Roles & Responsibilities

Monitoring of Funds

Principal Investigators are responsible for the ongoing fiscal management of awarded projects, including regular monitoring against project period budgets. Federal grants policy (OMB Circular A-110) establishes the approved project budget as the financial expression of the project, and sponsors may evaluate the project against the budget at any time. Although sponsors allow certain flexibilities with respect to rebudgeting, unobligated balances, and preaward costs, Stanford University and sponsors expect expenditures to be reasonably consistent with the approved project and budget. Sponsors may question or restrict expenditures that appear inconsistent with the project plan and budget. PIs are obligated to request prior approval when budget and program plan revisions indicate a significant change in scope. Indicators of a change in scope can include, for example, significant expenditures beyond the amount authorized on the award, or requests for additional funding (See Section 3 of this policy.) It is Stanford's expectation that projects will be managed within their established budgets. If, as a result of unusual circumstances or unanticipated project expenses, an account is in overdraft upon expiration of the term of the sponsored project, and if additional funds have not been received from the sponsor, the PI must identify an appropriate source of funds (e.g., gift, endowment, or operating budget) to cover the expense. The overdraft must be transferred, in sufficient time to permit Stanford to comply with the financial reporting requirements of the original award. Since charges to clear overdrafts reflect direct project costs, they must not be incorporated into cost pools which lead to indirect cost recovery. These dollars represent project costs being borne by Stanford, and therefore must be accounted for in the same manner as cost sharing. The department must identify the source of funds to the Office of Sponsored Research (OSR) or designated School office which will create a cost sharing account. The department will then initiate the necessary expense transfer, including documentation of the nature of the expenses, noting they were legitimate project expenses but the funding was inadequate, and other reasons for the transfer. Such transfers must occur in sufficient time to permit Stanford to comply with the financial reporting requirements of the award. The school is responsible for the timely clearance of any such unfunded expenditures from within its resources.

Review of Project Expenditures

Monthly Expenditure Statements, prepared and issued by the Controller's Office, are the official record of project expenses and the basis for cost reimbursements to Stanford. Expenditure Statements for sponsored project and cost sharing accounts must be reviewed each month by a knowledgeable individual, i.e., the Principal Investigator or designee, so that adjustments can be made in a timely manner, and that rates of expenditures can be monitored to assure availability of funds. This review is documented by means of a signature on the Expenditure Statement. To be considered timely, monthly expenditures must be reviewed within two months of the end of the month being reviewed. A checklist for the review of project expenditures is available on the web.

• Any questionable charges must be brought promptly to the PI's attention.
• If needed, these charges must be corrected by an appropriate transfer.
• Transfers should be initiated as soon as possible after a need has been identified.
• Whenever expenses are moved to or between sponsored accounts, the PI must assure that the project which ultimately pays the expense is the project which benefited from that expense, and that there is adequate documentation to support the appropriateness of the transaction.
• Timely as described in RPH 3.13.

The policy governing a cost transfer of expense for a sponsored project is defined in RPH 3.13 Cost Transfer Policy for Sponsored Projects.

Certification of Project Expenditures

In addition to monthly review, expenditures for sponsored project and cost sharing accounts must be certified by the Principal Investigator at least quarterly. The following certification statement appears on Expenditure Statements for every sponsored project and cost sharing account:

"To the best of my knowledge, salary and wages charged to this project are appropriate in relation to work performed on this project. All other costs charged to this project are, to the best of my knowledge, appropriate. Where required, corrections have been or will be made through the accounting system."

Project expenditures must be certified no less frequently than every academic quarter, recorded by signature on the last expenditure statement of the quarter (or the last statement for a project which ends mid-quarter). This certification is the responsibility of the project Principal Investigator (or Co-PI). A PI may delegate the monthly review of statements for accuracy, but may not delegate certification of the appropriateness of the charges.

The PI's certification assures that all expenses charged to the account are allowable, allocable to the project, and reasonable. The certification of salary expenditures assures that salaries charged to the account are supported by a corresponding expenditure of effort during the time period being certified. The certification also assures that other expenditures are for items or services purchased and used during the project period as specified by the award. It is the PI's responsibility to seek a No-Cost Extension of the award if that is necessary in order to complete the project. To be considered timely, the certification must be signed within two months of the end of the academic quarter being certified. A quarterly calendar detailing timeliness for both monthly reviews and quarterly certifications of expenditures is available on the web.

Adequate explanation and documentation for all project charges must be maintained for three years after the sponsor closes out the award. Where documentation cannot be provided as to the allowability, allocability and reasonableness of any project expense, including but not limited to expenses incurred late in the project period, the sponsor may deny them. In this case, the PI, department or school will be expected to cover the expense from unrestricted sources. Each school and independent laboratory must maintain a mechanism to retain reviewed and certified Expenditure Statements. Difficulties regarding the timely certification of expenditures should be discussed with the Department Chair, School Dean, and/or Vice Provost and Dean of Research and Graduate Policy. Schools and Departments may consolidate Expenditure Statements for certification, as long as every expenditure can be linked to a certification.