Chapter 4: Post Award - Financial Administration 

PIs are fully responsible for all aspects of a sponsored project, including both project management and financial administration. Administrative unit research administrators assist the PI and are responsible for performing administrative tasks. OGC provides oversight functions for administrative units, offering guidance, processing invoices, and submitting financial reports.

All employees must comply with the following University of Colorado policies when managing University and sponsor funds and charging costs.

• Fiscal Roles and Responsibilities
• Propriety of Expenses

The term "cost principles" refers to which costs can be charged to a project and how those costs should be classified, either as direct costs or indirect costs. Properly applying the cost principles is necessary throughout the award lifecycle. During the pre-award phase, the proposal budget must only include costs that are allowable by the sponsor and necessary for the project. During the post-award phase, costs that conform to the cost principles and University policy may be charged to the award.

Any cost disallowance, fines, or penalties assessed against a project for non-compliance with sponsor requirements or University policy is the responsibility of the PI and their respective administrative unit.

Subpart E of 2 CFR 200 (Uniform Guidance) provides general guidance for the cost principles for federal awards. The following table summarizes the significant provisions in Subpart E.  

Title	Sections	Summary
General Provisions	§200.400-401	• Identifies the applicability of the cost principles for federal awards • States the grant recipients may not make profit on an award and may not retain a residual balance, unless authorized by the award terms and conditions
Basic Considerations	§200.402-411	• Provides for the tests to determine if a cost can be charged to a federal award
Direct and Indirect Costs	§200.412-415	• Defines direct costs and indirect costs
Special Considerations for States, Local Governments, and Indian Tribes	§200.416-419	• Provides special treatment for select entity types - not applicable to PIs or administrative units
General Provisions for Selected Items of Cost	§200.420-476	• Identifies common costs for federal awards and explains if those costs may be charged to a federal award and how to classify those costs

NIH awards follow the cost principles in Chapter 7 of the NIH GPS, with the selected items of cost for NIH awards is found in Chapter 7.9 of the NIH GPS.  For certain NIH Activity Codes, such as T and F awards, additional cost considerations are provided in Chapters 9-19 of the NIH GPS.

Each non-federal sponsor will establish its own policies for cost considerations. 2 CFR 200 is not applicable to non-federal awards.

To charge a cost to a sponsor, the cost must meet all of the following criteria:

• Allowable
• Necessary and reasonable
• Allocable
• Consistently treated as either a direct cost or indirect cost

4.3.1 Allowability

A cost must be allowable by the terms and conditions of the award. To determine allowability, PIs and research administrators should carefully review the award terms and conditions, sponsor requirements, and the selected items of cost. A cost is generally allowable if it was included in the proposal and accepted by the sponsor, though some sponsors may still require prior approval before those costs are incurred on an award. If a cost meets all the criteria under 2 CFR 200.403, then that cost generally is considered allowable.

4.3.2 Necessary and Reasonable

A cost must be necessary for the successful completion of the project, and the price must be reasonable. If a cost meets all the criteria under under 2 CFR 200.404, it is generally considered necessary and reasonable.

It is important to note that the federal cost principles require computing equipment to be "essential" for a sponsored project. The "essential" threshold is more rigorous than the "necessary" threshold.

4.3.3 Allocability

A cost can only be charged to an award in proportion to the benefit that award receives from the cost. Items of cost that benefit multiple activities, such as sponsored projects and University-supported activities, must be charged to each activity.

Common costs that must be allocated include:

• Equipment used on multiple activities
• Large supply purchases that benefit multiple activities
• Travel costs that benefit multiple activities

The allocation method for each cost must be documented and retained for audit purposes. The allocation method must be revised as necessary. Criteria for allocability is provided under 2 CFR 200.405.

4.3.4 Consistency

The University must generally treat costs consistently as either a direct cost or an indirect cost. To charge a typical indirect cost directly to an award, the cost must either have been included in the proposal and accepted by the sponsor or be approved by OGC.

The University prohibits the following actions related to direct charges on a sponsored project:

• Rotating charges among sponsored projects by month without establishing that the rotation schedule credibly reflects the relative benefit to each grant
• Assigning charges to the sponsored project with the largest remaining balance or using other bases outside of the benefit to the project
• Charging the budgeted amount instead of charging an amount based on actual usage
• Assigning charges to sponsored projects in advance of the time the cost is incurred
• Assigning charges to sponsored projects for costs incurred outside of the project period, including a pre-award period, if applicable
• Identifying a cost as something other than what it actually is
• Charging expenses exclusively to sponsored projects when the expense also supports non-sponsored project activities
• Assigning charges that are part of the normal administrative support for contracts and grants (e.g., proposal preparation, accounting, payroll)
• Charging to sponsored projects that are ending to expend funds without regard to the appropriateness of the costs
• Shifting costs to other sponsored projects due to cost overruns, avoidance of restrictions imposed by law, or for convenience. Convenience would include charging a direct cost to a project on a temporary basis, pending the set-up of a new project account number
• Charging administrative costs directly to sponsored projects because the administrative unit requires the PIs to fund these costs (e.g., telephone, office supplies)

Additionally, special consideration should be given when using sponsored funds for equipment or large supply purchases in the last few months of an award. Sponsors and auditors are likely to scrutinize these purchases, as they may indicate an attempt to spend down remaining funds without regard to the cost principles. PIs and their administrative units should discuss equipment and large supply purchases in the final months of an award with OGC before proceeding with the purchase order.

The University should consistently treat costs as either direct or indirect costs. In certain circumstances, indirect costs may be directly charged to an award when those costs have been included in the proposal and accepted by the sponsor, or with OGC approval.

PIs and their administrative units are required to complete the Sensitive Cost Checklist and submit the form to OGC for approval to charge an indirect cost to an award. OGC must approve the request before a PI or administrative unit directly charges a typical indirect cost.

Salary charges must reflect the time and effort each employee has worked on a project. Faculty and exempt professional staff are not required by the University to track hours on a daily or weekly basis, but should maintain a reasonable estimate of their average effort each semester to provide an accurate breakdown of effort.

Salary charges are based on each employee’s institutional base salary (IBS), which is the annual compensation paid by the University for research, instruction, patient care, administration, or other activities. The IBS excludes bonus payments, extra compensation, and any income earned outside of University employment. IBS information can be accessed through HCM. Employees on the Anschutz Medical Campus are typically on a 12-month appointment, while employees on the Denver Campus may be on either a 12-month or a 9-month appointment, with the option for three months of summer salary.

Some sponsors may impose a salary limitation, or salary cap, on their awards. All Public Health Service (PHS) agencies must comply with the PHS Salary Cap, which is tied to the Executive Level II of the Federal Executive Pay Scale. The NIH Salary Cap Summarywebsite provides current and historical data. If an employee’s IBS exceeds the salary cap, the administrative unit is responsible for covering the salary costs that exceed the sponsor's cap. Additional information on salary caps can be found on the OGC website.

For institutional training grants (T32, T90, TL1) and individual fellowships (F32), the stipend level for the first year of support is determined by the number of full years of relevant postdoctoral experience when the award is issued. Relevant experience may include research, teaching assistantships, internships, residencies, clinical duties, or other time spent in a health-related field beyond the qualifying doctoral degree. Once the stipend level is determined, the trainee or fellow must be paid at that level for the entire grant year. The stipend for each additional year of Kirschstein-NRSA support is the next level in the stipend structure and does not change mid-year. Additional information about training stipends can be found on the NIH website.

Fringe benefits are charged to sponsors based on the actual fringe benefit costs for each employee.

Information and resources regarding postdoctoral scholars can be found on the University’s Postdoctoral Office website.

The University uses electronic Personnel Effort Reports (ePERs) to certify time and effort on federally sponsored projects in compliance with 2 CFR 200.430. The ePER documents the amount of time and effort an individual has contributed to a federal award, compared to the proposed time and effort. The University also uses ePERs to document any effort that is part of cost sharing on a sponsored project. Employees are responsible for submitting timely and accurate ePERs; failure to comply is a violation of federal regulations and University policy.

Every employee who is paid from or has committed cost-sharing effort to a sponsored project must certify an ePER. Hourly employees do not complete an ePER, but they must certify their project effort on their timesheet by going to the CU Resources tab in the employee portal, selecting "Business Applications," and clicking on the ePER link.

University employees are required to certify their ePER each semester:

• Fall (September-December)
• Spring (January-May)
• Summer (June-August)

The Office of University Controller sends email notifications when ePERs are ready for certification.

Departmental research administrators do not complete an ePER unless a portion of their salary is paid directly from a federal award.

The term “time and effort” encompasses the entirety of an employee’s work at the University. It is not based on a 40-hour work week. Effort is reported as a percentage of total work, and total effort cannot exceed 100%.

Effort includes all work performed as a university employee, including:

• Research
• Teaching
• Service
• Chair duties
• Proposal writing
• Clinical work
• Administrative duties

Any effort that is not paid by the University is not considered part of the university’s effort and cannot be included in the University’s ePERs. For example, employees working at the VA Hospital or in private industry would not include those hours and would certify their ePER for the 100% effort that is provided at the University, regardless of the number of hours worked outside the University.

ePERs must be certified within 120 calendar days from ePER creation. Research administrators can run the “Uncertified ePERs by Org(s) or Campus” report in CU-Data to identify which employees have not certified their ePERs and remind them of their responsibilities. PIs, or their designee, are responsible for certifying ePERs for employees who no longer work at the University.

Errors on the ePER must be corrected before certification, and the ePER must be uncertified if there are any mistakes. To correct payroll issues, a PET may be required to reflect the actual effort, and the funding distributions for employees may need to be updated. Research administrators should work with their HR Administrators for assistance in updating funding distributions.

PIs should be aware of award terms and conditions relating to time and effort. Most federal awards require prior approval when there is a 25% reduction in time devoted to the project, per 2 CFR 200.308. The 25% reduction is cumulative over the period of performance.

Cost-sharing obligations on federal awards may be met by the University paying for a portion of salaries and fringe benefits on a sponsored project. Employees must meet all mandatory or voluntary committed cost-share effort in addition to the effort paid by the sponsored project. An ePER must reflect when an employee has contributed 5% or more of voluntary uncommitted cost share.

Under 2 CFR 200.430, the University must ensure that all salaries and associated fringe benefits are accurately charged to federal awards and that the charges reflect the actual effort expended on the sponsored project. Failure to certify a timely and accurate ePER can result in disallowed costs for associated salary and fringe benefits and other penalties, as provided for by 2 CFR 200.

The Office of the University Controller provides a ePERs and Resources website, and additional information regarding ePERs is found on the OGC website.  Questions and requests for assistance may be emailed to OGC at [email protected].

Some costs are classified as "sensitive expenses" due to the potential for non-compliance, audits, and sponsor reviews. Such costs include:

• Alcohol
• Computing equipment
• Meals
• Moving expenses
• Recognition expenses
• Travel
• Tips
• Visas

All costs charged to a sponsored project must conform to University policies and sponsor requirements. Additional information can be found in the University’s Finance Procedural Statement: Sensitive Expenses. Moving and relocation costs must adhere to the University’s Moving and Relocation Expense Reimbursement Policy.

Cost sharing refers to the portion of a sponsored project that is not supported by the sponsor and is instead funded by the University or a third party.

There are three types of cost sharing:

• Mandatory Committed Cost Sharing: The cost-share funds required by a sponsor, as identified in the notice of award.
• Voluntary Committed Cost Sharing: The cost-share funds provided in the proposal, in excess of the mandatory committed cost share requirements. If approved by the sponsor, this voluntary committed cost share becomes an obligation for the PI to meet.
• Voluntary Uncommitted Cost Sharing: The cost-share funds provided in the post-award phase, in excess of the committed cost share. The University highly discourages the use of uncommitted cost share, as the respective administrative unit is responsible for paying these costs.

Cost sharing is typically not appropriate for projects sponsored by for-profit entities. For federal research awards, voluntary committed cost sharing cannot be considered during the merit review process unless otherwise required in the funding opportunity announcement. Cost-share obligations cannot be met through a salary differential with the PHS Salary Cap and generally cannot be met by using sponsored funds from another project. Cost sharing may be funded by Unrestricted General Fund programs, Auxiliary and Self-Funded Activity Fund programs, and Gift Fund programs.

A PI must work with their respective administrative unit to obtain the necessary approval to include cost share in a proposal. Departmental approval is required because cost sharing represents a redirection of departmental resources to support sponsored projects. The effectiveness and expected benefits of each cost-sharing agreement should be evaluated against the administrative requirements and responsibilities inherent to the PI, the department, and central administration. Departments approve proposed cost share by providing signature approval on the Cost Share Request form, which must be included in the routing to OGC before submission to the sponsor.

The PI and their respective administrative units are responsible for identifying, tracking, documenting, and meeting all cost-share obligations and requirements. Committed cost share, whether mandatory or voluntary, is legally binding. PIs and their administrative units are responsible for any disallowance or loss of funding due to failure to meet any cost-share obligations.

Committed cost sharing is indicated on an ePER. Employees should be notified of their committed cost share before the start of the award and should be made aware of the importance of meeting those obligations. ePERs must reflect any voluntary committed cost share of 5% or more of an employee’s time and effort.

The University requires cost sharing expenditures to be:

• Verifiable by the University
• Used as cost sharing for only one sponsored project
• Allowable under the award terms and conditions
• Properly allocated
• Necessary and directly related to the project’s objectives
• Provided for in the approved budget when required by the sponsor
• Not paid by the federal government under another award, except where authorized by statute to be used for cost sharing
• Incurred during the applicable period of performance of the award
• Recorded in a separate project if there is a specific mandatory dollar amount of cost sharing or nonpayroll voluntary committed cost sharing
• Recorded in a separate project if there is a cost overrun of $50,000 or more of non-faculty/professional salary/benefit expense, or cost overrun of non-personnel expense

 

The University allows the following expenditures to be used for cost sharing:

• Faculty, staff, or student salaries and fringe benefits (in most cases)
• Laboratory supplies
• Travel
• Waivers of indirect costs: With appropriate approvals, waivers or reductions of the indirect cost rate may be used as cost sharing. The sponsor must approve the use of a lower indirect cost rate and allow the difference to be used to meet cost-share obligations. Additionally, the University must provide approval to use a lower indirect cost rate in the proposal. These requests are granted in limited circumstances and only with adequate justification.

 The University prohibits the following expenditures as cost share:

• Expenditures that are normally charged as indirect costs, such as administrative salaries or office supplies
• Any cost unallowable under the award terms and conditions
• Equipment, unless required by the sponsor
• Service Center expenses

Program income refers to gross income directly generated by a sponsored project or as a result of a sponsored project. Program income includes, but is not limited to:

• Income from fees for services performed (e.g., laboratory tests)
• Charges for the use or rental of real property, equipment, or supplies acquired under a sponsored project
• The sale of commodities or items fabricated under an award
• Charges for research resources
• Registration fees for grant-supported conferences

Unless otherwise specified in the award terms and conditions, program income must be used for the award that generated the funds. The University, PI, or administrative unit may not retain program income received during the period of performance. Sponsors generally allow institutions to retain program income generated after the period of performance.

The PI and their administrative unit should review the proposal to identify sources of actual or potential income from the project. The proposal should disclose anticipated or potential program income, provide an estimate of expected income, and describe how the funds will be used on the project. It should also identify any potential program income from subrecipients. The funding opportunity announcement will outline program income requirements. The routing form should reflect anticipated program income and the establishment of a speed type to track the program income will be necessary.

During the post-award phase, the PI and their respective administrative unit must track program income in a speed type and ensure compliance with sponsor requirements. Research administrators should work with OGC Post Award administration if unexpected program income is generated. Program income must be reported on federal financial reports.

Program income must be used in accordance with the award terms and conditions. It may be used in one or more of the following ways when allowed by the sponsor:

• Additive Method: Program income is added to the award and may be used to further eligible project objectives.
• Deductive Method: The sponsor’s share of the project is reduced by the amount of program income.
• Combination Method: The sponsor treats the first $25,000 under the additive method and any additional amount under the deductive method.
• Cost Sharing or Matching Method: Program income may be used to meet the cost-sharing requirements of the award, if approved by both the University and sponsor. The total amount of the award remains the same.

Unless required by the award terms and conditions, program income earned from license fees and royalties for copyrighted materials, patents, patent applications, trademarks, and inventions made under a federal award subject to the Bayh-Dole Act are not reported to the federal government. PIs are encouraged to work with the appropriate technology transfer office to determine the applicability of reporting requirements for license fees and royalties.

Considerations for Program Income:

• Award terms and conditions may allow nominal fees to cover shipping costs for samples or materials developed under the award. Income from these fees is generally treated as program income.
• Under federal research awards, proceeds from the sale of equipment or supplies are generally not considered program income.
• Fees resulting from clinical practice, professional consultation, or other comparable activities performed by a trainee generally cannot be retained by the trainee and are typically treated as program income.
• Generally, sales proceeds from materials developed under an award are considered program income.
• PIs and their administrative units are responsible for monitoring program income generated by subrecipients and ensuring compliance with award terms and conditions.
  

Additional information is available on the OGC website.

Applicable credits are rebates or refunds provided by a supplier or vendor from a purchase. Applicable credits are not considered program income. Under 2 CFR 200.406, applicable credits must be credited to the federal award as either a cost reduction or cash refund. PIs and their administrative units should notify OGC when applicable credits occur to ensure compliance with federal regulations.

Administrative units should complete a monthly reconciliation for all sponsored projects. During reconciliation, each cost should be scrutinized to ensure it is allowable, charged to the correct speedtype, properly allocated, and classified with the correct account codes. Any incorrect charges must be corrected with a cost transfer as soon as possible. Monthly expenditures should also be compared against the approved budget to identify potential overspending and determine if rebudgeting is necessary. A financial reconciliation must also be completed before an invoice or financial report is submitted to a sponsor.

While research administrators are generally tasked with completing financial reconciliation, PIs are responsible for being fully aware of all financial aspects of each project.

The University’s “Quick Reference for Sponsored Projects Expenditures on Federal Awards” is a resource to determine if an account code can be charged to a sponsored project.

A cost transfer is a request to move a cost from one speedtype to another due to an error resulting in a direct expense being charged to an incorrect project or to properly allocate costs across multiple projects. The University uses two types of cost transfers:

• Payroll Expense Transfer (PET) for salaries and associated fringe benefits
• Journal Entry (JE) for all non-personnel costs

Administrative units are responsible for completing the cost transfer and submitting the request to OGC. OGC will review the cost transfer request and approve or reject it. The employee submitting the cost transfer must certify that all expenses are:

• True and correct
• Reasonable, allowable, and allocable
• In accordance with the award terms and conditions

Cost transfers cannot be used to transfer costs:

• Solely based on funding availability
• To relieve an over-expenditure on another program or project
• To address a non-compliance situation on another program or project
• In anticipation of an award

Cost transfers must adhere to the following requirements:

• The cost transfer must be submitted within 90 days of discovery of the error. If errors are not discovered within 90 days of the expense transaction date, additional explanation is required to justify the delay and describe how future delays will be avoided.
• The cost transfer request must be supported by documentation that explains how the error occurred and the actions taken to prevent it from happening again. A mere explanation stating the request is to “correct an error” or “transfer to the correct project” is not sufficient.
• All inappropriate expenditures must be removed from sponsored project accounts once the error is identified, regardless of when the error occurred.
• Departmental review of financial reports should be completed regularly to identify and correct all errors. While the University recommends monthly reconciliation of all accounts, departmental policies may vary.
• Extra documentation is required for the following situations:
• A program/project is in deficit status
• Unexpended funds exist at the end of a program/project
• The cost transfer is requested more than 90 days after the transaction date
• All JE and PET requests, along with supporting documentation and employee certification, are retained in the PeopleSoft Finance system in accordance with the University’s record retention policy and award terms and conditions.

• The OGC PET Checklist or JE Checklist must be completed and submitted with the cost transfer request.

 Additional information and resources regarding cost transfers are available on the OGC website.

Rebudgeting is often necessary on sponsored projects to address cost increases or to purchase unexpected, but necessary, resources. The flexibility for rebudgeting authority varies among sponsors, types of awards, and categories of cost. It is the responsibility of the PI and their administrative units to understand and comply with the award terms and conditions.

Federal research awards generally provide the ability to rebudget up to 25% of the current budget period. Federal non-research awards typically provide rebudgeting authority up to 10% of the current budget period. All federal awards require prior approval before rebudgeting participant support costs. Prior approval is also required when rebudgeting will result in a scope change. The requirements for non-federal awards will vary by sponsor.

NIH requires prior approval for significant rebudgeting, which occurs when expenditures in a single direct cost budget category deviate (increase or decrease) from the categorical commitment level established for the budget period by 25% or more of the total costs awarded. The base used for determining significant rebudgeting excludes the effects of prior-year carryover balances but includes competing and non-competing supplements. Significant rebudgeting does not apply to modular grants.

Rebudgeting requirements for non-federal awards will vary.

Administrative units must submit rebudgeting request to OGC by completing the Re-budget Request Form. Additional information is available on the OGC website.

OGC is responsible for submitting financial reports to sponsors. Before OGC can submit a financial report, administrative units are responsible for completing an accurate and timely financial reconciliation. Failure to complete an accurate financial reconciliation can result in the submission of inaccurate or delinquent financial reports, which may cause delayed funding or penalties for noncompliance

 Additional information about financial reporting is available on the OGC website.

A cost overrun occurs when the actual costs of a project exceed the award budget. PIs are responsible for continuously monitoring project finances and expenditures to prevent cost overruns and for resolving any overruns in a timely manner. However, it is recognized that, in carrying out sponsored projects, it may sometimes be necessary to incur cost overruns temporarily while alternate resources are identified, to ensure the work performed under the sponsored project is not adversely affected by the delay.

Cost overruns may only be charged to another sponsored project if the costs conform to the cost principles and award terms and conditions. If cost overruns cannot be charged to a sponsored project, they must be charged to a departmental speedtype.

OGC is responsible for managing billing activities and follow-up for past-due invoices for most sponsored projects at the University. OGC is also responsible for drawing down funds from the federal government payment management systems and applying the funds to the appropriate speedtype. Administrative units are responsible for billing and invoicing for non-federal clinical trials.

 The University’s financial system identifies four contract types:

• CR – Cost reimbursable: The University is reimbursed for the actual incurred costs of the project.
• LC – Letter of Credit: Federal drawdowns are treated as a cost-reimbursable award.
• IB – Installment Based: Payment is made on a predetermined schedule.
• FR – Fixed Rate: Used for clinical trials, and payment is based on invoicing rather than expenses.

OGC invoices the sponsor based on the award terms and conditions. If the invoice is for a fixed price, OGC invoices the fixed-price amounts and time frames. If invoices are based on expenses, expenses are pulled from the General Ledger on either a monthly or quarterly basis. PIs and research administrators may review a project’s financial statements to determine the expenses included on the invoice.

Submitting timely and accurate final invoices is critical in the closeout process. The award terms and conditions will identify when final invoices must be submitted. Generally, sponsors provide either 30, 45, or 60 days to submit the final invoice after the budget or project end date. Depending on the award terms and conditions, sponsors may have no obligation to pay a late invoice.

Before OGC can submit the final invoice, PIs and their administrative units must complete a final reconciliation of the project’s finances and verify all allowable expenses have been posted. All unallowable expenses must be removed one month prior to the final invoice due date.

Additional information is available on the OGC website. 

OGC is responsible for depositing funds from sponsors and applying those funds to the appropriate speedtype.

Sponsors making payments via check should make the check payable to “The University of Colorado Denver” and mail it to:

University of Colorado Denver 
Office of Grants and Contracts - F428 
PO Box 209436 
Dallas, TX 75320-9436
United States

For electronic payments, the administrative unit must contact the Accounts Receivable team at [email protected] for payment information.

All checks for fund 30, 31, and 35 should be deposited by the Office of Grants and Contracts. The checks can be left at the Bursar Office Drop Box located in Education 2 North, 3rd floor – Room 3120A. The check should be accompanied by a cash receipt form with the speedtype and account code.

Employees can review and verify sponsor p[email protected] payments by using the Balance Sheet transactions reports in PeopleSoft. Cognos also provides a Payments Received report.

PIs and administrative units may contact for questions regarding payments. When contacting OGC, please include:

• Check number
• Amount
• Date of Check
• Project or Speedtype
• Any other relevant information

The University’s Account Receivable Policy establishes guidelines for departments when selling goods and services on credit to external customers with a future payment or collection date. This policy applies to both sponsored and non-sponsored projects.

Additional information is available on the OGC website.