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Managing Sponsored Projects
UM SPA,February 2008 |
For general information about what is allowable on sponsored projects, refer
to the University financial policy on Charging
of Direct and Facilities and Administrative (Indirect) Costs. Contact
the SPA grant administrator to determine if particular charges are allowable.
The PI is responsible for initiating and approving purchases of
goods and services. The unit administrator assists while the department head
provides local oversight.
General purchasing information
In
general, University purchasing policies and procedures seek to ensure that
materials and services can be purchased as economically as possible, while
giving suppliers fair consideration. For further information refer to the
University financial policy on Purchasing
Goods and Services. This policy also specifies when bidding is required and
who is authorized to place an order.
Charges should be incurred directly against the appropriate sponsored account
whenever possible. Some departments prefer to make large purchases on one
non-sponsored account and to subsequently cross-charge or distribute the costs
of the supplies to various accounts. A split distribution document should be
used and the cost
transfer policy must be followed.
Supplies and services must
be charged to projects at actual cost and must have full documentation for
quantities purchased and rates charged.
Responsibilities
The PI is responsible for initiating all expenditures. Since they must monitor the account, PIs are also responsible for funds being available within an appropriate budget prior to the initiation of any expenditure.
The unit administrator prepares the necessary documents which create charges against the sponsored account.Approvals
To figure out who approves the document, use the Document Approver and Routing Grid at: http://www.oar.umn.edu/CA/document_routing.cfm.Questions to ask before making any purchase for the project:
- Is the item allowable and allocable to the project?
- How much will it cost?
- Would a "prudent" person purchase this item under the circumstances? (the "reasonable" test)
- Is there money in the account to purchase the item?
- Where will you buy it? (e.g., for lab commodities, equipment, and supplies, go to Lab Services, a unit within Purchasing Services (http://purchasing.umn.edu/).
- What is the correct document to use?
See the Justification Standards for rules on writing justifications that provide the information necessary for an audit trail. In general, When writing descriptions and justifications on the purchasing document:
- Supply complete information: who, what, when, where, why
- The description field holds 25 characters
- Do not repeat information from the account string (7320-40 means lab supplies)
- Describe any instruction you received in the comments or DTEX (such as "requested by PI")
- If it is an atypical purchase for type of account charged, explain why
- For common personal use items or items that do not appear to have direct benefit to the sponsor, explain how the purchase directly benefits the project.
- Justify common indirect-type costs. If the cost was justified in the proposal, write in the comment field: "This cost was justified in the proposal and accepted by the sponsor."
Help
Instructions for obtaining, filling out, and submitting purchasing forms are available through Training Services at (612) 626-1373 or their Web site and in financial policies and procedures.
Training Services offers sessions on University purchasing policies and procedures; contact them at (612) 626-1373 for more information.
Purchasing American-made equipment and products
Congress passed a law that, to the greatest extent possible, all equipment and products purchased with federal funds should be American-made. Therefore, PIs with federally-sponsored projects must make a reasonable effort to ensure that whatever they buy on the project was made in the United States.
Purchasing near the end of the project
Purchases may not be made simply to use an unobligated balance. If a purchase is made at the end of a project, the sponsor or auditors may question why the purchase was made and whether it was necessary to complete the project .
Generally, purchasing during the last 60 days of a project will be
questioned. Orders should be cancelled for orders that have not been
received or cannot be used before the project's expiration.
If an item must be purchased within 60 days from a project's end, it should
be encumbered and the justification for the purchase must include the reason why
the item is being purchased at the end of the project.
When is a bid necessary?
under $10,000:
The departmental small order limit is $10,000. For purchases under that amount, departments are responsible for gathering any information they need to assure document approvers and auditors that they are paying a reasonable price for everything they purchase. Do accomplish this, check prices with several vendors. Departments must also ensure that the item or service they are buying is not already available for their use within the University. Purchases may not be split in order to avoid billing.When purchasing an item, it is good business practice to get a written price quote from the vendor, including shipping information and payment terms. Note that the University will accept payment for less than 30 days only if there is a discount offered for early payment. The vendor should also include the delivery date on the quote.
over $10,000:
Purchasing Services must conduct a competitive bidding process for purchases over $10,000.$250,000 and over must receive prior approval by the Board of Regents.
Tools for purchasing: cash, on-line purchase request, purchasing card, and travel card
Cash advances
In exceptional circumstances, PIs can obtain cash advances for such purposes as nominal payments to study subjects, funding of extended travel to remote locations, or other specialized activities. Advances are not made for on-campus operational needs. For non-travel-related advances, consult the financial policy on Establishing Change and Miscellaneous Payment Funds, or contact SPA.On-Line Purchase Request
PIs can use the On-Line Purchase Request (PREQ) to order materials, supplies, and standard services. This screen was developed for individuals who want to place orders but do not need to know detailed accounting procedures. The user opens the screen on the web, enters the item, its cost, the supplier's address, and a short scientific justification tying the purchase to the goals of the project. The user then hits 'submit' and the information is automatically transferred to an official University purchase order form.
To sign up to use PREQ, see the individual in the department who has the authority to prepare FormsNirvana forms.Purchasing card
Authorized University employees can request a purchasing card to procure goods and standard services up to $2,499 per purchase. The card is issued only to employees paid through the University's payroll system and may not be used for travel expenses (see the next paragraph). Consult the financial policy on Using the University Purchasing Card, or contact the purchasing card program administrator at (612) 626-8673 for more information.
Travel charge card
The University participates in a corporate charge card program in which charge cards are issued to employees for use on travel. Travelers can use the card for paying for business travel instead of using their own credit card or cash. For more information consult the financial policy on Using the University Corporate Travel Card, or contact Purchasing Services at (612) 624-2828.
University-wide contracts
Purchasing Services negotiates contracts
which offer the opportunity to purchase goods and services at substantial
savings. Use of these contracts is not mandatory. However, for the large
majority of these contracts, bidding is not required unless the purchase is
$100,000 or more (bidding is usually required for $10,000 or more). The annual
Contract Book issued by Purchasing Services lists the contracts and their
effective dates. Call Purchasing Services at (612) 624-2828 for more
information. The contract book is available on the web at: http://uwidecontracts.umn.edu/
Lab Services
Most lab commodities can be purchased from
Lab Services in University Stores. Over 3,000 lab items and chemicals are
available for next day delivery. Call 612.626.1728 for more information.
Restricted commodities
Procedures for purchasing certain
commodities differ from regular purchasing procedures. Refer to the University's
financial policy, Purchasing
Goods & Services. These include:
Importing specimens
Since many plant and animal specimens sent
into the U.S. from other countries are delayed or stopped for lack of an import
permit, it is advisable to meet U.S. Department of Agriculture and the U.S.
Animal and Plant Health Inspection Service (APHIS) requirements in advance. This
is especially important for valuable or perishable specimens, cultures, and
tissues. Contact DEHS for current contacts at the APHIS.
Equipment leasing and renting
If total lease or rental costs
exceed the purchase price, the equipment must be purchased.
Title and ownership of equipment
Federal sponsors automatically
vest title to the University when equipment is acquired for their projects. Most
other sponsors allow the University to retain title to equipment purchased for a
sponsored project. They usually ask for the right, for up to one year after the
end of the project, to request the University to return the equipment. Ownership
of equipment will be addressed in the sponsor's guidelines and should be
considered when preparing the proposal or in the award agreement.
If the project moves from the University to another institution, title to
the equipment may also move. Questions should be directed to the appropriate SPA
grant administrator.
Keeping track of equipment
Each
piece of capital equipment is labelled with a property number by Inventory
Services to help track its location. Inventory Services sends yearly reports to
each department requesting confirmation of equipment located in or assigned to
the department. They also maintain a database that includes:
Insurance
The University provides the following types of
insurance: