Business and Finance
Policy Title: Grant Processes
Created 1/5/2003 Updated 6.13.2014

Purpose: To outline official processes for transactions that relate to Grants.

2-10-1 Grants
2-10-2 Grant Expenses
Sound Management Practices
Drake Purchasing Cards
Payroll Expense
Tangible Goods 
Services
Travel
Staff Benefits
Scholarships and Graduate Assistantships
Equipment
Cost Transfers
2-10-3 Rate of Effort Reports
2-10-6 Grant Accounting Reports
2-10-7 Equipment Inventory
2-10-8 Grant Reporting

2-10-1Grants

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Updated Date: January, 2002
Contracts and Grants
As a reminder, all contracts that require a signature obligating Drake University and its employees in any form must be forwarded to the Business and Finance office for review prior to commitment. Also, any contract for a Grant must be forwarded to the Grants office prior to commitment. These procedures will help to ensure that the various liability, tax, legal and cost issues will be addressed before the University is committed.

Grant proposals are to be submitted to the Grants Office. This office has a Grants Manual which describes the proposal preparation and approval process prior to submission to the funding agency.

When a grant is received, the grants officer sends a "Notification of Award; Request to Establish Account" (exhibit 1 at end of this section) to the Vice President, Business and Finance. The Notification is sent to the grants accountant who assigns account numbers for expense categories to the project, based on the budget provided. Grant accounts will be established by the Drake University grants accountant. This will be done upon receipt of:

1) A line item budget

2) One of the following:
A. Original letter of award from the grantee
B. Funds to be deposited
C. Notification of award with original signature(s)
D. Other notification deemed appropriate by the Vice President for Business and Finance
The grants accountant submits the Budget Change Request (exhibit 2) to the controller. The budget is input into the University's accounting system. The grants accountant sends the account numbers and budget, along with a Signature Authorization form (exhibit 3), and other needed information to the project director.

No-cost extensions (an extension of the grant ending date, with no additional funding) and carry-forward of funds (to next project year) are handled in the same manner as proposals. Generally, line-item transfers that are more than 10%, are to be approved by the funding agency. The grant document and the grants officer can assist in making a determination when permission to transfer funds between budget line items is to be approved by the funding agency. When approval is received from the funding agency, a "Notification of Award; Request to Establish Account" is sent to the Vice President, Business and Finance. The grants accountant submits a Budget Change Request for approved line-item transfers to the Controller.

Grant Budgets The Grants Manual includes information regarding budget preparation for inclusion in proposals.

Staff Benefits Drake negotiates a staff benefit rate with the U.S. Department of Health and Human Services for use on all grants. The current rate can be obtained from the Grants Office, for use in preparing proposals. This rate is applied to all non-student salaries, for both full- and part-time employees. The negotiated rate will be charged to all grants on a monthly basis. If a private foundation will not pay for staff benefit costs, the benefits will be charged to the grant and funded by the Drake match account. If staff benefits are an allowable cost to the funding agency, but no benefits are budgeted, the salary budget will be reduced to allow for the charging of benefits at the negotiated rate. If an exception is approved (see Exceptions section), a decision as to how the benefits will be funded is to be made prior to grant acceptance and the account number from which benefits are to be funded will be included in the "Notification of Award; Request to Establish Account."

2-10-2Grant Expenses

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Section J of Circular OMB A-21, Cost Principles for Educational Institutions provides principles to be applied in establishing the allowability of certain costs. If allowable costs for Drake University and the A-21 differ, the more strict regulations will apply.

Sound Management Practices

OMB Circular A-21 requires sound management be used in fulfillment of Drake’s obligations in all grants and contracts. Timely and prompt processing of all allowable charges is essential. Fines/late fees cannot be paid with federal or state dollars.

Drake Purchasing Cards

Purchasing Cards on Grants

Sponsored Programs Administration approves grant purchases using University purchasing cards (p-cards) on a restricted basis. This updated policy is in
response to the common business need to order products online via a vendor’s website. Many vendors will not direct bill the University, but instead require a
credit card number to be submitted with an online order. 

Under these circumstances, a purchase can be made using a p-card. However, the default foapal must go to a departmental budget center and not directly to a grant. A business manager can then submit a journal voucher, along with adequate supporting documentation, to request a cost transfer into a specific grant. The journal voucher will be reviewed by a SPA grants accountant for determination of whether the purchase is an allowable cost under the terms of the grant. If the cost transfer is approved, the grants accountant will process the journal voucher to account for the purchase as a grant expense.

If not approved, the grants accountant will communicate with the business manager that the expense is not allowable and, therefore, will remain in the departmental budget center..

Payroll Expense

Grant employees are treated the same as other Drake employees. The PI should contact Human Resource regarding the process for new hires and Grants regarding available budget dollars. Human Resources will send all offer letters to applicants who accept full-time or regular part-time positions with Drake University. See “New Hire Information Form”on the HR web site. Human Resources will contact the new employee for information necessary to enter that employee into the Banner system. This will facilitate generation of a Banner ID and assignment to an e-mail account. Human Resources will also make arrangements for the new employee to complete I-9 and W-4 forms before the first day of employment.Time cards are completed for non-exempt employees and students. Employee/student time cards must use the person’s ID number rather than social security number.AnEmployee Status Form is used for non-exempt employees when an employee’s status changes, (for example, full-time to part-time), and when a salary change is made for nonexempt employees, and for all fund number changes. Since new fund numbers are established for each grant period, Employment Status Forms are completed for all non-student employees at the beginning of the grant year, indicating the old and new fund number(s), and the effective date of the change. When multiple employees are involved, an approved chart format may be used. An Employment Status Form is to be completed when any non-student employee leaves. Overload/summer compensation is to be requested on a Request for Direct Payment form with a Consultant Report Form. See Payroll for detailed information regarding these forms and Payroll Office personnel for deadlines for paperwork submission.Drake employees being paid through grants will receive the same rate of pay as they receive for similar duties at Drake University.

Tangible Goods

OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals and Other Nonprofit Organizations, provides procurement standards. When applicable, project directors are to work with the Purchasing Agent to obtain bids. If bids are not required, Purchasing Procedures (see Business & Finance, Section 8) are to be followed.

Services

Request for payment for a service is to be made on a Request for Direct Payment form including a Consultant form if applicableFor Determination of Drake University Employees versus Independent Contractors Policy, see “Drake University Employees vs Independent Contractors Policy”.Independent contractors should be bonded and insured. Payments should be made to the consultant or employee within a month of completion of the project.

Travel

The University Travel Expense Reimbursement Policy is detailed in Accounting, section 2-6. Entertainment and alcohol are specifically prohibited in Section J of Circular OMB A-21.Detailed receipts are required for meals over $25. Credit Card receipts are not acceptable.

Staff Benefits

The current negotiated staff benefit rate is charged to all grants on a monthly basis.The rate is a percentage of salaries and is applied to all non-student salaries, for both full- and part-time employees. Check with the Grants Office to determine the current rate.

Scholarships and Graduate Assistantships

The project director is to work with the Office of Student Financial Planning personnel to issue scholarships and graduate assistantships and to ensure all eligibility requirements are met.

Equipment

Procurements Standards(OMB Circular A-110) are to be followed for equipment purchases. Equipment purchased with funds from grants and contracts is the property of Drake University and inventory records are maintained in the Grants Accounting Office.Any other ownership of equipment purchased through grants and contracts must have prior approval from the Vice President of Business and Finance.

Cost Transfers

Allowable transfer of applicable costs from one account or fund to another may be done through journal vouchers within 90 days of incurring the cost. Detailed documentation is required to support the transfer. Transfers over 90 days require the approval of the Dean. Transfers should not cross Drake’s fiscal year.

2-10-3Rate of Effort Reports
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Rate of Effort reports (Exhibit 6) are to be completed by all non-student employees whose salary is charged, in whole or in part, to a grant or is used to meet cost sharing or matching requirements on a grant, according to Section J.6.d., OMB A-21.

Rate of Effort reports are to be completed on a monthly basis and are to account for 100% of the employee's time (column 4 on the report). The report is to be signed by the employee and the project director. The project director's report is to be signed by her/his supervisory official.

2-10-4 Drake Match
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Any Drake match (use of University funds to pay grant expenses) or in-kind contribution is to be included and approved during the proposal approval process. Drake match is documented and calculated for inclusion in reporting to the funding agency. Procedures for documentation of the Drake match will be established with the project director and grants accountant for each grant.

2-10-5Incentive Programs
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Government Programs
The grant incentive program is designed to encourage the acquisition of new external funding for projects which further the strategic goals of Drake University. All externally sponsored projects funded from public and private sources are governed by the following policy:1. Grant applications, when not prohibited by regulations, shall include indirect cost recovery.
2. The college or school originating the grant will receive 12.5% of the indirect cost recovery funds earned (after deducting any Drake hard match), while the originating department will also receive 12.5%.
3. The University's non-academic administrative units basic grants (e.g., MPRRC, Vocational Rehabilitation, Reading and Learning Center, Head Start, Small Business Development Center) are not included in this program.
4. Any exceptions to this policy are to be approved by the Provost and the Vice President for Business and Finance.

Procedure

1. The implementation of this project is the responsibility of the Office of Corporate, Foundation and Sponsored Grant Support, Office of Associate Provost and Director of Research, and the Grants Accounting Office.
2. Incentive funds will be placed in a restricted fund balance account, one each college or school, and one for each participating department. Funds will be transferred after the close out of Drake's fiscal year (around July 15), based on indirect cost recovery earned by May 31.
3. Any questions concerning processing should be directed to the Grants Accountant (ext. 3169).

Non-Government Programs
All incentive programs (other than federal and state grants) whereby funds will be transferred to college or departmental restricted accounts, must be approved by the Vice President of Business and Finance before the program begins.All expenditures related to the program must be charged to the appropriate account. In addition, benefits calculated at the current rate of total salaries (recalculated annually) and overhead (indirect costs) calculated at 26% of total expenditures that are to be deducted from the revenues for the program. No more than 50% of the remaining difference or surplus shall be transferred to restricted accounts. The amount to be transferred shall not exceed a maximum of $2,000 per project per year for no more than two years.

2-10-6Grant Accounting Reports

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The Accounting Office will provide a monthly financial statement and detail of the current month's expenditures to the project director for each project currently in operation. See Accounting Section 2-2 for more information on both reports.

2-10-7Equipment Inventory
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An inventory listing of equipment purchased with Federal and State of Iowa funds is maintained in the Grants Accounting Office. At the end of each fiscal year, an updated list is sent to project directors for verification. Since equipment purchased with Federal funds is the property of the Federal agency, permission is to be obtained from the funding agency prior to disposal.

2-10-8 Grant Reporting
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The project director prepares all programmatic reports for submission to the funding agency on a timely basis.The Grants Accounting Office prepares all reimbursement requests and quarterly financial reports and ensures that funds are received and deposited promptly.All grant related deposits are to be made through the Grants Office.University policy requires that deposits be made daily. Reimbursement checks received by departments are to be forwarded to the Grants Accounting Office immediately.Final financial reports are prepared by the Grants Accounting Office. 

FORMS:

Send policy comments to: Web Administrator
Responsibility for Administration: Grants Financial Manager
Department Policy Resides in: Business and Finance Grants

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