A contract is an exchange of promises that gives rise to legally enforceable rights and duties. A contract is usually a binding agreement under which the sponsor provides funding for a proposed program in return for a product (e.g., services, scientific report). Contracts are specific in the nature of the work to be done, the manner in which it is carried out, and the conditions of termination. Under a fixed-price contract, the sponsor and the University agree in advance on the price of the work to be done. A cost-reimbursement contract reimburses the University for actual costs of conducting the project. With a contract, the idea originates with the sponsor; a contract is often referred to as a procurement.

Cost reimbursement contracts provide for payment of allowable incurred costs, to the extent prescribed in the contract. They establish an estimate of total costs for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed. Cost reimbursement contracts are used when uncertainties are involved in contract performance which do not permit costs to be estimated with sufficient accuracy to use a fixed-price contract.

Fixed-price contracts provide for a firm price or, in appropriate cases, an adjustable price. If providing for an adjustable price contract, they may include a ceiling price, a target price, or both. Unless otherwise specified in the contract, these prices are subject to adjustment only by operation of contract clauses providing for equitable adjustment or other revision of the contract price under stated circumstances.

A fellowship is a stipend awarded to a pre- or post-doctoral student to allow training or advanced study in research. Fellowship awards may also include an institutional allowance to pay for some of the costs related toward that fellows research or training.

A subcontract is a contract between the University and a prime grantee or prime contractor for the provision of goods or services which the prime grantee or contractor is unable to provide. This may be done either by a purchase order or by a contractual agreement, and will include the applicable regulations of the prime funding agency as well as the requirements of the prime recipient.

The PI is the individual ultimately responsible for the appropriate scientific and financial conduct of a sponsored research project. On occasion, there may be co-principal investigators who share responsibility for the project.

A program administrator is the coordinator of a program involving more than one project.

Direct costs are those costs that can be identified specifically with a particular sponsored research or training project. These costs include, but are not limited to: salaries and wages, employee benefits, consultants, animal care and use, radioisotope use and disposal, supplies and expenses, travel, equipment, publication costs, and off-campus rent.

F&A is an acronym for facilities and administrative costs, also known as indirect costs or overhead. F&A costs are those costs that have been incurred for common or joint objectives and that cannot be identified specifically with a particular project. These include costs of supporting activities such as maintenance and operations of the physical plant, use allowance for buildings and equipment, general, departmental, and sponsored projects administration and expenses, and library and student services.

F&A is generally assessed based on costs incurred for the project. However, for Industry Clinical Trials awards, F&A is assessed based on payments received. For specific inclusion and exclusion for F&A assessment, please refer to the UCSF F&A Base Codes

Revenue: that which is earned in consideration of fulfilling the terms and conditions of an agreement. For example, when the milestone is completed, revenue is earned as billing (invoice) is generated in Research Administration System. Revenue is a component of the income statement, along with expenditures and unexpended balance.

Cash: It is an asset on the balance sheet. It is the primary instrument used to compensate a party for fulfillments of the terms and conditions of an agreement, usually currency, checks, and wire transfers. For example, sponsor pays for the invoice generated based on the milestone completion.

An un-liquidated obligation is defined as a cost that is approved in the budget of the current reporting period, but not expected to be incurred until the next reporting cycle. In other words, there is an overlap between the approved budget period and the approved expenditure accrual period. However, on the final financial status report, this line item should be zero.

Generally, the fund year designation is determined by financial reporting cycle. For example, if a five-year award has an annual reporting cycle, the fund will be set up with five fund years; if, on the other hand, a five-year award requires only one financial report at the end of the five-year cycle, the fund will be set up with one fund year.

Fund years are never assigned to special state appropriations, intramural 199xx general fund awards, UC Discovery matching funds, and other non-RAS awards. Please refer to the following fund year matrix:

Review instructions here

Review instructions here

The RSA contact on the award profile page is the first point of contact for many of the pre- and post-award administrative management activities on sponsored project funds, including, but not limited to:

• award setup
• draft financial status reports
• close-out notifications
• final invoice review and PI signoff
• overdraft enforcement

To update the RSA assignment in RAS, please follow these steps:

• Go to PeopleSoft and navigate to Grants > Awards > Project
• Enter the specific project ID.
• Hit the Project link
• Go to the Project Department tab
• Replace the current Project RSA employee ID number with the new RSA employee ID number
• Save

NOTE: The ONLY way to change the RSA name at the award level is to change the RSA name on the primary project.

Read the executed award documents in RAS.

If the documents state that the carry over is automatic, contact EMF to reduce the budget in the prior reporting cycle and increase the budget on the current reporting cycle.

If the award documentation indicates that a prior approval needs to be made by the sponsor, work with the Office of Sponsored Research to get the approval from the sponsor, and reflect the approval in RAS. Once the sponsor approval is available as a document in RAS, EMF will be able to reduce the budget in the prior period, and increase the budget in the current reporting period.

Financial reports submitted prior to November 2009 are filed in EMF. Please contact EMFFSR@ucsf.edu to obtain a copy.

Financial reports submitted after November 2009 are filed in the PeopleSoft research administration system (RAS) award. Navigation: Grants > Awards > Award Profile > FSR Documents

Fill out an Official Statement Relinquishing Interests and Rights in a Public Health Service Grant, Form PHS-3734, along with an estimate of the total unobligated balance.

An official from the Office of Sponsored Research must sign off on the relinquishment statement, and submit it to the federal sponsor. The final FFR can be filed when the sponsor agency issues a revised notice of grant award (NOGA).

Payments for sponsored projects must be sent to EMF for deposit and recording into the Research Administration System (RAS). This allows systematic matching with existing invoices and Accounts Receivable in RAS.

If a department receives a payment directly from the sponsor:

• DO NOT prepare a journal for recording into the General Ledger
• Deposit the payment using the drop-safe located on various campuses
• Email a copy of the deposit slip, the check, and its back-up papers to EMFCollections@ucsf.edu or FAX them to EMF Cash Management at 415.502.1444
• Or send the check to the Controllers Department, EMF Cash Management, Box 0897

Contact the sponsor as soon as possible and have future payments sent directly to:

UCSF Controllers Office
Extramural Funds
1855 Folsom Street, Suite 425
San Francisco, CA 94143-0897

Where UCSF is the subcontractor and another UC campus is the prime, EMF prepares an invoice and labels "ICR" through RAS and sends an intercampus journal to the sister campus. The invoice amount from UCSF and the eventual payment from the sister campus is captured in the RAS Invoice/Payment Reconciliation Report as shown below.

Tips on reading the RAS Invoice/Payment Reconciliation Report are located on the Sponsored Projects Training tab of the Controllers Office web site.

You need to navigate to different inquiry reports in WebLinks to verify the level of stop code:

Fund Level
Inquiries > Chartfields > Fund
Enter the fund number, then drill down. The attribute Stop Cd should be Active, and the Reapprop Cd should be 4.

Fund – FY Level
Inquiries > Chartfields > Fund
Enter the fund number, then drill down. All of the fund year parameters are listed at the bottom of the page. The StpCd attribute should be Y, followed by the date of the stop code implementation. There should be NO changes whatsoever the fund reappropriation code.

Fund – FY – DPA Level
Inquiries > Chartfields > DPA/Fund/FY
Enter the fund number followed by an asterisk. The attribute Stop Cd should be Y. A stop code at the fund-FY-DPA level is used only for RAS errors, or in situations where a fund-DPA combination is not going to be used in a competitive renewal cycle.

Fund – DPA Level
Inquiries > Chartfields > DPA/Fund
Enter the fund and DPA. The attribute Stop Code should be Y, followed by the date of the stop code implementation. A stop code at the fund-DPA level is used only for non-RAS combinations, usually special state appropriations or intramural 199xx general fund awards, but can also be used for 09xxx opportunity funds, 6xxxx discretionary funds, and any other non-RAS fund-DPA combination with a $ 0.00 balance at the fund-DPA level.

Send an e-mail request to the EMF closeout team. Depending upon the nature of the transaction, the stop code may or may not be lifted.

Accounts Receivable balances are considered for write-off at 180 days:

• Charge department for uncollectible invoices (reverse expenses) due to departmental issues, such as:
• Untimely progress report
• Late billing by department
• Disallowed costs by sponsor
• Sponsor not financially viable


• Charge central for uncollectible invoices for issues such as:
• Late billing by EMF
• EMF billing error that resulted in inability to collect

There are two completely unrelated reasons for why the F&A on the award does not match the F&A in RAS or the account-fund profile:

1. The F&A for private industry clinical trials is calculated against gross receipts, not expenditures. The mathematical calculation is a two step process: take gross receipts and divide by the F&A rate, then multiply the XXXXXX by the F&A rate. Our system cannot perform this two-step calculation, so the rate is a "substituted" rate. Please refer to the base codes page for details and examples of how this is done.



2. If an award has more than one project, each project can have a separate F&A rate. To verify the F&A rate at the project level, go to the award profile page, and hit the Project F&A Rate link. The F&A rate on the fund inquiry in the account-fund profile refers to the F&A rate for the primary project, but it is RAS that actually calculates F&A.

An edit to the Accounts Payable system prohibits any vendor payment that is entered more than sixty (60) days of the expiration date of a fund or fund year.

This is related to the new stop code functionality regarding summary reports. Please refer to the notification to the campus on the February 28, 2011 edition of the Controllers Office newsletter.

WebLinks Enhancements
On March 1,2011 the following WebLinks enhancements will go into production:

1. An option of Fund Stop Code on the Expenditure Summary by NCA Group, Fund Summary, DPA Summary, Research Financial Summary by Fund/FY, Balance Sheet Summary, and Revenue Summary will allow users to filter information as follows:
   • Yes - to only report inactive funds, those having a stop code
   • No - to only report active funds, those that DO NOT have a stop code
   • All - to report all funds (same as the report before the enhancement)
   Note: A stop code prevents transactions from being posted to a fund.



2. The DPA/Fund inquiry now includes columns to indicate if the DPA/Fund coupling has a stop code and the date the stop code went into effect.

No, they are not since the sponsor pays the University a fixed sum of money to provide a deliverable, service, or specified level of effort. A fixed-price contract disregards the actual costs incurred by the University to perform the service or deliverable.

However, the pricing of the contract itself is subject to Federal Acquisition Regulation (FAR) on the development of the cost and pricing. For fixed-priced agreements, you should use OMB Circular No. A-21 as a guide to determine the allowable costs of the project. Use of A-21 at the proposal stage will ensure that cost estimates are comparable to budgeting procedures used with other University contracts and will provide a basis for determining the reasonableness of the total contract price.

Reference: UCOP Contract & Grant Manual 7-510 Applicability Of Federal Cost Principles

Vacation taken and reported in HBS timely will allow EMF and departments to complete billing, financial status reports (FSRs), and closeout timely and accurately. Late submission of vacation taken may cause additional reconciliation, re-filing of FSRs, and payments back to our sponsors.

Impact While the Award is Active: Assessment charges for vacation earned will post to the award in the month the vacation was earned. Relief credits for vacation taken will post to the award around the end of the month following the month the vacation was earned or reported in HBS (approximately 30 days later).

Impact When the Award Expires:

• Within 90 days following the Expiration Date: If an employee is reporting vacation usage timely, all credits will post correctly to the award.
• 90 days after the Expiration Date: If an employee takes vacation while the award is active but reports via HBS 90 or more days beyond the expiration date of the award, credits resulting from the late vacation usage reporting may need to be returned to the sponsor.

Program income must be expended before sponsor funds are expended therefore there should seldom, if ever, be remaining program income. If, for some reason, there are remaining program income funds they must be returned to the sponsor as unspent funds.

A sponsored project program income account is established in the 67xxx fund range. All program income revenue and recharge credits are deposited (recorded) in this fund. The program income budget is appropriated equal to the program income revenue/recharge credits generated by the project. In nonresearch projects (deductive method) where the program income reduces the funding from the sponsor, the sponsored fund budget is reduced by the amount of program income.

The sponsor and sponsored award determines the treatment of program income. The award may also incorporate project-specific or program-specific requirements, such as program regulations, that may address program income accountability. If the award does not specify the required treatment of program income, the additive alternative will be applied to research programs and the deductive alternative for non research programs. The award may also specify whether a grantee is accountable for program income earned after the end of grant support. If the award is silent on that point, the UCSFs accountability ends at the conclusion of the project period and associated final reporting.

UCSF (i.e. the PI) must maintain records that adequately identify program income and controls that ensure the timing of use and eligible uses comply with award terms and conditions. In most cases, UCSF must also report to the sponsor in its financial, cash management, and other reports when program income is earned and spent. If UCSF is accountable for program income earned after the end of the project period, the PI should consult with the sponsor on how to account for and report the program income unless it is specified in the award (e.g., income from patents and copyrights).

Yes. Under Office of Management and Budget Circular A-133, Section J. or other HHS audit requirements, a grantees use of program income will be reviewed for compliance with the terms and conditions of award, including allowability of costs, financial management, and reporting.

Program income on federal awards that is earned, expended and unexpended is reported on Standard Form 425, Federal Financial Report (SF-425). For other awards, program income is reported on the sponsor financial report or equivalent. Reporting of program income resulting from patents and inventions is handled differently. (See FAQ below.)

Money that would be payable to the sponsor as compensation for its share in the original acquisition cost of the property is usually treated as an offset to expense on the sponsored project. Although, in these cases, the effect would be the same as the deductive alternative during or after the period of grant support.

It is very important, particularly in projects that generate (or have the potential to generate) significant amounts of program income. If income is to be used under either the deductive or matching alternatives, the sponsor will determine its funding based on these projections. Overfunding or underfunding a particular project can have an adverse impact on that project or on the program, in general, if later adjustments are necessary and amounts must be paid back or funds are not available or their use is otherwise restricted.

Yes. The awarding office must always review the specific aspects of a given project and organization to determine the terms and conditions of that award. For example, if a grantee has been designated "high risk/special award conditions," an award may include program income provisions that differ from those that might otherwise apply.

Under any of the program income alternatives, funds may be used only for eligible costs as specified in the governing statute, regulations, costs principles, notice of grant award, as well as University of California policies and procedures on direct costing. However, under the additive alternative, the awarding office may allow a grantee to use program income for eligible costs that might not be expressly allowable under the terms and conditions of the award. This is a case-by-case determination based on a grantees documented request and review by the awarding office. An approval will indicate if there are conditions associated with the level, timing, or reporting of the expenditures.

Yes. Regardless of the applicable alternative, a grantee must use program income on hand to defray eligible program costs rather than drawing funds from the HHS payment system for those costs. This would be the case for matching or cost sharing met from program income sources although if the grantee were meeting a matching or cost sharing requirement from other sources, it would not be required to provide its matching or cost sharing prior to drawing HHS funds.

The federal definition of program income includes income generated from license fees and royalties on patents and copyrights. Unless the terms of the sponsored project to UCSF specifically state that income generated from license fees and royalties on patents must be reported as program income, UCSF has no obligation to account for such income as program income.