or animals, radioactive materials, and/or biohazards including recombinant DNA and infectious agents, federal regulations require that appropriate committees established within the University approve the project prior to the initiation of the work. These procedures apply to ALL activity at the University, independent of whether the project receives any intramural or extramural financial support. The signature of the Chair of the appropriate committee must be secured prior to starting project, assuring committee approval according to university and federal requirements.

      1. Use and Protection of Human Subjects in Research (Chair of the Committee on Research Involving Human Subjects)

      2. Use of Radioactive Materials (Chair of the Radiation Safety Committee)

      3. Use of Live Vertebrates (Chair of the Institutional Animal Care And Use Committee)

      4. Use of Biohazards including Recombinant DNA or chemical, biological, and infectious hazards (Chair of the Institutional Biosafety Committee)

The signature area located at the bottom of the back page of the Sponsored Projects Transmittal Sheet (SP001) provides for assurance and approval by the PIs/PDs, Department Heads, Deans, and Directors that they agree with the contents of the attached document and are prepared to comply with all obligations contained therein.

Specifically, the PIs/PDs agree that by signing, they agree to abide with University policies and regulations, including, but not limited to, those defining responsibilities, conditions of employment, outside financial interests, and all other research compliance matters. PIs/PDs also agree to be bound by the terms and conditions of the outside grant or contract which supports the proposed activity. PIs/PDs are also certifying that they have not been debarred, suspended, or declared ineligible to receive federal funds, that they have disclosed any potential conflict of interest through the KSU Report of Non-University Interests and Commitments, and that, to the best of their knowledge, no appropriated funds have been expended that would influence awarding the proposed grant or contract. They also agree to disclose promptly each subject invention made under the sponsored program and to execute all papers necessary to file patent applications to the University or its designee.

Department Heads, Directors, and Deans agree that, in signing, they have reviewed the Sponsored Projects Transmittal Sheet and the appended document for all institutional commitments, and approve and commit to the obligations therein. Their signature also certifies they have reviewed the documents for any real or apparent conflicts of interest, and affirming either that none exists or is being managed. That is, an approved management plan for the potential conflict of interest has been forwarded to the Provost's Office along with the individual's Report of Non-University Interests and Commitments.

It should be noted that "all institutional commitments" and "obligations therein" include the commitments made by the faculty member to complete the project as agreed, that the physical space required to complete the project has already been assigned to the PI/PD, or will be made from space currently under the control of the department head or dean. If the space required is not available, a letter of request and justification must be submitted, with signature of the Vice President for Administration and Finance.

.230 University Routing Procedures For Processing Proposals and All Other Grant and Contract Documents

The processing of proposals and all subsequent grant and contract documents follow a routing path that is determined by:

  1. the type of PROJECT ACTIVITY,
  2. the ADMINISTRATIVE UNIT with which the PI/PD is affiliated.

PROJECT ACTIVITY is classified as (1) research or (2) non-research.

RESEARCH activity is categorized as basic, applied, or some blend of the two activities.

NON-RESEARCH activity includes: instruction, training, non-research related equipment, facilities and construction, and public service

Definitions of the various types of activity are provided below.

Research: systematic inquiry or investigation to discover or revise knowledge, theories or applications.

  • Basic: Investigations directed at discovering new knowledge, procedures or information.
  • Applied: Using known knowledge and procedures to solve a practical problem.

Instruction/Training: Involving instructional course work or training classes/workshops.

Equipment: Purchase of equipment for research or other programs

Facilities/Construction: Building, installing or renovating a structure.

Public Service: Service rendered to the general public. Includes Continuing Education, Cooperative Extension, and "Other." Currently "Other" consists of those activities of the Kansas Center for Rural Initiatives, Small Business Development Center, and the Huck Boyd National Institute for Rural Development.

As explained in Section .010, ORSP/PAS has been delegated the authority for university signature on proposals and other grant and contract documents associated with extramural support. All such documents must be processed through this office before they may be submitted to any entity off-campus. At the same time, other offices have designated areas of responsibility that are useful or required components of the proposal preparation process within a particular college. When appropriate, or as required, proposals are to be routed through these administrative units for approval prior to being submitted to PAS for final review and signature. These offices include:

AGRICULTURAL EXPERIMENT STATION (AES). AES is to sign off on all research projects where PIs/PDs have full- or part-time appointments within the AES.

ENGINEERING EXPERIMENT STATION (EES) EES is to sign off on all research proposals for faculty having appointments in the College of Engineering. The Director of EES signs all research proposals, and the Dean of Engineering signs all engineering instructional proposals.

OFFICE OF CONTINUING EDUCATION (ContEd) ContEd is to be used whenever instructional programs will be offered under the auspices of this unit. Per University policy, ContEd must also approve all projects that involve off-campus courses, conferences and workshops.

COOPERATIVE EXTENSION SERVICE (CoopExt) CoopExt is to be used by faculty with appointments in the Cooperative Extension Service and for extension projects of a public service nature.

.240 Lead Time Required to Process Proposals

PAS is required to review:

  • budgets
  • university commitments
  • compliance's and assurances regarding federal and statelaws and regulations
  • compliance with state, Board of Regents, and University policies and procedures
  • sponsor's programmatic guidelines

This office does NOT review the technical aspects of the proposal, relying instead on the wisdom and judgment of those in the discipline to assure high standards and compatibility with the programmatic intentions of the sponsor.

In making their review, the staff of PAS provides feedback to the PI/PD in two ways:

First, they note issues that must be resolved before the proposal can be submitted, such as when proposals do not comply with federal, state, university, or sponsoring agency requirements, or with research compliance issues. The staff works directly with the PI/PD to resolve these issues prior to the submission of the proposal.

Second, the staff may be familiar with specific agency operational guidelines (written or unwritten) and make suggestions that may benefit the proposal in ways that may be beneficial to the PI/PD in the agency review process. These suggestions may range from technical concerns, such as page number or point size limits, to minor problems such as typographical errors. While the staff will provide such feedback to the PI/PD as information, it will be the PI/PDs exclusive option to implement such suggestions. As this feedback is provided only as a service to the PI/PD, it will not impede or delay the submission of the proposal by PAS.

The responsibility of reviewing proposals for budgetary, compliance and compatibility issues requires that the PAS staff members have adequate time for examination in advance of the program deadlines set by the sponsor. This is especially true during peak periods for proposal submissions (notably September 15-November 15, December 15-January 15, and May 15-June 15). To ensure adequate time for review (a process that is to protect both the PI/PD and the University), one of the following two time deadlines should be adhered to:

  1. Five (5) Days in Advance of Due Date

    If there are no unresolved issues in the proposal (of the type discussed in the paragraph below), the DEADLINE FOR SUBMISSION OF PROPOSALS TO PreAward Services is 5 FULL WORKING DAYS prior to the time the proposal must be sent to the sponsor. This provides adequate time to make any corrections that may be needed and to review compatibility with sponsor programmatic guidelines.

  2. Ten (10) Days in Advance of Due Date

    If there are complicating issues that need to be resolved, such as research compliance matters, intellectual property rights, proposed publication delays or other sponsor review requirements, necessary legal interpretations, commitment of matching funds, securing of commitments for additional space to conduct the project, or a request for waiver of facilities and administrative costs (see Section .380), the DEADLINE for SUBMISSION OF PROPOSALS TO PreAward Services is ten (10) FULL WORKING DAYS in advance of any programmatic deadline set by the sponsor. This extra time is required to ensure adequate review and resolution, as well as to secure required signatures after resolution of issues.

    PAS will make every effort to properly review and process all proposals received with shorter advance timelines than stated above. When the time guidelines above are not met, such proposals may be submitted to sponsors without proper review, but with the understanding that the PI/PD accepts full responsibility. In this instance, if the proposal as submitted is later found to be in serious non-compliance with any regulations or programmatic guidelines, the University may have to withdraw the proposal. Should this occur, the University necessarily assumes no responsibility. This also applies should the proposal subsequently be rejected by the sponsoring agency due to non-compliance with Sponsor guidelines.

.250 Number of Copies of Documents Required

The number of originals and copies of documents to be forwarded to PAS depends on the type of document and the requirements of the sponsoring agency. A general guide is provided below; it does not include copies required by other units (such as departments, colleges, and experiment station). If there are questions about the number of documents a sponsor requires, please contact PAS.

"Original" refers to proposals with original signatures by the PI/PD and the appropriate University officials. "University" refers to the official file in PAS/SPA. Only a single original of the Sponsored Projects transmittal Sheet is required.

Proposal- number of originals required by sponsor*, plus one original for PAS

Proposed Award/Agreement/Contract (not yet signed by sponsor) - number of originals required by sponsor*, plus one original to be sent to sponsor and returned, fully executed, by sponsor to University, plus one copy for retention in PAS file

Award/Agreement/Contract**(already signed by sponsor) - number of originals required by sponsor*, plus one original for University

Proposed Modification (not yet signed by sponsor) - number of originals required by sponsor*, plus one original to be returned from sponsor to University, plus one copy for retention in PAS file

Modification ** (already signed by sponsor) - number of originals required by sponsor*, plus one original for University

* If uncertain, refer to guidelines or contact PAS.

** Some federal agencies (e.g., DHHS, NSF) make awards and modifications without requiring signature of university authority, although the original proposal requires appropriate signatures.

.300 BUDGET PREPARATION

All proposals should have a well-planned budget designed to achieve the objectives of the project. In this section, some guidelines are presented on items that might be included in a budget. It is advisable that the PI/PD consult with the PAS staff (or other appropriate unit offices) early in the proposal preparation process for advice on items that might be important for the design of the project. When a corporate or foundation sponsor does not require an itemized budget, the PI/PD should consider proposing a "fixed price" contract (see below).

Fixed Price Agreements:

A number of sponsors, especially foundations and corporate entities, may not require an itemized budget from the University. Although it is beneficial to construct such a budget in the design of the project and for use within the University, the PI/PD should not submit the detailed budget to the sponsor unless required. An alternative procedure to including a detailed budget is to develop a "fixed price agreement" (see Section .110). These agreements have very definite advantages to the PI/PD in that no details about direct or facilities and administrative costs are provided to the sponsor. Instead, the PI/PD quite simply agrees to perform a specific set of activities or deliverables for an agreed upon price.

DISPOSITION OF BALANCES IN FIXED PRICE AGREEMENTS:

In such fixed price agreements, internal arrangements are made as to the disposition of the awarded funds, and funds not required as direct or associated facilities and administrative costs may be transferred at the conclusion of the project (see Section .110) pursuant to the procedures outlined in PPM chapter 7050, section 210, "Close Out Procedures."

If a complete budget is required, specific attention should be given to the following budget categories:

  • Direct costs, such as:
    • Salaries and Wages of all Personnel
    • Employee Fringe Benefits
    • Service Charges for Specialized Cost Centers
    • Consultants and Subcontractors/Subrecipients
    • Tuition and Fees
    • Other Direct Costs
  • Cost Sharing, Matching Funds, and In-kind Contribution
  • Facilities and Administrative Costs

Each of these items is discussed below.

.310 Salaries and Wages

Generally, salaries of faculty members and other personnel are charged directly to the project for the percent effort devoted to the project. In some instances, salaries are cost-shared (see .370 below) to fulfill sponsor requirements. In either case, when a salary is charged directly to a project, or when it is committed as cost-sharing, the percent of effort should be proportional to the base salary; federal regulations (and those of other agencies) prohibit charging for more than the proportional share of a person's time. Salary in excess of full-time status (overload) is strictly limited by the Board of Regents policy and federal regulations (OMB A-21). Furthermore, when a project is sponsored by federal funds or federal flow-down funds, overtime compensation must be specifically provided in the agreement or approved in writing by the sponsoring agency. Institutional review and approval of overloads are delegated to the Vice Provost for Research.

Attention should also be given to limitations imposed by some sponsors on salary or on "percent of effort" that may be charged. While the guidelines of the sponsor usually address such restrictions, please consult PAS for the current status of such restrictions.

.320 Employee Fringe Benefits

All employees of the institution are eligible for fringe benefits which typically include: social security (FICA), retirement (including life and disability insurance), unemployment compensation, worker's compensation, health insurance, and sick/annual leave assessment. When charging a portion of an employee's time to a sponsored project, a pro-rata share of the employee's fringe benefits must also be charged directly to the project.

To assist in developing estimates of fringe benefits for proposal budgets, a summary of the current fiscal year rates may be obtained from the Research Home Page. Fringe benefits are broken down by employee status and by benefit category. All benefit categories are fixed percentages, except for the health insurance which is an estimated average. Although estimated fringe benefit rates are used in the proposal for budgetary planning purposes, the actual rates applicable at the time are charged to the project.

In a few cases, sponsors may place limits on the magnitude or the percentage of fringe benefits they will pay. In such cases, arrangements will need to be made by the department with the Payroll Section of Human Resource Services for charging the unrecovered portion; otherwise, the grant will be over charged on fringe benefits.

.330 Service Charges for Specialized Cost or Recharge Centers (Schedule of Charges)

When a department or unit of the University provides a service for a fee, the department/unit must establish a Schedule of Charges with the Controller's Office. The Schedule of Charges defines the service and states the fee charged for the service, and must include only the direct costs of providing the product or service. This would normally include the non-state funded salaries, wages, and benefits of employees directly involved in completing the work, plus any supplies, materials, and other contractual services used in the work. The fee should not include depreciation or administrative expenses as they are recovered through facilities and administrative cost components included in the university's facilities and administrative cost rate. Line items contained in budgets to extramural sponsors that propose the use of university service centers must be consistent with an approved schedule of charges and be verifiable prior to proposal approval. Policies and procedures relating to schedule of changes can be found in PPM chapter 3085.

.340 Consultants and Subrecipients

When preparing proposals for extramural funding that include a transfer of a portion of the research or substantive effort of the prime award to another institution or organization, or in seeking professional advice or services from external sources, a determination must be made during the proposal development stage as to the appropriate mechanism for this transfer of effort, or outside consultation.

The two mechanisms commonly used are the issuance of a subaward (sometimes referred to as a subcontract), or a consultant agreement.

A subaward, subgrant, or subagreement is a document written under the authority of, and consistent with the terms and conditions of a prime award (a grant, contract or cooperative agreement), that transfers a portion of the research or substantive effort of the prime award to another institution or organization.

A consultant is an individual hired to give professional advice or service for a fee but not as an employee of the hiring party. The term "consultant" also includes a firm that provides paid professional advice or service. Recipients of federal funds are expected to have policies governing their use of consultants that are consistently applied regardless of the source of support and are expected to justify using consultants instead of salaried employees.

When a subrecipient or a consultant is a "sole source" and the service is expected to exceed $5,000, the name of the source and the justification for the sole source are both required. "Sole source" justification may consist of:

  1. a statement or representation in the proposal that the named supplier/contractor is the only source for the desired supplies or services, or

  2. a statement in the proposal that the named supplier/contractor is uniquely qualified to perform the desired services because of location, reputation, and expertise. Most sponsors also require that justification be included in the proposal for the use of subrecipients and/or consultants.

IF THE SOLE SOURCE IS NOT IDENTIFIED IN THE PROPOSAL, BIDS MUST BE LET AT TIME OF UNIVERSITY'S RECEIPT OF AWARD. This is a standard purchasing mandate contained in both State and Federal laws and regulations. Note that a letter of commitment from the source is required at the proposal stage.

The fee for a consultant should be commensurate with the qualifications of the individual and the time devoted to the project and shall not exceed the daily equivalent of the maximum rate paid to a GS-18 (Executive Schedule Level IV) federal employee exclusive of facilities and administrative cost, travel, per diem, fringe benefits, and supplies. This rate is currently $453 per day and applies if federal funding is being used to fund the project. ALL COSTS FOR THE CONSULTANT SHOULD BE INCLUDED IN THE K.S.U. BUDGET AS A SINGLE LINE ITEM WITH THE FOLLOWING FOOTNOTE: "IN ORDER TO FACILITATE PAYMENT, CONSULTANT FEES, TRAVEL AND PER DIEM ARE COMBINED IN ONE PAYMENT."

Documentation is required at the initial proposal stage when submitting proposals for extramural funding that include requests for funds to support subcontract/subawards, and/or consultant expenses. The amount of documentation varies, but generally a separate budget detail for the proposed subcontract/subaward or consultant must be included, a statement of work detailing the responsibilities being contracted out, along with a "letter of commitment" from the outside entity that provides assurance of their intent to fulfill their obligations if the project is awarded.

A consultant agreement or a subaward will be prepared upon receipt and acceptance of the prime award by PAS if such was part of the original proposal. PAS will consult with the PI/PD concerning the statement of work, budget details, billing requirements, and other issues not detailed in the original proposal and will provide a draft copy of the agreement to the PI/PD for review before sending originals to the consultant or subrecipient for signature.

.350 Tuition and Fees

There are generally two circumstances in sponsored projects activity in which tuition and fees are an issue:

  1. when graduate students are involved, and
  2. when instruction is involved.
  1. GRADUATE STUDENTS: All sponsored project activity should include graduate students to the extent possible. When graduate students are supported by sponsored projects, tuition and campus privilege fees are to be charged directly to the project, if permitted by the sponsor. If the sponsor allows tuition to be charged, but not fees, then the latter necessarily become the responsibility of students. Graduate students who have 0.4 FTE (or greater) appointments, and meet certain appointment term requirements, as stipulated by Board of Regent policy, are eligible for tuition charged at the employee/staff rate. Graduate students who have teaching responsibilities associated with their appointment may be eligible for full or partial waiver of tuition depending on the FTE commitment and other terms of the appointment.

  2. INSTRUCTIONAL COURSES: For cases in which the ENTIRE COST of instruction is funded by a sponsor, tuition is not charged for student enrollment. "Entire cost" is defined as including the total direct (salaries, supplies, etc.) and facilities and administrative costs of the project. When the course is offered on campus, campus privilege fees must be borne either by the sponsor or by the student. Campus privilege fees are not required for courses taught off campus. If the course is administered by K-State Global Campus, the campus' administrative fee must also be charged to the grant.

When tuition and fees are quoted in a proposal, the most current rate or projected rate, whichever is appropriate, should be used in conjunction with a statement that "tuition and fees are subject to change without notice by the Kansas Board of Regents."

.360 Other Direct Costs

Other typical costs that should be considered in budget preparation are:

  • equipment
  • travel expenses, e.g., professional meetings; non-local research/project sites, etc.
  • expendable supplies
  • page publication charges
  • mainframe computer charges
  • costs of acquiring data (such as computer tapes)
  • long distance telephone charges
  • equipment repair
  • maintenance contracts
  • mailing and shipping expenses
  • copying/duplication/printing charges.

.370 Cost-Sharing, Including Matching Funds and In-Kind Contributions

Cost sharing, matching, and in-kind contributions are the commitment of university resources in support of a project beyond the funds provided by the sponsor. These funds may be required by the sponsor or may be offered to emphasize the University's commitment to the project.

This commitment may be from the University's resources, from a third party, or from a combination of both. Regardless of the source, the University is responsible for maintaining records that satisfy state and federal audit requirements.

Cost sharing or matching funds include:

  • salary and associated fringe benefits
  • unrecovered facilities and administrative costs
  • university contributions for other expenses associated with the project, such as travel, equipment, supplies, etc. (i.e. "hard dollar match")

Of these, salaries and fringe benefits are the most effective means of cost sharing because they are automatically recorded in the Personnel Activity Report (PAR). See PPM chapter 7070 for further information about PAR's. When there are "hard dollar" matches, those funds must be transferred to a "matching" account established by the Sponsored Projects Accounting Office at the time that a project is established.

The identification of all sources of matching funds is required at the proposal stage. Space for approval and commitment is provided on the Sponsored Projects Transmittal Sheet, Attachment .550 (Download) to indicate source(s) and amount(s) of hard dollar commitments. Authorized signatures from all contributing units must be secured in advance of submission of the proposal, all signatures are legally binding if the award is made by the Sponsor.

Contributions by a third party may include actual monetary contributions for project expenses (matching) or non-cash contributions (in-kind) such as services or the loan or gift of equipment. For third party contributions to qualify for cost-sharing, those items must be necessary to accomplish the project and allowable by the sponsor (sponsor would allow the cost to be charged to the project if they were paying the entire project costs). Third party contributions, whether monetary or in-kind, must be documented in the proposal by a binding letter of commitment or via an existing agreement which includes details.

.380 Facilities and Administrative Costs

All projects have two types of costs associated with them, DIRECT COSTS and FACILITIES AND ADMINISTRATIVE COSTS.

DIRECT COSTS are typically specific items that can be identified in line item budgets.

FACILITIES AND ADMINISTRATIVE (F & A) are other real costs incurred by the University and the project that are not so readily identifiable. In essence, facilities and administrative costs are "pooled research support costs", averaged over many users at the University that benefit from those facilities or services. These pooled costs, which are separated into two categories called facilities costs and administrative costs, include such diverse items as: research library expenses, computer facilities, electric power, building use and depreciation, heating and air conditioning of research space, janitorial services, research administration in departmental or college offices, etc. As these are clearly real costs that must be paid by sponsored program activities, it is critical that each project pay its appropriate share.

The federal government has established a mechanism for determining facilities and administrative costs that may be assigned to sponsored program activity; these are averaged for specific categories over the total costs incurred by the University. The percentage of the costs that may be assigned to research activities is determined relative to the total costs in that category for the University (e.g., the percentage of library costs associated with sponsored research vs. total utilization of the library). Based on combining the categories allowed by federal guidelines, an average rate (or percentage) of direct costs is used to determine each project's share of the facilities and administrative costs incurred by the University. It should be noted that all universities are capped at a 26% rate for the administrative cost component of the total F & A rate by federal regulations. The actual percentage rate used is periodically negotiated with the federal government, through the Department of Health and Human Services (DHHS) as the designated "cognizant agency" for KSU.

The OMB circular A-21 provides the cost principles for educational institutions, and contains the condition that the facilities and administrative cost rate that is negotiated with an institution's cognizant agency shall be consistently applied to all sponsored program activity at the University, including all NON-FEDERAL AND INDUSTRIAL SPONSORS. As DHHS sets the F & A rates for each fiscal year, these rates may change from year to year. A summary of the current University F & A rates is provided on the Reseach Home Page. A copy of the current facilities and administrative Cost Rate Agreement may be obtained from PreAward Services.

DETERMINING THE APPROPRIATE F & A RATE TO USE ON PROPOSALS

The rate to be charged to a specific project is determined by four factors:

  • Beginning date of the project period
  • Type of project activity
  • Location of project activity
  • Subcontracts and subawards

These are discussed below.

  1. Project Period

    F & A rates for the University are negotiated on a fiscal year basis. The INITIAL RATE IS DETERMINED BY THE FISCAL YEAR IN WHICH THE AWARD STARTS. For projects that extend beyond one year, BUDGETS SHOULD BE CONSTRUCTED ON A YEARLY BASIS FOR SUBSEQUENT YEARS, using the F & A rate applicable for that year. That is, appropriate F & A rates are generally known two to four years in advance per the agreement with DHHS, allowing the proper rate to be used for each budget year. Federal regulations require that budgets funded with federal funds utilize the rate in effect at the time of the initial award throughout the life of the sponsored agreement. "Life" is further defined as each competitive segment of an agreement. If DHHS revises the rate during the grant period, such that it could not have been anticipated in the original budget, direct costs will not be used to make up any shortfall in facilities and administrative costs caused by an increased rate.

  2. Type of Project Activity

    DHHS negotiates separate rates for research, public service, and instruction. The appropriate negotiated rate for the proposed activity must be selected to match the activity.

  3. Primary Location of Project Activity

    DHHS negotiates a separate F & A rate depending upon whether the project is "on-campus" or "off-campus." While most projects are conducted on-campus, the off-campus rate may be used when the project satisfies the following conditions which have been excerpted from the University's current F & A rate agreement:

    "For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s), the off-campus rate will apply. Grants or contracts will not be subject to more than one facilities and administrative cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project." Off-campus may be further defined as those activities occurring off-campus without use of, or access to, any on-campus facilities (office, laboratory, telephone, library, etc.).

    Projects performed at Kansas Agricultural Branch Experiment Stations carry a separately negotiated F & A rate. Projects in the College of Technology at Salina use the on-campus rate.

  4. Subcontracts and subawards

    SUBCONTRACTS and subawards may also affect facilities and administrative cost rates. The two possible scenarios are: 1) KSU as a subcontractor or subrecipient, and 2) KSU as the contractor subcontracting to other firms/agencies/etc. These are described below:

    1. KSU AS SUBCONTRACTOR or SUBRECIPIENT. When KSU is a subcontractor or subrecipient of another entity, such as a university, a firm, or an agency, the federally negotiated KSU F & A rate is applicable to the KSU budget. However, the contractor could have an F & A rate lower than the rate applicable to KSU, or could have negotiated a rate with the sponsoring agency lower than the KSU rate such that the contractor may request that KSU accept that lower F & A rate. The signed agreement between DHHS makes no exception for this, and hence the University has no obligation to accept the lower F & A rate. However, the University may, in unusual cases, consider this request to accept the contractor's request, in which case, the PI/PD should initiate the "variation of facilities and administrative cost rate" procedure discussed in section .390. Approval of such a waiver will be an exception.

    2. KSU AS CONTRACTOR. When KSU is the prime contractor for a budget that includes subcontracts or subawards, the appropriate KSU rate is assigned to the KSU portion of the project budget. With respect to subcontracts and subawards, the DHHS agreement specifies that KSU collects facilities and administrative costs only on the first $25,000 of each subcontract in KSU's budget.

Calculating Facilities and Administrative Costs on a Budget

The negotiated rates for KSU are based on MODIFIED TOTAL DIRECT COST (MTDC), which means that the rate applies to all direct costs of a project except:

  • Equipment (defined as having unit cost of $500 or more, AND a life expectancy in excess of one year)
  • Capital expenditures (land and building)
  • Charges for patient care
  • Tuition and fees
  • Rental Costs of off-site facilities
  • Scholarships and fellowships
  • That portion of each subcontract exceeding $25,000 per total award period

To establish the MTDC base to use in calculating facilities and administrative costs,

  1. Calculate the Total Direct Costs (TDC) of the project.

  2. Subtract items excludable from the MTDC basis (Items listed above) from the TDC base, producing the MTDC base.

  3. Multiply the MTDC base by the appropriate facilities and administrative cost rate in the table to obtain the facilities and administrative costs (F & A) to be charged to the project.

  4. The Final Total Cost of the project is the sum of the TDC and the F & A.

Sample Budget

A sample budget for a proposal is provided in Attachment .580 (Download), although this level of budget detail is not always necessary. Please consult with PAS or other appropriate unit early in the budget preparation process for advice and guidance.

.390 Request for Variation of Facilities and Administrative Cost Rate

The University, following Board of Regents' policy, requires that all sponsored program activity will recover the full total costs of conducting the project, including the full facilities and administrative costs. Furthermore, federal regulations (OMB A-21) state that the institution's negotiated F & A cost rate shall be consistently applied by the University to all of its extramural support activities regardless of the source of funds. The federal government states in OMB A-21 that "it does not in any way want to subsidize the F & A costs of our other sponsors, especially industry and foreign governments." This policy is based on the recognition that F & A costs are real expenses associated with the project and that these costs are the responsibility of the sponsor, and NOT of the taxpayers of Kansas or the Federal government. As expenses must be paid from the limited financial resources available to the University, F & A costs should be requested on all sponsored program activity. However, there are occasions when it is consistent with the mission of the University and in the best interests of the University, to grant exceptions to the full recovery of F & A costs on certain projects. Such exceptions may be granted by the Vice Provost for Research, subject to prior approval of the request by the department head and college dean.

With few exceptions, the "Request for Variation of Facilities and Administrative Cost Rate (Attachment .570)" form must be used when F & A cost rates other than the federally negotiated rate are being sought (Attachment .570) ((Download)). Exceptions are granted to those sponsors who by federal or state statutes or by Board of Regents agreement are restricted in the amount of F & A that they are able to reimburse.

Exceptions are also granted to certain foundations that have established rates that they apply as a matter of policy to all sponsored programs that they support nationwide without exception. It is also required that these support activities be commensurate with the academic mission of the University. In these cases, the University has made the determination that it will accept those projects without requiring a "Request for Variation of Facilities and Administrative Cost Rate" form.

It is university policy, as endorsed by the Council of Deans, that every sponsored project of any magnitude is obligated to recover all appropriate F & A costs on the project. However, it is also recognized that there may be special situations with respect to small projects. The most obvious situation is:

The sponsor is "philosophically" opposed to paying F & A costs, but may be amenable to a "fixed price" agreement (see Sections .110 and .300) where costs are not itemized. In such cases, F & A costs are integral to the fixed price (and noted in an internal budget agreement). Alternatively, the PI/PD should request "institutional research support costs" in an amount equivalent to the F & A cost.

The Request for Variation of Facilities and Administrative Costs Form, together with a copy of the proposal including the budget, must be submitted to the PAS Office TEN (10) DAYS prior to the submission deadline. The form requires the signatures of the principal investigator/project director, the cognizant Department Head, Experiment Station Director (when appropriate), and College Dean before it is submitted to PAS. Approval is granted by the Vice Provost for Research or designee.

Whenever a faculty member engages in informal discussions with a potential sponsor, ESTIMATES OF TOTAL PROJECT COSTS MUST INCLUDE FACILITIES AND ADMINISTRATIVE COSTS calculated at the appropriate rate. Failure to do so is not a justification to receive a waiver of F & A costs; this may result in a reduction in the scope of the project or the availability of direct costs. FURTHER, PI/PDs SHOULD NOT ENCOURAGE SPONSORS TO ASK FOR A WAIVER OF F & A COSTS.

As a general rule, waivers of F & A costs will not be granted to corporate sponsors, since the taxpayers of the state then legally act as co-sponsors of the project and that becomes public information. Needless to say, this can result in charges of unfair competition with other firms and agencies in the state. It should be recognized that industrial organizations are fully cognizant of the concept of F & A costs and the magnitude of these costs, as corporate F & A rates typically range in the vicinity of 200% of direct costs.

.400 CONTRACTUAL ISSUES

The following sections address potential contractual concerns that arise occasionally. These are: Insurance and Indemnification, Publications, and Intellectual Property (Inventions/Patents).

.410 Insurance and Indemnification

The State of Kansas is self-insured, which means that it does not purchase insurance through a private carrier. The state provides insurance coverage for KSU and its employees under this self-insurance plan. The state also provides representation and indemnification for KSU and its employees for negligent damage or loss to third parties, within the limits of the Kansas Tort Claims Act.

By statute, the state cannot purchase additional insurance coverage for its employees, nor can it purchase coverage for another party. When sponsors require insurance beyond the University's coverage, KSU takes exception to the requirement and PAS will negotiate alternative language or affix an asterisk by the authorizing signature and adding the following statement in an appropriate place:

"This contract is signed with the understanding that the State of Kansas' policy on insurance as shown in _______________ satisfies the insurance requirement."

In the above "blank," fill in the appropriate words, e.g., Attachment 1, Exhibit 1, etc. PAS will attach a document that outlines the limits provided by the State of Kansas.

.420 Publications

All university research and scholarly activity, including sponsored research, is governed by the tradition of free exchange of ideas and timely dissemination of results. Freedom to publish and disseminate results is a major criterion of the appropriateness of any research or sponsored project.

University policy precludes assigning to extramural sources the right to retain, or to make final decisions about, what should be published. However, the University permits a sponsor to request a short delay to comment on, or to review, publications for disclosure of proprietary data or for potential patentable inventions. Requests for delays in publication by a sponsor should normally be for no more than 90 days. Requests for delays are to be submitted in writing to the Vice Provost for Research for review and decision.

.430 Intellectual Property Rights(Inventions and Patents)

The University reserves the right to disclose and to disseminate knowledge and know-how gained through its research and sponsored program efforts. Therefore, the rights to patents arising from a sponsored project are normally retained by the University according to Board of Regents policy. However, under certain circumstances, the sponsor may receive the option as a prospective licensee of University-owned patentable inventions of commercial value.

Both KSU's patent policy, and the Board of Regents Policy from which it derives, are contained in section G80-G84 of the KSU Faculty Handbook and Chapter II, Paragraph D, Section 9 of the Board of Regents Policy and Procedures Manual, in addition these policies are also accessible through the research home page on the WWW. Under these policies, the rights to all intellectual property resulting from work performed using university facilities and personnel are assigned by Regents Policy to the University. The University Patent Advisory Committee reviews all requests for patent applications, and makes a recommendation to the Vice Provost for Research on whether the University should seek patent protection, or release the intellectual property rights to the individual.

If the recommendation is to seek patent protection, the University utilizes the services of the KSU Research Foundation (KSURF) under an operating agreement between KSU and KSURF, and assigns the intellectual property rights to KSURF to process on the University's behalf. KSURF evaluates the commercial potential and value, prepares disclosures for filings with the U.S. and International Patent Offices, and conducts negotiations with potential licensees.

If intellectual property rights are assigned to the sponsor, either directly as part of the research agreement, or later through negotiations, the University will consider delaying or sequestering publications, including theses and dissertations, for up to 90 days to allow for the filing of a patent application. All requests for sequestration of theses or dissertations are to be directed to the Dean of the Graduate School. All requests to delay publications should be directed to the Vice Provost for Research.

The Regent's Policy on Patents specifies that the inventors receive a minimum of 25% of the royalties paid by the licensee. The KSURF Board established that a higher percentage of the royalties are to be paid to the inventor, with an additional allocation of the royalties to the inventors' department to support research. According to Regents Policy, and the federal Bayh-Dole Act, the remainder of the royalties received are to be used for further research at the University, although the University may agree to allow KSURF's retention of a portion of the royalties to underwrite patent and commercialization expenses.

If an invention or discovery is funded, even partially, by federal support, the University is required to notify the federal sponsor, generally within a time period of two (2) months of discovery. PI/PDs and their department heads and chairs are required to notify PAS of such disclosures.

.440 Data Access and Retention

The University incurs significant legal obligations regarding "data" created by its faculty, staff, and students in the performance of sponsored projects regardless of the funding source. The University must ensure that original technical data is maintained in a manner that facilitates timely access and secure retention. As a result, all original data (including laboratory notebooks) must be retained by the laboratory, department, program, or other appropriate University unit when faculty, staff, or students involved in a project terminate or interrupt their formal affiliation with the University.

.450 Questions

Questions relating to the these Policies and Procedures are to be directed to the Office of Pre Award Services at (785) 532-6804.