Professional Service Costs - B05.11
OHIO will ensure compliance with OMB 2 CFR §200.459 Professional service costs and §200.330 Subrecipient and contractor determinations for all Federal awards. Costs of professional and consultant services rendered by persons who are members of a particular profession or possess a special skill, and who are not officers or employees of the university, are allowable when reasonable in relation to the services rendered and required to meet the goals and objectives of the sponsored project.
OHIO must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient, professional service provider, or supplier.
This applies to all sponsored projects subject to OU Policy 19.045 Administering External Grants and Contracts set up as separate accounts in the OHIO Financial Management System (FMS).
All professional services agreements, including consulting agreements and some contractors, will be processed by the department of the Principal Investigator/Project Director (PI/PD) through BobcatBuy.
This procedure does not apply to subawards.
When external resources are necessary to complete a project, the PI/PD will identify the providing entity (when known), scope of work, cost, deliverables, etc. The PI/PD will refer to the Federal Demonstration Partnership (FDP) online tools to determine if the procurement is a professional service, supply, or subaward and whether or not the procurement is subject to Finance Purchasing contracting guidelines. The inclusion of a specific entity in the proposal does not circumvent the bidding requirement. Software development services are subject to further evaluation by OIT prior to procurement, see OHIO technology review for more information. When it is determined that the procurement is a professional service, the PI/PD will include a line item for professional service in the “Professional Services” category of the proposal budget. These costs are assessed indirect costs at the approved rate.
ORSP Budget Review
Based on the information received by the PI/PD at the time of proposal, the ORSP manager will do due diligence to confirm the procurement has been categorized correctly.
Ensure the proposal budget includes a line item for Professional Services, regardless of the sponsor’s definition of the expenditure. For example, the sponsor may include the procurement of service under supplies or other support, but the grants accounting system always posts these types of expenditures to Professional Services (EOC #725030). Use the Federal Demonstration Partnership (FDP) online tools to verify the correct categorization (e.g., subrecipient, professional services, or supplies). Review the sponsor guidelines to ensure allowability of the professional service. Ensure the proper indirect cost has been applied.
Post Award Process
Once the award is made the to the University and the account is setup by Grants Accounting, the PI/PD’s department will process the professional service agreement through BobcatBuy, according to the purchasing contracting guidelines. For further post-award instruction on preparing Services Agreements, access the Quick Reference Guide here.
ORSP provides budget preparation training upon request.
Forms and Templates
Roles and Responsibilities
CONTRIBUTOR: Procurement, ORSP, Grants Accounting, Department
APPROVER: Department and Procurement
OMB Circular 2 CFR §200.459 Professional service costs.
OMB Circular 2 CFR §200.330 Subrecipient and contractor determinations.