Effort & Travel on Sponsored Programs
Grant vs. Donation
Salary Corrections
Program Income
PreAward Cost
Cost Overruns


Effort & Travel on Sponsored Programs:
With the implementation of Cost Accounting Standards, the University needs to track all expenses associated with Grants and Contracts. This includes not only the charges on the Grant or Contract but all contributed effort or charges. UND must be able to account for all commitments made in a proposal even if we are not required to report them to the sponsor. Therefore be aware that if you are including time and effort for UND faculty or staff in a proposal, they will be required to certify to their effort through our Personnel Activity Confirmation System.
This also is applicable to travel on Grants and Contracts. If an individual is traveling on a grant or contract they will also have to certify to their effort on that project.

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Grant vs. Donation:
This checklist is intended to assist staff with the appropriate classification of external support. Some judgement will be required to classify an award if items are checked in both areas. Each award must be considered in the whole rather than any single element. This checklist is not intended for Direct Federal Grants & Cooperative Agreements.

Grant, Contract, or Cooperative Aggreement
• Budget Restrictions or Formal Financial Accounting during the life of the project
• Objectives to be achieved by the use of funds
• Subcontracts (where we are receiving funds as the Subcontractor)
• Prior Approvals from Sponsor Required
• Key Personnel are listed
• Period of Performance
• Invention/Data Rights (Intellectual Property)
• Binding Legal Relationship (obligates recipient to perform and sponsor to pay)
• Deliverables are part of the agreement
• Reporting Requirements (financial or technical)
• The sponsor retains authority to withhold funds pending satisfactory completion of project objectives
• Cost Sharing

Gift or Donation
• No contractual requirements. However, objectives may be stated and use of the funds may be
• restricted to a particular purpose (professorship, scholarship, travel or research in a defined area - e.g. Diabetes)
• Award is irrevocable
• No Period of Performance is specified
• Formal Financial Accounting is not required and there is no requirement to return unexpended funds. However, a report to the donor on the utilization or impact of the gift may be requested.
• The cash is received prior to incurring any expenditures

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Salary Corrections:
The function of the GCA Office is to properly administer sponsor funding. After the fact salary adjustments are always carefully monitored due to sponsor requirements. If an adjustment is necessary, the correction should be done in a timely manner (within three months). No corrections should be requested after effort has been certified on a Personnel Activity Confirmation form.

In order to be consistent with Appointment Revision Forms and have an accurate audit trail for both internal and external auditors, a Request for Salary Correction form has been developed to assist in submitting the necessary information. The form should be used for all Salary Corrections for Sponsored Programs and will require the signature of the Principal Investigator and also the same signatures as an Appointment Revision Form.

Use the forms attached to the Grants & Contracts Forms page to submit salary corrections:
Link to Salary Correction Forms on Forms Page

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Program Income:
Program income means gross income earned by UND that is directly generated by a supported activity or earned as a result of a grant, cooperative agreement or contract. Program income includes, but is not limited to:
• Conference fees.
• Income from fees for services performed.
• The sale of commodities or items fabricated under an award (books, videos, etc.).
• The use or rental of property acquired under a grant, cooperative agreement or contract.
• License fees and royalties on patents and copyrights.

Program Income Usage:
Program income will be used in one or more of the following ways:
1. Additive alternative. Program income is added to the funds already committed to the project. It is used to further eligible project or program objectives under the terms of the award.
2. Matching alternative. Program income is used to finance part or all of the matching costs of the project or program.
3. Deductive alternative. Program income is applied toward the allowable project cost during the award period. Thereby reducing both the sponsor share and the matching share.
4. No restrictions. Program income can be used by the department as they see fit. Expenditures must follow University Policy.

Program income that is earned during the award period and falls under the alternatives 1-3 listed above, must be expended during the award time frame. If the additive or matching alternative is in effect and all of the program income can not be spent during the award period the excess would be used in accordance with the deductive alternative.

The following examples illustrate the alternatives.
An agency awards $100,000 for a project. The project generates $10,000 of program income.
• Additive alternative - the total project cost could now be $110,000.
• Matching alternative - If UND were required to provide a 20% match ($20,000 - UND and $80,000 - Agency) the project would be reported as follows:
• $10,000 program income
• $10,000 UND match
• $80,000 agency
•Deductive alternative - The agency would now only fund $90,000.

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PreAward Cost:
Sometimes it is necessary to have a fund established prior to the execution of the final award document. These guidelines outline the requirements for establishing an account that will be used for preaward costs. It is inappropriate to charge preaward costs to a nonsponsored account and transfer them later. The following criteria apply:
• The request should contain a description of the sponsor assurance.
• The anticipated award amount.
• The projected start date of the award.
• The department must accept the financial risk in the event an award is not forthcoming, the start date is changed by the sponsor or an acceptable agreement can not be negotiated.

GCA reviews and approves the request and sets up the fund.

Since the fund will have no budget entered until the award is finalized it is the responsibility of the department to monitor expenditures.

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Cost Overruns:
A Cost Overrun occurs when directs costs charged to a grant, cooperative agreement or contract are in excess of the awarded amount. Deficit spending on these funds is inappropriate and should rarely occur. When such an occurrence exists, the deficit must be moved from the grant, cooperative agreement or contract to a departmental account.

The departmental account to which the charges are being transferred should have the same function as the grant, cooperative agreement or contract. Specifically if the deficit fund has a function of research, the departmental fund should have a function of research. The same would follow if the function was instruction or other sponsored.

If the deficit is incurred in anticipation of additional funding, a memo should be prepared by the department accepting the responsibility for the cost overrun should the funding not be forthcoming. See Preaward Costs for criteria.

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