recharge centers vs. program income: how to comply with a-21 and a-110
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Recharge Centers vs. Program Income: How to Comply with A-21 and A-110. Concurrent Session March 12, 2013. Agenda. Introductions Definitions and Applicable Regulations and Guidance Service Centers Program Income Service Center or Program Income, or Both? Considerations Examples. - PowerPoint PPT PresentationTRANSCRIPT
Recharge Centers vs. Program Income: How to
Comply with A-21 and A-110Concurrent Session
March 12, 2013
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• Introductions• Definitions and Applicable Regulations and Guidance
– Service Centers– Program Income
• Service Center or Program Income, or Both?– Considerations– Examples
Agenda
3
Definitions and Applicable Regulations and Guidance
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• Described in the DS-2, Part III, item 3.2.0 as “Service Centers”
• Described as “departments or functional units which perform specific technical or administrative services for the benefit of other units within a reporting unit.”
• Service centers include “specialized service facilities” and “recharge centers”.
Service Centers
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• Specialized service facilities– Animal Care Facility
• University-wide recharge centers– Facilities Management
– Copy/Duplicating
• Departmental recharge centers– Machine Shop
– Stock Room
Service Centers
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• 2CFR, Part 220 (Otherwise known as A-21)– Direct Costs (C.4.a)– Consistency (C.11)– Indirect Cost (F.6.b)– Specialized Service Facilities (J.47)
• HHS Review Guide for Long Form University Indirect Proposals• Disclosure Statement (DS-2)• Federal Audits of Recharge Centers (HHS OIG)• A-133 Compliance Supplement
– Internal service, central service, pension, or similar activities
Service Centers – Regulations and Guidance
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• Program income is defined as:– Gross income received by the grantee, a consortium participant,
contractor or subgrantee directly generated by a grant supported activity, or earned only as the result of the grant agreement during the grant period.
– “Grant period” refers to the time between the effective date of the award and the ending date of the award reflected in the final financial report.
Program Income
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• Program income earned during a project period shall be retained by the University and is usually treated using one of three methods, depending on policy, sponsor type, and/or terms and conditions of the award. Federal regulations define the following three methods for recording program income:– Additive– Deductive– Matching Alternative
Program Income
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• OMB Circular A-110 – Program Income (C.24)http://www.whitehouse.gov/omb/circulars_a110#24
• NIH Grants Policy Statement– Program Income (Part II, Subpart A, 8.3.2)http://grants.nih.gov/grants/policy/nihgps_2012/nihgps_ch8.htm#_Toc271264957
Program Income – Regulations and Guidance
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Service Center or Program Income, or Both?
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• Can a department have revenue and not have a service center? What if:– it is part of a center grant?– the grant program or program officer specifically requests that
services be provided?– Federally provided resources are used to provide services?
Considerations
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• Discuss seven examples and review:1) Description of the situation2) Allowability of cost3) Factors in determining rates4) Treatment of income
Examples
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• Institution A receives a grant to provide patient care services.• Some of the patients pay for the services.• How are the payments to be treated?
Example 1
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• Institution A receives a grant that provides instrumentation and technology to perform certain tests.
• This technology is used almost exclusively within the grant providing the instrumentation.
• Institution B requests use of the technology on privately sponsored grants.
• Can Institution B use the technology?
Example 2
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• You purchase equipment on a Federal grant.• After the grant has been completed and the title vests with
the institution, the equipment is assigned to a service center.• Can the service center include depreciation on the equipment
within the rates?
Example 3
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• You receive a center grant and the program officer suggests that you provide services to other institutions at a specific rate.
• The lower rate is the result of the grant subsidizing the service.
• Can you provide this rate to other institutions?
Example 4
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• A PI requests permission to perform certain tests for a private company using technology and equipment provided by a Federal grant.
• The PI wants to charge a premium price, significantly above cost.
• Can he do that?
Example 5
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• Department A receives a grant from one Federal agency and Department B receives a grant from a different agency.
• Department A wants to charge Department B for using equipment provided by the grant.
• Can they do that?
Example 6
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• Mechanical Engineering sets up a service center to provide testing for local manufacturing using a process previously used for a Federal grant.
• The staff doing the testing learned the technique while working on the grant, however the equipment, supplies and staff are all paid from the center.
• Is there program income?
Example 7
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• Definitions and Applicable Regulations• Considerations
– Allowability of Costs– Factors in Determining Rates– Treatment of Income
• Examples
Summary
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Questions?