Moving to the Top: Establishing Your Research Program at BWH MODULE 5: Money: How to Spend it January 28, 2010

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1 Moving to the Top: Establishing Your Research Program at BWH MODULE 5: Money: How to Spend it January 28, 2010 Recommended Reading: Chapter 4, Academic Scientists at Work TOPICS: 1) Get to know your research administrator Make sure you receive a copy of your grant award statement Make sure you know the rules as they apply to your specific grant award 2) Get to know your Division/department administrator What are they doing about the financial administration of your grant? Is it sufficient? Make sure it is reported to you What tracking system are they using maybe it s good for you, too. Have institutional reports sent to you use Insight Check on the close out process of each grant year who is doing it; should you be doing it? Make sure you are in the loop 3) Sign up for Insight o insighthelpdesk@partners.org request Insight Access in subject field. 4) Forecast 5) Direct, Indirect and Total $S of Grant Award: On modular grant applications, the exact amount of indirect costs is stated on the checklist page. This amount is calculated based upon only those direct costs that generate indirect cost charges based upon your detailed budget page, which is completed for research administration. This is the amount that the NIH should award you. For help in calculating exclusions from indirect cost figures, Research Management has a template at Modular%20Exclusion%2025K%20MASTER% xls Be conservative when you budget for items such as equipment and animal charges that don t accrue indirect costs. If you budget more than you end up expensing, you will end up using some of your direct costs to cover indirect costs on other items. ALL the money is awarded to you. If you have indirect costs left over, they are your to spend. If you don t have enough indirect costs, you will have to give up some of your direct costs to cover this. RESOURCES: Purchasing: materials411@partners.org or

2 IS helpdesk: When the NIH or any other granting agency awards you a grant, PHS Research Management handles the actual set up of funds and all that goes with it. You, however, are ultimately responsible for the proper use and expenditure of this money. You must know how your money is being spent, what types of expenditures are allowable, whether you will have money left over at the end of your budget year, or, if you erred and you have spent too much money, what you are going to do about that. Ultimately, when you have completed your entire research project, you want to have appropriately spent all the money awarded, but not go overbudget. Any deficits you incur in the course of your research must come from your own research sundry funds or departmental funds. Help is Available Although you are ultimately responsible for your grant, you are not on your own. There are helpful departments, people and resources available to you. Important Departments PHS Research Management Department/Division Administrator Purchasing Accounts Payable PHS Research Management The people at Research Management are important partners for all aspects of grant management, from the initial application process through to the closeout of your grant. It is important to create a friendly and cooperative relationship with Research Management to make sure your grant is properly managed. Your contacts there will become a very important informational resource on all aspects of being a Principal Investigator. They can answer many questions and help you solve many problems. Contacts will include your Pre-award Grant and Contract Administrator who will help you properly submit your grant applications and progress reports, your Post-Award Grant and Contract Administrator who will help you set up your newly awarded grants and manage finances during the project period, and Research Finance Accounting Representatives who will help you with financial reporting, billing, and close out of the fund when the award is complete. Some Questions for Research Management: What happens if I have money left over at end of my grant year? What is the indirect cost rate? What is an indirect cost rate? Does my grant operate under esnap progress reports procedures? Division/Department Administration Another informational resource is your division/department administrators. Again, it is important to create a positive, cooperative working relationship. These people 2

3 know the institutional rules and structure. They can help advise on how to find answers to questions and how to solve problems as related to our institution. Some Questions for the Division Administrator: How do I order something by setting up ebuy access? How can I get regular reports on my grant expenditures? How do I go about hiring a new postdoc? Other staff? There s an error on my monthly report. How do I get it corrected? How do I get Insight access to keep real-time track of my grant expenditures? Biomedical Research Institute Services & Communications (BRISC) These meetings strive to inform the BWH research Community of updates relating to Research and each month features individual topics of interest and relevance to the broad, basic, translational and clinical research community. Lead by Barbara E. Bierer, MD, Senior Vice President of Research; these monthly meetings are useful to Grant Administrators and interested Principal Investigators. Any institutional policy and procedural changes that affect research operations will be highlighted in this meeting. Dept/Grant Numbers Do Not Change: This is the fund assigned by Research Management to your grant. It is also known as the Peoplesoft number. One number is assigned for the entire project period for each grant. The number assigned at the beginning of your award will remain to end of total project period. Once your grant has ended, the cash balance in this fund must be brought to zero before it can be closed out. Money left over must be returned to the sponsor or, if allowed by the sponsor, transferred to a research sundry. Any deficits must be paid off within 3 months of the grant s ending through your research sundry or departmental funds. Institutional Reports: Insight Available online Real-time Complete picture of your expenditures including encumbrances for POs and Salaries Document Direct Paper or online Not real-time Snapshot: once a month 3

4 Insight Research Portal Real-time reporting is currently available through the Insight Research Portal. You can gain access to all your grants online by sending an request to Insight Research Portal is a web-based application with over 9000 current users developed for the entire research community (including investigators, departmental research managers, unit chiefs, and administrators) to review, monitor and manage the research portfolio. It was originally designed by a collection of working groups consisting of departmental administration (Radiology, Surgery, Medicine, etc.), central research management operations (Grants and Contracts, Research Finance, IRB, etc.), lab managers as well as investigators. It has allowed departments to discontinue investment in costly 'shadow systems' and has empowered researchers and their staff to understand where they stand in their research program 24 hours a day, 7 days a week. It has also alleviated the need for central administration supporting these departments to answer routine calls and focus on the ever-growing complexities relating to compliance and research oversight activities. Document Direct Document Direct gives you monthly reports, but they show only what expenditures have been paid out. They do not show what has been ordered but not yet paid for or what other funds such as salary that has been committed. Monthly reports detail paid expenditures for that month and cumulative summary information for the grant year. They are available on paper and online through software called Document Direct. You can contact your Department/Division Administrator to arrange to have access to this system. Through Document Direct, the detailed ledger is available within two weeks of the close of the month. The summary ledger is also available about 2 weeks after close of month. Accounts Payable reports are usually available just a day or two after the month end. Full paper reports arrive about three weeks after close of month.non-competitive Renewal At 9 months into your grant year, you must be able to answer the question: Do you expect to carry forward to next year a sum greater than 25% of the total award for this budget year? This is when you must prepare your non-competitive renewal, which is due to the NIH and most other sponsors 2 months before the end of the current budget year. Before you can submit the report, it must be reviewed by your department/division and by Research Management. Generally, you must allow 2 weeks time for their review. If you add another 2 weeks for preparation of your report, you need to know the financial status on your grant 3 months before the close of that budget year. If it takes 2 months to see your expenditures pass through your institutional reports, and since they do not forecast additional committed costs (animal per diem, salary being 2 big categories), you must know for yourself how much money you have spent when you begin the final three months of your grant year. This is a very good reason to make sure you have Insight access to your grants so that it can help you project 4

5 these costs. Not all grants allow you to carry forward unexpended funds. In these situations, it s even more important that you know what you re spending. If you have money left over, you will lose it. If you over spend, you risk the future of the remainder of your grant. Some examples: NIH SCOR grants or any other NIH grant that does not follow esnap rules. Milton Fund awards. Report of Expenditures After close of budget year, you must do a Report of Expenditures with Research Finance. They send you a report about 2 1/2 months after the close of budget year. You must review for accuracy, note any changes that need to be made to expeditures, and advise them how to handle credit or deficit balances. Direct, Indirect and Total Costs Indirect cost rate: 75% (Currently in negotiations for new rates beginning FY09) Total Direct Cost (TDC): $200,000 Indirect Cost (IDC): $135,000 TOTAL Cost (TC): $335,000 Not all expenditures have indirect costs charged to them. Modified Total Direct Costs (MTDC) include all direct costs except equipment, alterations, renovations, sub-contract expenses after the first $25K, patient care costs, and animal related expenditures. Note: an Animal Facility Fee of 50% is taken on all direct animal expenditures. You have been awarded TOTAL Costs. If you purchase a piece of equipment that you have not included in your budget calculations, there will be no indirect costs charged, so you will have indirect costs that are unspent. If your grant allows this type of rebudgeting, these dollars can be spent as direct costs, but don t forget to account for the indirect cost charges as well. What this means is you must be able to recalculate your actual direct costs and indirect costs, not just what was originally awarded. Carryforward Example: Carryforward or Deficit? Grant Award: Total Direct Costs (TDC) $200,000 DC with no overhead (Exclusions) Animals $10,000 Equipment $10,000 Modified Total Direct Costs (MTDC)$180,000 Indirect Costs (IDC),75% of MTDC $135,000 TOTAL AWARD (TDC + IDC) $335,000 Carryforward or Deficit? Expenditures: TDC Spent $200,000 Exclusions: Animals $14,000 Equipment $15,000 MTDC $171,000 IDC (75% of MTDC) $128,250 Direct + Indirect Costs $328,250 5

6 Carryforward Grant Award: $335,000 Total Expenditures: $328,250 Carryforward: $6,750 Direct Costs $3,857 Indirect Costs $2,893 Deficit Example: Carryforward or Deficit? Grant Award: TDC $200,000 Exclusions Animals $10,000 Equipment $10,000 MTDC $180,000 IDC (75% of MTDC) $135,000 TOTAL AWARD $335,000 Carryforward or Deficit? Expenditures: TDC Spent $200,000 Exclusions: Animals $8,000 Equipment $2,000 MTDC $190,000 IDC (75% of MTDC) $142,500 Direct + Indirect Costs $342,500 Deficit Grant Award: $335,000 Total Expenditures: $342,500 Deficit: ( $7,500) PI is responsible to cover this amount from Sundries or other discretionary funds. If a PI does not have a Sundry fund, his/her department must cover the deficit. Salary Keeping track of salary costs is a big reason for keeping a constant eye on your grant finances. At first, it will be pretty straightforward. You just have to calculate yourself plus the fringe rate. However, once you have more than one grant, your salary may be on more than one funding source. They will most likely have different budget cycles, and your pay raise will most likely have a different budget cycle as well. So you can t just budget your current salary of $70,000 for grant year plus the fringe. It will get more complicated than that. Salary has fringe charged to it. FY08 rates are below: 35% faculty, research associates 32% staff, technicians 27% fellows, interns 6

7 Rates are expected to increase by approximately one percentage point in each category in upcoming years. PIs should build this into grant applications in development. Regardless of the fringe rate budgeted in the grant, the actual Hospital rate is always what is expensed to the grant. Funding sources and % effort of salary on a particular funding source may change during the course of the year. If your a new grant is funded, you will redistribute some of your salary and related effort onto this new grant. Sometimes these changes get made at the last minute and they do not always get into the payroll system in the month they are supposed to occur. The only way to be sure all the debits and credits that will occur in your account (both in the salary and fringe categories) have happened correctly is if you have kept a record of what should happen. Useful Websites, Contacts NIH Grant Forms: NIH Grant Policy Statement: esnap use for annual Progress Reports for NIH Awards: NIH Grantee Institutions have the ability to electronically submit SNAP progress reports for most awards. This system provides grantees the ability to enter data into forms as well as upload files for the progress report and other supporting documentation. For more information on esnap, visit the era Commons at: commons/index.jsp. If you are using the NIH esnap to electronically prepare and submit your noncompeting (T-5) SNAP progress report, do not use the PHS 2590 fillable form pages for any file uploads. Text inserted into the fillable form pages is not saved once the progress report is submitted to NIH. Guidance on esnap submission is documented in the esnap User Guide found at: Questions on esnap submission should be directed to: AHRQ, CDC, FDA and IHS do not participate in the esnap process. To gain access to the NIH era Commons, contact your Pre-Award Grant and Contract Administrator in Research Management. As part of the progress report, grantees must answer the following questions: Has there been a change in the other support of key personnel since the last reporting period? If so, the change(s), including termination of a previously active grant or activation of a previously pending grant, must be explained. If not, the grantee must so state. Will there be, in the next budget period, a significant change in the level of effort 7

8 for key personnel from what was approved for this project? A significant change is a 25 percent or greater reduction in time devoted to the project. If so, the grantee must explain; if not, the grantee must so state. Does the grantee anticipate that it will have an estimated unobligated balance (including prior year carryover) that will be greater than 25 percent of the current year s total budget? If so, the grantee will be required to explain why there is a significant balance and how it will be spent if carried forward into the next budget period. If not, the grantee should so state. The IC will rely on the grantee s assessment of whether significant changes have occurred or will occur in these areas; however, the GMO may require additional information In order to evaluate the project for continued funding. Failure to provide this Information will result in a delayed award. Brigham and Partners Websites and Contacts PHS Research Management: BWH BRI Research Intranet: Purchasing: Customer Service Purchase Order Fax Line Online Ordering via ebuy: Accounts Payable: Customer Service:

9 NIH Research Project Grant Program RO1 The Research Project Grant (R01) is the original and historically oldest grant mechanism used by NIH. The R01 provides support for health-related research and development based on the mission of the NIH. R01s can be investigator-initiated or can be in response to a program announcement or request for application. The NIH awards R01 grants to organizations of all types (universities, colleges, small businesses, for-profit, foreign and domestic, faith-based, etc.). The R01 mechanism allows an investigator to define the scientific focus or objective of the research based on a particular area of interest and competence. Although the Project Director/Principal Investigator writes the grant application and is responsible for conducting the research, the applicant is the research organization. Definition of an R01 The Research Project (R01) grant is an award made to support a discrete, specified, circumscribed project to be performed by the named investigator(s) in an area representing the investigator's specific interest and competencies, based on the mission of the NIH. Allowable Costs Salary and fringe benefits for Principal Investigator, key personnel, and other essential personnel Equipment and supplies Consultant costs Alterations and Renovations Publications and miscellaneous costs Contract services Consortium costs Facilities and Administrative costs (indirect costs) Travel expenses Application Characteristics Applications for an R01 award are not limited in dollars but need to reflect the actual needs of the proposed project. Modular applications are most prevalent with modules of $25,000, up to the modular limit of $250,000. U.S. applicants requesting more than $250,000 in annual direct costs and all foreign applicants must complete and submit detailed budget requests using the Research & Related Budget component found in the application package. Applications are generally awarded for 1-5 budget periods, each normally 12 months in duration. Applications can be renewed by competing for an additional project period. Supplements and amendments are allowed. Only two revisions of a previously reviewed R01 grant application may be submitted. The Research Plan (Specific Aims, Background and Significance, Preliminary Studies, and Research Design and Methods) of an application for an R01 follow the

10 instructions provided in SF424 (R&R) Application Guide, at Applicants may also find it helpful to seek advice from an experienced investigator and to contact the Institute or Center most likely to fund their application. NIAID provides an annotated R01 and attached summary statement on its Website Standard receipt dates for grant applications are February 5, June 5, and October 5. AIDS and AIDS-related grant application receipt dates are May l, September 1 and January 2. For additional information, the receipt, review and award cycle schedules are posted on: 1.B. Eligible Individuals Any individual(s) with the skills, knowledge, and resources necessary to carry out the proposed research as the PD/PI is invited to work with his/her organization to develop an application for support. Individuals from underrepresented racial and ethnic groups as well as individuals with disabilities are always encouraged to apply for NIH support. More than one PD/PI, or multiple PDs/PIs, may be designated on the application for projects that require a team science approach that clearly does not fit the single-pd/pi model. Additional information on the implementation plans and policies and procedures to formally allow more than one PD/PI on individual research projects is available at All PDs/PIs must be registered in the NIH era Commons prior to the submission of the application (see for instructions). The decision of whether to apply for a single PD/PI or multiple PD/PI grant is the responsibility of the investigators and applicant organizations and should be determined by the scientific goals of the project. Applications for multiple PD/PI grants will require additional information, as outlined in the instructions below. The NIH review criteria for approach, investigators, and environment have been modified to accommodate applications involving either a single PD/PI or multiple PDs/PIs as indicated below. When considering multiple PDs/PIs, please be aware that the structure and governance of the PD/PI leadership team as well as the knowledge, skills and experience of the individual PD/PIs will be factored into the assessment of the overall scientific merit of the application. Multiple PDs/PIs on a project share the authority and responsibility for leading and directing the project, intellectually and logistically. Each PD/PI is responsible and accountable to the grantee organization, or, as appropriate, to a collaborating organization, for the proper conduct of the project or program, including the submission of all required reports. For further information on multiple PDs/PIs, please see