Once an award is made, its success is contingent not only on the ability of the PI to carry out the project but also on the ability of the institution to provide proper stewardship for the funds awarded. This stewardship should not be viewed so much as a control function but rather as a necessary function to ensure funds are spent in accordance with sponsor and university regulations so that future awards are possible.
While awards are issued to the institution, the PI plays a critical role in administering the funds appropriately. Principal investigators are generally in a position to make purchases, incur costs, obtain prior approvals, and take other steps that could result in noncompliance if sufficient understanding and importance are not placed on this role. OSP provides support and guidance regarding compliance and regulatory restrictions and provides an additional layer of oversight, but the PI retains the primary responsibility to ensure funds are expended correctly and the project meets sponsor requirements.
OSP offers educational and training opportunities related to financial and administrative compliance. Individual one-on-one opportunities with the assigned research administrator and research accountant are also available, and they can be the most effective means to share sponsor and university policies and regulations to ensure we maintain full compliance.
Cost Allowability
Costs on sponsored awards for educational institutions are determined allowable primarily based on federal regulations such as the Office of Management and Budget (OMB) Circular A-21 (Cost Principles for Educational Institutions), relocated to C CFR, Part 220; OMB Circular A-110 (Uniform Administrative Requirements for Grants & Agreements), relocated to C CFR, Part 215; OMB Circular A-133 (Audits of States, Local Governments, and Non-Profit Organizations); federal acquisition regulations; UNLV and state policies and procedures; UNLV’s accepted cost accounting standards; the awarding entity’s granting policies; and specific terms and conditions of an award.
OMB Circular A-21, Section C.2 establishes principles for determining whether charges can be applied to sponsored programs. The following four general requirements are necessary for a cost to be considered allowable:
- Reasonable: Defined as the action that a prudent person would take under the circumstances and determined by OMB Circular A-21, Section C.3.
- Allocable: A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship and under the principles and methods described in OMB A-21, Section C.4.
- Allowable: Costs must conform to any limitations or exclusions set forth in OMB Circular A-21 or in the agreement terms and conditions as to types or amounts of cost items.
- Consistently treated: Costs must be given consistent treatment through application of generally accepted accounting principles appropriate to the circumstances as dictated by cost accounting standards.
The complete circular is available at OMB A-21.