SUPERCEDED - Ohio University Policy and Procedure

Administering Federal Grants and Contracts

SUPERCEDED on July 18, 2012

Current Version

Procedure No.:   19.045

Page No.:        1,2,3,4,5,6,and 7 of 7

Date Issued:     02/01/95

Issued By:       T.L. Chestnut

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To provide a policy and procedure for administering financial transactions applicable to federal grants and contracts (including-subcontracts). This policy does not apply to student financial aid programs.


It is the policy of Ohio University to administer federal grants and contracts and subcontracts in accordance with applicable federal regulations.



A separate restricted account will be established for each sponsored project and expenditures of project funds will be recorded as they occur in that account. Sponsored project funds may not be included in a rotary account and administered nor may project expenses be routinely recorded in a department account on the expectation that a single transfer of charges at the end of the project period will be made.

Upon receipt of notification of an award, the project director should contact the Office of Research and Sponsored Programs (ORSP) to have a restricted account established for the project in the College &;University Financial System (CUFS). The project director will be expected to provide a notice of award, a signed contract, or other documentation clearly showing a commitment on the part of the sponsor before an account number will be assigned. The following documents are also required but, in most instances, will already be available at the ORSP:

A. The proposal.

B. A fully completed, signed proposal transmittal form.

C. Applicable administration guidelines or regulations.

D. Guidelines for preparation of the proposal.


Restricted Fund Accounting (RFA) Grants and Contracts, within the Treasurer's Office, has been assigned the responsibility to monitor the expenditure of all federally sponsored project funds. Accordingly, all documents which cause or authorize such expenditures must be sent to RFA for recording and approval. This includes employment contracts for faculty and staff, graduate students, technicians and post-doctorals; biweekly payroll time summary sheets for civil service and student hourly employees; requisitions; and travel expense reports.

A. Compensation for personal services of university personnel

Compensation for services of university personnel, including undergraduate and graduate students, civil service employees, post-doctorals, faculty and administrative staff will be on the basis of established university employment and payroll procedures. These procedures require the use of the presidential contract form or the part-time addendum contract form for payment to University personnel, except students and civil service employees, for personal service. Payment to civil service and student hourly employees is on the basis of biweekly time salary sheets supported by a time sheet. Payment to students on a graduate appointment is on the basis of a contract. The use of requisitions for payment for personal services of university personnel is not allowed. University policies regarding equal employment opportunity and student employment are equally applicable to sponsored programs. Compensation for personal services of university personnel will be on the basis of their regular appointment, pro-rated for the period of service rendered. Federal regulations governing most sponsored agreements with universities do not permit extra compensation to be paid for work performed during intersession periods, except for work which meets the conditions specified in paragraph III-C, Overload Compensation.

B. Summer salary for faculty

Summer salary will be based on the individual's salary for the academic year immediately following the summer period. A maximum of one-third of the academic year salary will be payable for full time effort for a three month (thirteen week I period. If the interval between the end of Spring quarter (Convocation day) and the start of Fall quarter (advising day) is less than 13 weeks, the maximum allowable pay for full-time effort during the summer will be limited to 1/39 of the academic-year salary base times the number of weeks in the interval. The policies of some agencies restrict payment, with agency funds to less than three month's salary during the summer; for example, the National Science Foundation permits payment of no more than two months of salary in that time. Such policies will be observed at Ohio University.

A faculty member who receives full support (three month's salary) from sponsored project funds during the summer must devote full time to the sponsored project. He/she may not direct dissertation research, except to the extent that such research, is directly related to the paid employment of the graduate student on the sponsored project from which the faculty member draws summer salary. A faculty member who receives three month's summer salary from a sponsored project may not be the teacher of record of a graduate student who enrolls for dissertation research for credit unless the dissertation research is closely related with the student's participation in the sponsored project.

In a like manner, the faculty member may not devote any significant amount of time to committee work or student advising during the summer when he/she receives three month's of salary from a sponsored project. The Faculty Activity Report for the summer period for an individual receiving such support is expected to show that 100 percent of I is/her time was devoted to the sponsored project.

In those instances where less than three months of summer salary is paid from sponsored project funds the amount of effort which may be devoted to advising, committee work, and directing graduate research is in proportion to the amount of time not committed to the sponsored project(s) during the summer period.

Individuals who receive summer salary in the amount of one-third of their academic year salary, or a lesser amount because the summer interval is of less than 13 weeks duration, and whose effort, consequently, is committed on a full time basis to the entire summer period, may take a vacation of no more than two weeks duration, provided that an equal amount of time is devoted to the sponsored project during the fall-winter intersession period immediately preceding or following the summer period. No added compensation will be allowed for such replacement effort. This option is not available to persons who receive less than full-time support during the entire summer period.

C. Overload compensation for university personnel

Federal regulations permit supplemental compensation for intra-university consulting only in unusual cases and only when it is consistent with Ohio University Policy concerning overload payment (#41.002). These regulations specify that faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member at Ohio University may receive compensation in excess of their full-time base salary only if the arrangement for consulting or other collaboration meets all of the following conditions:

  1. the consultation is across departmental lines or involves a separate or remote operation,

  2. the work performed by the consultant is in addition to his/her regular department load,

  3. the consulting arrangement has been specifically provided for in the sponsored agreement or approved in writing by the sponsoring agency.

  4. the consulting arrangement has the approval of the faculty member's dean.

Compensation for intra-university consulting normally will be on the basis of a 195 work-day (9 months) academic year for faculty and a 260 work day (12 months) year for persons on a fiscal year appointment. Other bases for overload pay are allowable in situations where the pay is unrelated to effort, such as when a flat fee is paid for delivering a lecture at a conference, or when pay for teaching a course in a period not included in the base salary period is in accordance with established university policy (regional campus teaching, evening courses through the Extension Division, or Workshops).

D. Consultants

Consultants, including those persons who are employees of Ohio University will be employed only when all of the following conditions are met:

  1. The consulting services are essential and cannot be provided by persons receiving salary support from the sponsored project.

  2. A selection process has been employed to secure the most qualified person available and that the selection has been approved by the cognizant dean.

  3. he charge is appropriate considering the qualifications of the consultant and his/her normal charges for the services rendered.

  4. If the consultant is an employee of Ohio University in a faculty position the conditions specified in paragraph C - Overload Compensation must be met.

  5. If the consultant is an employee of Ohio University in a non-faculty position, the work involved must be clearly outside the scope of that person's salaried employment and must be approved by that person's immediate supervisor.

Payment for consulting service should be requested on an addendum contract if the consultant is an Ohio University employee and on requisition if the consultant is not an Ohio University employee. The addendum contract or requisition must be accompanied by a properly completed Consultant Service Form or equivalent documentation. Some federal sponsor agencies have established maximum, daily rates which may be paid to consultants. These rates may not be exceeded unless specific written authorization is received from the cognizant project officer at the sponsor agency.

E. Equipment

Most federally sponsored projects impose limits on the amount of money which may be spent for equipment and the type of equipment which can be purchased. As a general rule, if the equipment is identified in the approved budget, no additional approval is needed from outside the university. The ORSP should be consulted when making equipment purchases which are not so identified or if the purchase will exceed the approved budget for equipment.

F. Travel

University policy regarding reimbursement of travel expenses (No. 41.121) will be followed for travel supported by sponsored projects.

G. Other Specialized Facilities

Direct charges to sponsored projects for use of other specialized facilities may be made only with the prior approval of the ORSP. Such charges normally are not allowable unless a cost study has been made to support the basis for a charge.

H. Indirect Costs

Indirect costs, commonly called overhead, are provided for in sponsored agreements to reimburse the university for costs which are not readily identifiable as to amount and, therefore, cannot be recovered as direct charges. Some indirect costs rates are set by statutes or regulations and others are negotiated, on the basis of an extensive cost study, with the Department of Health and Human Services Audit Agency. It is the policy of Ohio University to collect the maximum indirect costs allowable on any project and any plan to forego indirect costs must be approved by the Vice President for Research and Graduate Studies. Such plans or requests should be submitted to the ORSP for recommendation to the Vice President for Research and Graduate Studies.


The selection of recipients for financial assistance on training grants must be in accordance with the terms of the grant. The services of the Student Financial Aids Office should be used to assist in the process of eligibility determination but the final decision in selecting from among eligible candidates will be made by the project director. Records pertinent to the eligibility deter- mination must be retained by the Student Financial Aids Office for audit purposes.


Federal regulations specify the extent of allowable changes in the approved project budget. Changes which exceed the allowable limits generally must have the prior approval of the cognizant project officer at the sponsor agency. In some instances, specifically with grants from the National Science Foundation and the Department of Health and Human Services, approval for certain budget changes may be obtained via the Organizational Prior Approval System (NSF) or the Institutional Prior Approval System (DHHS). Responsibility for operation of these prior approval systems at Ohio University has been assigned to the ORSP.

Prior approval is required for the following activities:

A. Expenditures in excess of $500 or 125 percent of the amount budgeted for domestic travel, whichever is greater.

B. Expenditures for foreign travel.

C. Purchase of any item of equipment with a unit acquisition cost of $1,000 or more.

D. Expenditures for equipment when the total acquisition cost in a budget period exceeds 125 percent of the amount budgeted for equipment.

E. Rebudgeting of funds in or out of traineeships.

F. Expenditure of funds for alterations and renovation of facilities.


A. Contract Personnel

University contract personnel, including faculty, administrators and students on graduate appointments, who receive compensation on a regular basis-during the academic year or summer from a sponsored project, must submit quarterly Effort Reports. The Effort Report will reflect an after-the-fact reporting of the individuals activity, and will account for 100% of the activity for which he/she is compensated and which is required in fulfillment of his/her obligations to the University. The Effort Report must be signed by the project director or other person having direct knowledge of 100% of the activities reported. If the individual is involved in a number of activities under different supervisors and no single person other than that individual has first hand knowledge of all of the activities, the Effort Report must be signed by that individual. Effort Reports on a monthly basis may be required by the RFA where such reports will facilitate project management. Effort Reports for contract personnel shall be forwarded by the Project Director to the RFA no later than the 20th of the month following the period (quarter or month) in which effort was expended on the project.

Effort Reports are not required when the compensation is for overload effort as set forth in paragraph III-C.

B. Civil service personnel and students on hourly payroll

Effort reporting for civil service personnel and students on the hourly payroll who receive compensation from a sponsored project shall be via the biweekly time sheet prepared for payroll purposes and submitted in accordance with regular payroll schedules.


Expenditures of project funds will be recorded as they occur in the restricted account for that project. Project expenses may be routinely recorded in a department account or a rotary account on the expectation that a single transfer of charges at the end of the project period will be made. Some minor costs, such as telephone charges and photocopying, may be routinely charged to the department and transferred to the project account provided that the transfer is adequately documented and made in a timely fashion. Requests for transfers should be made via a memo, signed by the project director, to the RFA. The request should explain the purpose of the transfer and provide information concerning the original disbursement, i.e., requisition/purchase order number, for copying charges state number of copies, and rate per copy, and for telephone charges attach a copy of the bill. Transfer of charges from one sponsored project to another which represent clerical or bookkeeping errors must be made promptly after the error is discovered. The transfer must be supported by documentation which contains a full explanation of how the error occurred and a certification by the project director of the correctness of the new charge.

When closely related work is supported by more than one funding source, a cost transfer from the originally charged funding source to another project account may be made provided, a) the cost is a proper and allowable charge to the new account, b) the transfer is supported by documentation containing a full explanation and justification for the transfer, and c) the transfer is ordinarily made within 120 days of the original charge.


Cost sharing and matching requirements must be supported with the same degree of thoroughness as applies to expenditure of project funds. Matching or cost-sharing via personnel Time will normally be documented through the use of Effort Reports, and budget transfers will not be made. If the matching or cost-sharing is in nonpersonnel categories such as supplies, equipment or travel, the operating funds will be transferred fran the budget of the unit responsible for providing the matching or cost-sharing to the O.U./matching budget of the restricted (sponsored agreement) account. Expenditure of such funds will then be made from, and recorded in, the restricted account. The project director is responsible for providing the RFA with documentation of cost-sharing, especially when in-kind, as is deemed necessary by the manager of the RFA.

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Dick Piccard revised this file ( on July 30, 2012.

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