4.0 Post-award Management - Financial Administration

Additional Resources: 

4.1 Grants and Contract Accounting

4.2 Payment Terms

Policy No: RESEARCH 4.2 
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: April 2013

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

It is the policy of Georgia Tech’s Office of Sponsored Programs that, in issuing and administering sponsored projects/awards, the office is in compliance with:

  • Georgia Institute of Technology Policies and Procedures
  • Applicable sponsor regulations
  • Terms and conditions of the prime award

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Enforcement

To report suspected instances of noncompliance with this policy, please visit Georgia Tech’s EthicsPoint, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=7508

4. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.2.1 Advance Payment

Policy No: RESEARCH 4.2.1 
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: April 2013

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

It is the policy of Georgia Tech that an advance payment is required on all industrial projects with industry sponsors. This advance payment is required because it usually takes several months from the start of a project until receipt of the first payment. The amount of the advance payment is usually 25% of the total project cost. However, if the sponsor has a bad credit rating, a higher amount (up to the full project cost) may be required. The sponsor is notified of this advance payment requirement in the proposal transmittal letter. The amount of the advance payment is cited in the payment clause of the contract. An invoice for the advance payment is transmitted by the Program Initiation Division Contracting Officer with the proposal. The advance payment is applied against the final invoice for the project, and any funds remaining are returned to the sponsor. This policy does not apply when the industrial sponsor has a prime government contract under which Georgia Tech will be a subcontractor.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.2.2 Fixed Price

Policy No: RESEARCH 4.2.2  
Type of Policy: Administrative
Effective Date: November 2014
Last Revised: November 2014

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

This contract is most appropriate when there is a clear SOW and little risk to the Institute. On occasion, a sponsor will insist on a fixed price contract. If the PD/PI’s Lab/School determines that the financial/legal risks are minimal and acceptable, the researcher’s Lab/School will state that internal funds will be available in the event of a cost overrun, and that the deliverables do not include hardware or software items, some special programs may be accepted on a fixed price basis with the approval of the Vice President for Research. This is preferred contract type when a PI has subcontractors or will be issuing sub-awards on the project.

Per the Uniform Administrative Requirements (2 CFR 200), Subpart - C, this type of agreement cannot be used when there is mandatory cost sharing required.  Changes in PD/PI, project leader, project partner or scope of effort must receive the prior written approval of the Federal award agency or pass-through entity.  Additionally, the non-Federal entity must certify in writing to the Federal awarding agency or pass-through entity at the end of the Federal award that the project or activity was completed or the level of effort was expended. If the required level of activity or effort was not carried out, the amount of the Federal award must be adjusted.

Click here for the Georgia Tech Fixed Price Memo, which should be submitted along with the OSP Routing Form.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Related Information

Resource Link
Budget, Planning and Administration: http://www.policylibrary.gatech.edu/business-finance/firm-fixed-price-ffp-residual-balances .
Project Closeout in Grants Management System: http://www.policylibrary.gatech.edu/project-close-out-grants-management-system

4. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0
11-20-2014 OSP Rev 2.0
03-16-2015 OSP Rev 3.0

4.2.3 Cost-reimbursement

Policy No: RESEARCH 4.2.3  
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: April 2013

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

There are several flavors of Cost Reimbursable (CR) contracts, the two most common at Georgia Tech are the pure Cost Reimbursement and Cost Plus Fixed Fee (CPFF). Including cost sharing in a contract or proposal is also a form of a cost reimbursable contract. The CR and CPFF contract is the preferred contract for the Institute to receive (without cost sharing), as it limits risk on research endeavors that may not have a clearly defined SOW. Under the CPFF, in addition to reimbursing the Institute for costs related to the work, the sponsor will also provide the Institute with a fee.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.2.4 Time and Materials

Policy No: RESEARCH 4.2.4  
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: April 2013

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

Under this type of agreement the sponsor agrees to pay a negotiated hourly rate for specified types of labor and to reimburse the Institute for materials used on the project. Base hourly rates invoiced to the sponsor include base hourly rate plus all indirect costs. Prepare your budget as such. This type of contract requires careful oversight and management. This type contract also requires the approval of the Vice President for Research.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.2.5 Foreign Sponsor Payments

Policy No: RESEARCH 4.2.5  
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: April 2013

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

Exchange Rate Consideration

The exchange rate is the price of one currency expressed in terms of another currency. For example, as of the November 2009, the exchange rate of one U.S. dollar for one Euro was approximately 0.67, which means that one dollar can be exchanged for 0.67 euros. Fluctuation in exchange rates have significant affects on the payments for sponsored research projects. All GA Tech units should be aware of the risks, including potential loss of dollars, involved in agreements containing payment terms in foreign currency.

Payment Terms for Foreign Sponsors

OSP generally requires at least 50% advance payment from all foreign sponsors. To eliminate the risk associated with exchange rates, OSP establishes the agreement amount and payment terms in U.S. dollars. If the sponsor will not agree to establish the agreement’s price and payment terms in U.S. dollars, OSP will try to reduce the risk associated with exchange rates by requiring payment in full upon execution of the agreement or as much advance payment as can be mutually agreed upon. If the sponsor will not agree to advance payments, OSP will require a memo signed by the School Chair stating that they understand the ramifications associated with payments made in a foreign currency, and the School will be responsible for any cost over-runs associated with foreign currency fluctuations.

Budget

The PI should prepare a budget in U.S. dollars and the currency of the foreign sponsor. OSP will process the budget for the Agreement in U.S. dollars at the time an award is processed based on the current exchange rate. Grants & Contracts will notify the PI and OSP of the payment amount received to adjust the budget as necessary. The PI’s School will be responsible for any shortfalls in the awarded amount due to fluctuations in the currency’s exchange rate. Therefore, the PI should stay abreast of the affect the exchange rate will have on the budget throughout the life of the research project.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.2.6 Risk Mitigation Policy

Policy No: RESEARCH 4.2.6  
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: April 2013

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

Research projects that are funded by private industry sponsors and certain others carry an added risk of financial losses due to non-payment by the sponsor. The causes of non-payment range from financial exigencies faced by the company particularly during periods of general economic slowdown to disappointment on the part of the sponsor with the outcomes of the research project. With such sponsors, it is particularly important to establish clear contractual agreement as to the nature of the research relationship between Georgia Tech and the sponsor. It is equally important to develop payment terms that mitigate Georgia Tech’s financial exposure, set clear expectations regarding payment, and exercise consistent and prudent oversight of project receivables.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.3 Cost Sharing

Additional Resources: 

Policy No: RESEARCH 4.3  
Type of Policy: Administrative
Effective Date: April 2013    
Last Revised: July 2014

Policy Owner: OSP
Policy Contact: Duane Hutchison, Executive Director, duane.hutchison@osp.gatech.edu

1. Policy Statement

Cost share (Matching) funds are those funds contractually obligated by the Institute to meet the financial requirements specified in a sponsored award. These expenses represent the Institute’s contribution to an externally funded sponsored project.  When a cost share obligation is identified in the sponsored agreement, it must be accounted for in the records of the Institute and reported to the sponsor.  Cost share expenses should generally be incurred at the same rate as the sponsor’s portion of award expenses.

2. Scope

This policy applies to all Georgia Tech Faculty and Staff.

3. Procedures

3.1 General Procedures
From OMB Circular A-110, Section 23 (2 CFR 235), "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations":

"All contributions, including cash and third party in-kind, shall be accepted as part of the recipient's cost sharing or matching when such contributions meet all of the following criteria.”

  1. Are verifiable from the recipient's records.
  2. Are not included as contributions for any other federally-assisted project or program.
  3. Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
  4. Are allowable under the applicable cost principles.
  5. Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
  6. Are provided for in the approved budget when required by the Federal awarding agency.
  7. Conform to other provisions of this Circular, as applicable.

** If any expense cannot meet the above criteria, it is not eligible to be recorded and reported as cost share. **

4. Related Information

Resource Link
Grants & Contracts Cost Share Info http://policies.gatech.edu/business-finance/cost-share-expenses

5. Policy History

Revision Date Author Description
01-02-2014 OSP Rev 1.0

4.4 Prior Approvals of Budget, PI, or other program changes

4.5 No-Cost Extensions

4.6 Related Georgia Tech Policies and Procedures

Administration and Finance

http://af.gatech.edu/

Grants & Contracts Accounting

http://grants.gatech.edu/

Office of Legal Affairs

http://www.legalaffairs.gatech.edu/

OIT

http://www.oit.gatech.edu/