Questionable Costs and Risk Management Practices
Questionable
Costs
RAIN
July 28, 2021
Topics
•
What are “questionable costs?”
•
Why does ECU care?
•
Management Reports
Recent NSF Audit
Management Reports
•
Available to Hubs, Financial Analysts
•
Late spending analysis – supplies, travel, equipment…
•
Burn rate advisories – advisories on over/under spending (Also in the PI
Portal)
•
Specific questionable costs
•
Reported Quarterly to REDE and ADRs (Examples)
•
Burn rate
•
Status of LOGs
•
Cost Transfers/Salary Redistributions
Best Practice
•
Monthly review of Management Reports as part of monthly
reconciliation
•
Work with Hubs and Financial Analysts to address late charges,
correct or justify whenever possible
•
Identify Questionable Costs from Questionable Cost report
•
Prepare/submit Cost Exception Request in eTRACS
•
Monitor report to ensure request has been approved (Be sure that
the maximum approved budget is not exceeded)
Questionable Cost Justification Process
•
Questionable Cost report sent monthly to DRA and Hubs
•
Should be reviewed and justification completed in eTRACS
•
The designated Financial Analyst will enter a budget in the
appropriate Banner account to demonstrate the cost has been
approved
•
DRA and Hubs should continue to review the Questionable Cost
reports to ensure continued compliance
Important Information about Justifying Costs
•
The justification should state:
•
Administrative and/or Clerical Salaries
•
How these individuals are
necessary
to perform the project’s scope of work
•
How the functions performed will be identified with the project with a high degree of
accuracy
•
Costs have been included in the budget to the sponsor – (Note, even if included in the
budget, an ECU Exception Form
must
be on file)
•
NSF has made it clear that they will not approve clerical/administrative personnel if not
in the original budget
•
Example: SHRA administrative personnel is needed due to extensive meetings, travel,
and other related duties necessary to the project
•
Example: This administrative position was included in the proposal budget and approved
by the sponsor
Important Information about Justifying Costs
•
The justification should state:
•
Non-salary items
•
Why these items are
necessary
to perform the project’s scope of work
•
Example: Extensive paper, copying and postage costs are necessary because the project requires
preparation of multiple manuals, handouts, mailings and other related documents
•
Remember: There must be an
extraordinary
need beyond what is
normally
provided by ECU:
•
the cost is specifically needed to complete the technical scope of work;
•
it is allocable – you can document how these items directly relate to the project;
•
and
the cost must be approved by ECU
•
Key terms: Unlike circumstances
– the project has conditions and activities well
beyond the standard of support usually provided by ECU
Questionable Cost Approval Process
•
New reports are being developed
•
Non-salary reports
•
Salary reports based on job title/description
•
Process for approval is being refined and will be available soon
This document discusses the concept of questionable costs, why they are important to ECU, and the risks associated with pre-award and active award stages. It also covers management reports, best practices for addressing late charges, and the process for justifying questionable costs. The content emphasizes the significance of monitoring, reporting, and justifying costs to ensure compliance and financial integrity.
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Presentation Transcript
Questionable Costs RAIN July 28, 2021
Topics What are questionable costs? Why does ECU care? Management Reports
AWARD END RISKS PRE-AWARD RISKS ACTIVE AWARD RISKS - - - - - - - - - Unallowable, Unallocable, Unreasonable Costs Inadequate Documentation General Ledger Differs from Draw Amount Burn Rate No/Late/Inadequate Reports Sub-awards, Consultants, Contracts Duplicate Payments Excess Cash on Hand/Cost Transfers Unreported Program Income - No/Late Final Reports Cost Transfers Spend-out Financial Adjustments Unmet Cost Share - - - - - - - Funding Over Time Conflict of Interest False Statements False Certifications Duplicate Funding Inflated Budgets Candidate Suspended/Debarred - - - - D A T A A N A L Y S I S
Management Reports Available to Hubs, Financial Analysts Late spending analysis supplies, travel, equipment Burn rate advisories advisories on over/under spending (Also in the PI Portal) Specific questionable costs Reported Quarterly to REDE and ADRs (Examples) Burn rate Status of LOGs Cost Transfers/Salary Redistributions
Best Practice Monthly review of Management Reports as part of monthly reconciliation Work with Hubs and Financial Analysts to address late charges, correct or justify whenever possible Identify Questionable Costs from Questionable Cost report Prepare/submit Cost Exception Request in eTRACS Monitor report to ensure request has been approved (Be sure that the maximum approved budget is not exceeded)
Questionable Cost Justification Process Questionable Cost report sent monthly to DRA and Hubs Should be reviewed and justification completed in eTRACS The designated Financial Analyst will enter a budget in the appropriate Banner account to demonstrate the cost has been approved DRA and Hubs should continue to review the Questionable Cost reports to ensure continued compliance
Important Information about Justifying Costs The justification should state: Administrative and/or Clerical Salaries How these individuals are necessary to perform the project s scope of work How the functions performed will be identified with the project with a high degree of accuracy Costs have been included in the budget to the sponsor (Note, even if included in the budget, an ECU Exception Form must be on file) NSF has made it clear that they will not approve clerical/administrative personnel if not in the original budget Example: SHRA administrative personnel is needed due to extensive meetings, travel, and other related duties necessary to the project Example: This administrative position was included in the proposal budget and approved by the sponsor
Important Information about Justifying Costs The justification should state: Non-salary items Why these items are necessary to perform the project s scope of work Example: Extensive paper, copying and postage costs are necessary because the project requires preparation of multiple manuals, handouts, mailings and other related documents Remember: There must be an extraordinary need beyond what is normally provided by ECU: the cost is specifically needed to complete the technical scope of work; it is allocable you can document how these items directly relate to the project; and the cost must be approved by ECU Key terms: Unlike circumstances the project has conditions and activities well beyond the standard of support usually provided by ECU
Questionable Cost Approval Process New reports are being developed Non-salary reports Salary reports based on job title/description Process for approval is being refined and will be available soon
