Handbook for Principal Investigators

SPENDING THE AWARD

"The University is great about making it easy for me to submit my proposal, but once I get the award, they won’t let me spend it!" Unfortunately, many faculty engaged in research feel this way. The philosophy of the Vice President for Research and the reporting units is to impose no more restrictions on principal investigators than that which is required by Federal law, State law, sponsor regulations, ABOR policy, or common sense. Unfortunately, the laws and regulations imposed on us by government are so voluminous and complicated, they overpower the Vice President’s minimalist philosophy.

University faculty and Federal auditors hold two opposing points of view: University faculty believe that their grant funds are their own to support their research group; Federal auditors believe that the grant funds are to support a very specific project. The Federal auditors will win this battle of philosophies because the regulations are on their side. In the current environment, the principal investigator has no choice but to thoroughly understand the rules relevant to their grants and ensure that their expenditure activity is in compliance.

Allowable Direct Costs
The most important test in determining whether a cost is allowable or not is the Relative Benefits Test. What proportion of the cost is directly related to the project? The project should bear no greater proportion of the cost than the proportion of the direct benefit to the project.

Other tests of allowability: Can the cost be specifically identified with the project relatively easily with a high degree of accuracy? Is the cost reasonable? Is the cost given consistent treatment on all sponsored as well as non-sponsored funds? Does the cost conform to the terms of the award, University policy, State Law, and Federal Law? Is the cost generally recognized as necessary for the performance of the sponsored agreement?

Examples of direct costs include:

• Salaries of technical staff
• Laboratory supplies (e.g., chemicals)
• Long distance phone charges
• Animals
• Animal care costs
• Computer costs
• Travel costs
• Specialized shop costs
• Research equipment repair and maintenance costs
• Data processing supplies
• Printing costs for technical reports
• Express mail

Proposal Costs
Proposal costs are the costs of preparing bids or proposals on potential Federally and non-Federally sponsored agreements or projects, including the development of data necessary to support the institution's bids or proposals. Proposal costs may be charged to indirect cost funds or other discretionary funds, but not directly charged to a sponsored project account.

Rebudgeting
The budget is an estimate of the spending plan for the project. The actual spending pattern will vary from the categorical budget breakout. The terms of your award will dictate how much the actual project expenditures may vary from the cost categories of the award budget.

For grants awarded under the terms of the Federal Demonstration Partnership (FDP), the investigator is not limited by the categorical breakout of the budget, unless the deviation from the budget represents a change in scope or objectives or if a significant part of the research is being transferred outside the University (usually in the form of a subcontract). As a rule-of-thumb, the NIH Agency-Specific Terms state that a deviation in a budget category of more than 25% of the total award may indicate a change in the scope or objectives of the project.

See UA Policy "Direct and Indirect Costs of Sponsored Agreements" for rebudgeting administrative costs on Federal accounts.

Sponsor Prior Approval
Requests for sponsor approval of budget deviations and requests for sponsor approval of specific items of cost should be addressed to the grants officer or contracts officer, with a copy to the program officer. All letters to sponsors requesting prior approval require the countersignature of the official institutional representative. This is both a sponsor and university requirement. Sponsored Projects will sign as the authorized institutional representative.

Mailing Address:
PO Box 3308
Tucson, AZ 85722-3308

Phone: (520) 626-6000
Proposal Fax: (520) 626-4130
Post Award Fax: (520) 626-4137
Email: sponsor@email.arizona.edu

The University of Arizona
All contents copyright © 2011. Arizona Board of Regents.