Research Accounting Services Key Definitions

A / B / C / D / E / F / G / I / K / M / N / O / P / R / S / T / U

A:

  • A-21 "Cost Principles for Educational Institutions," a circular published by the Federal Office of Management and Budget (OMB) that establishes the principles for determining the costs applicable to grants, contracts and other government agreements with educational institutions (also known as Sponsored Projects). OMB Circular A-21 defines allowable costs as those that are reasonable; allocable to the project; and given consistent treatment by use of generally accepted accounting principles. They must also conform to any limitations or exclusions set forth by the sponsor award terms.
  • Amendment: Any change made to an existing sponsored agreement.
  • Animal and/or human subjects’ approval: University approval obtained by a PI to conduct research that involves experiments on or treatment of animal or human subjects. If animals are involved, approval is obtained from the IACUC Committee. If humans are involved, approval is obtained from the IRB Committee.
  • Award amount: Total amount of funding that has been obligated by a funding agency for a particular project. This term is used for both original award and supplements; it can mean monies or equipment.
  • Award notification: Prepared by the Sponsored Projects Office, summarizes the essential terms of the grant or contract, including the period of performance, the amount of funding and method of payment, the F&A rate, and the dates on which any technical and financial reports are due.

B:

  • Broad agency announcement (BAA): An announcement that is general in nature and that identifies areas of research interest, including criteria for selecting proposals and soliciting the participation of all who are capable of satisfying the government’s needs.
  • Budget: The detailed statement outlining estimated project costs to support work under a grant or contract.
  • Budget period: The interval of time, usually 12 months, into which the project period is divided for budgetary and funding purposes.

C:

  • Classified research: Research sponsored by a federal entity that involves restrictions imposed, by agreement or otherwise, on the distribution or publication of the research findings or results for a specified period or for an indefinite duration following completion of the research. The University of California does not participate in classified research.
  • Clinical trial (CT)/clinical study (CS): A special category of activity that combines research with the testing of practical applications in biomedicine. Trials and studies are usually funded by commercial sponsors seeking approval of new pharmaceutical products or treatments.
  • Close-out: The completion of all work on a sponsored project, followed by the accounting of all costs and the filing of all required final reports; financial, technical, patents and inventions; and any other reports required by the sponsor.
  • Competing proposals: Proposals that are submitted for the first time or unfunded proposals that are resubmitted must compete for research funds. Ongoing projects must compete again (renewal) if the term of the original award has expired.
  • Consortium: A consortium includes two or more institutions working on the same research project. Each institution may be funded directly by the supporting agency or one prime institution may subaward funds to the other members of the consortium.
  • Continuation project (non-competing): Applicable to grants and cooperative agreements only. A project approved for multiple-year funding, although funds are typically committed only one year at a time. At the end of the initial budget period, progress on the project is assessed. If satisfactory, an award is made for the next budget period, subject to the availability of funds. Continuation projects do not compete with new project proposals and are not subjected to peer review beyond the initial project approval.
  • Contract: A contract is an agreement to acquire services that primarily benefit the sponsor. For an award to be considered a contract, it normally must contain: detailed financial and legal requirements and a specific statement of work to be performed; a specific set of deliverables and/or reports to the sponsor; separate accounting procedures; legally binding contract clauses. Benefits of the project accrue first to the sponsor, then to the university, then to the nation.
  • Cooperative agreement: An award similar to a grant, in which the sponsor's staff may be actively involved in proposal preparation. It anticipates that the sponsor will have substantial involvement in research activities once the award has been made.
  • Cost accounting standards (CAS): Federally mandated accounting standards intended to ensure uniformity in budgeting and spending funds.
  • Cost reimbursement (CR): A type of agreement whereby payments are based on actual allowable costs incurred in performance of the work.
  • Cost sharing: A general term, used as a noun or adjective, that can describe virtually any type of arrangement in which more than one party supports research, equipment acquisition, demonstration projects, programs or institutions. Example: A university receives a grant for a project estimated to have a total cost of $100,000. The sponsor agrees to pay 75 percent ($75,000) and the university agrees to pay 25 percent ($25,000). The $25,000 is the cost-sharing component.
  • Cost transfer: A cost transfer is a system that allows department administrators to correct objects and move or transfer payroll and non-payroll expenses from one account/fund to a different account/fund.

D:

  • Deficit: Also known as overdrafts. The condition where total expenditure and encumbrances exceed an appropriation.
  • Direct costs: Those costs that can be identified specifically with a particular sponsored project or the can be directly assigned relatively easily with a high degree of accuracy. General categories of direct costs include, but are not limited to, salaries and wages, fringe benefits, supplies, contractual services, travel and communication, equipment and computer use.

E:

  • Effort: The amount of time, usually expressed as a percentage of total effort (100 percent), that a faculty member or other employee spends on a project. Effort is certified and documented through the ERS.
  • Electronic research administration (ERA): Conducting research administration by utilizing electronic resources such as the Internet, form templates, databases and other electronic tools.
  • Encumbrance: Also known as a lien. A transaction that reflects the university’s legal obligation to pay for goods or services ordered through a formal purchase order or various maintenance, consultant, rental and lease agreements.
  • Expanded Authorities: Policy implemented by some federal granting agencies delegating certain prior approval authorities to grantee institutions. This delegation allows for internal university approval of administrative and spending actions, thus avoiding delays in project progress.

F:

  • Facilities and administrative costs (F&A or indirect costs): Actual costs incurred during the normal business activities of an organization that cannot be readily identified with or directly charged to a specific project or activity. This includes instruction and departmental research, library services, public service and other institutional activities. F&A costs are real, auditable costs incurred by the university each time it accepts an award for a sponsored project. If the university does not collect full reimbursement for these costs, other university resources must be used to subsidize them.
  • Federal Acquisition Regulations (FAR): Established to codify the uniform policies for the acquisition of supplies and services by executive agencies, normally applied to requests for proposal and federal contracts.
  • Federal Demonstration Partnership (FDP): A cooperative initiative among federal agencies and institutional recipients of federal funds. It was established to increase research productivity by streamlining the administrative process and minimizing the administrative burden on PIs while maintaining effective stewardship of federal funds. Under the FDP a researcher, as a recipient of federal grants, has management flexibility that includes 90-day pre-spending authority, institutionally approved no-cost extensions up to one additional year, and automatic carryover of unobligated funds from one budget period to the next.
  • Final report: The final technical or financial report required by the sponsor to complete a research project.
  • Firm Fixed Price (FFP): A type of agreement whereby payment is not based on actual cost expended but upon a mutually agreed upon price.
  • Fiscal year (FY): Any 12-month period for which annual accounts are kept (at UC Merced, July 1 through June 30).
  • Fund number: A five digit number, linked to an account number, indicating the source of funds. The fund, allocated for the purpose of meeting certain programmatic or contractual objectives, often has associated regulations, restrictions or limitations that require separate budgeting and accounting. A fund number is required to begin spending award monies.

G:

  • General purpose equipment: Equipment that is not limited to use for research, scientific or other technical activities. Examples of general purpose equipment include office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles and automatic data processing equipment.
  • Gift: A unilateral transfer of money, property or other assets to a recipient for the recipient’s ownership and use, by a donor who makes no claims on the recipient in connection with the gift. Gifts normally have the following characteristics: the circumstances of the gift allow the recipient significant freedom; no deliverables are involved; separate accounting procedures are not required; benefits of the project are to accrue to the nation and the world; and the donor receives no audit reports.
  • Grant: An agreement to transfer money, property, services or anything of value to accomplish a purpose, such as provide support or assistance in an area of interest to the grantor. A grant normally contains the following elements: the statement of work allows the project director significant freedom to change emphasis within the general area of work as the project progresses; deliverables are minimal, usually consisting of reports only; and separate accounting procedures are required.
  • Grantee: A grantee is the recipient of a grant. When the university accepts a grant award on behalf of an individual, it becomes the grantee.

I:

  • Inception to date: A time period reflecting information collected since the inception or start of an award.
  • Informed consent: The voluntary agreement obtained from a subject (or the subject’s legally authorized representative) agreeing to participate in research or related activity, before participating in that activity. The consent must permit the individual (or legally authorized representative) to exercise free power of choice without undue inducement or any element of deceit, fraud, force, duress or other form of coercion or constraint.
  • In-kind contribution: A non-cash commitment (such as contributed effort, facilities use or supplies) to share the costs of a sponsored project.
  • Institutional authorized officials: Individuals authorized by the University of California Regents to sign grants, contracts and agreements on behalf of the Regents.
  • Intellectual property (IP): Results of research conducted by the university that have potential value for practical applications or other uses by the public. Major examples of intellectual property are inventions, computer software, biological materials and original writings. When it is in the interest of the university or otherwise necessary, a patent or copyright is obtained to protect intellectual property rights.
  • Intercampus request for reimbursement: Invoice sent by Contracts & Grants Accounting to another UC campus for reimbursement on a subaward or multi-campus agreement. Payment is received via funds transfer.
  • Invoicing: For some extramural awards, the sponsor initiates payment only after receiving an invoice. Invoices are prepared based on general ledger expenses and are submitted to sponsors and payments of invoices are recorded in the general ledger.

K:

  • Key personnel: The personnel considered to be of primary importance to the successful conduct of a research project. The term usually applies to the senior members of the project staff.

M:

  • Material transfer agreement (MTA): A written agreement entered into by a provider and a recipient of research material in order to protect intellectual and other property rights of the provider while permitting research with the material to proceed.
  • Memo liens: Unofficial commitments based on spending requests that have not yet been approved or encumbered.
  • Modification: Any change made to an existing sponsored agreement.
  • Modified total direct cost (MTDC): The basis upon which federally negotiated F&A rates are applied. MTDC is derived by excluding certain costs from the direct cost total. Exclusions include equipment, patient care, alterations and renovations, space rental, tuition remission, subawards to other UC campuses, and, in all other subawards, any amount beyond the first $25,000.

N:

  • No-cost extension (NCE): Provides for an additional period of performance to accomplish project goals but does not include additional funding. Requests may be handled internally by the SPO in certain circumstances, or sought externally from the sponsor.
  • Non-payroll cost transfers: Also known as non-PEAR. Non-payroll expenditure adjustment requests. They provide a chance to adjust financial transactions on the general ledgers. The adjustment requests must conform to UC policy, be fully explained, justified and approved.

O:

  • Office of Management and Budget (OMB): Largest component of the Executive Office of the President. Among other responsibilities, the OMB oversees the financial management of federal grant programs and is the publisher of the circulars that define how federal grant money is to be used.

P:

  • PASS Form: A unique UC Merced term that refers to the Proposal Approval and Submission Sheet that must be completed and signed by a principal investigator, the school dean or the ORU director before a proposal can be submitted to the SPO for review and submission to a sponsor.
  • Principal investigator (PI): Typically, a faculty member who submitted a proposal that was funded by an external sponsor. The PI has primary responsibility for technical compliance, completion of programmatic work and fiscal stewardship of sponsor funds.
  • Co-PI: Investigators sharing equal responsibility for the direction of a research program.
  • Prior approval: Approval that must be obtained before using project funds for purposes not in the approved budget, or changing aspects of the program from those originally planned and approved. 
  • Program announcement: Describes the existence of a research opportunity. It may describe new or expanded interest in a particular extramural program or be a reminder of a continuing interest in an extramural program.
  • Program Income: Gross income earned by a research grant recipient from the activities of the grant, support for which was borne as a direct cost by the grant. Examples are fees for services performed under the grant, rental or usage fees charged for use of equipment purchased with grant funds, third party patient reimbursements for hospital or medical services paid from the grant, funds generated by the sale of commodities, such as cell lines or research animals developed for or paid for from the grant, and patent or copyright royalties.
  • Program/project officer: A sponsor's designated official responsible for the technical, scientific or programmatic aspects of a particular grant, cooperative agreement or contract. Serving as the counterpart to the PI/project director of the grantee/contractor organization, the program/project officer deals with the grantee/contractor organization staff to assure programmatic progress.
  • Progress report: Periodic, scheduled reports required by a sponsor summarizing research progress to date. Technical, fiscal and invention reports may be required.
  • Project period (PP): The total time for which support of a project has been programmatically approved. A project period may consist of one or more budget periods.
  • Proposal: A set of documents containing a descriptive narrative of an idea and a budget to be submitted to a funding agency for sponsored support. Some agencies require that proposals be submitted on preprinted forms, while others have no specific format.

R:

  • Re-budgeting: Process by which funds available for spending are reallocated between budget categories to allow best use of funds to accomplish project goals.
  • Request for applications (RFA): Announcements indicating the availability of funds for research of specific interest to a sponsor. Proposals submitted in response to RFAs generally result in grant awards. Specific grant announcements may be published in the Federal Register and/or specific sponsor publications. RFA instructions include the information necessary to complete the application and mailing instructions.
  • Request for proposal (RFP): Announcements that specify a topic of research, methods to be used, product to be delivered and appropriate applicants sought. Proposals submitted in response to RFPs generally result in contract awards. Notices of federal RFPs are published in the Commerce Business Daily.
  • Revision: A modified and resubmitted request for funding for a project that was previously not funded because it was denied by the sponsor or withdrawn by the PI.

S:

  • Scope of Work: Sets forth the requirements for the performance of work to achieve defined project objectives. It describes tasks, directs methodologies to be used and sets forth the period of performance.
  • Special purpose equipment: Equipment that can be used only for research or other technical activities.
  • Sponsor: An external funding agency that enters into an agreement with the university to support research, instruction, public service or other sponsored activities. Sponsors include private businesses, corporations, foundations and other nonprofit organizations, other universities, and federal, state and local governments.
  • Sponsored research: (also known as extramural support/funding). Funding for research, training or public service programs provided by federal or private sources outside the university, usually requiring formal acceptance of terms and conditions by the university related to the performance of the research.
  • Sub and object codes: Two-digit sub codes are general cost categories such as salaries (sub 00, 01, 02), supplies (sub 03), equipment (sub 04), overhead (sub 9H), etc... Four-digit object codes are further breakdowns of sub codes. Examples are 1XXX - salaries and wages; 2XXX - travel costs; 3XXX-transportation of things; etc... Allowability of expenditure on extramural funds is monitored by analyzing these cost categories.
  • Subaward, subcontract, subgrant or subagreement: A document written under the authority of, and consistent with, the terms and conditions of an award (a grant, contract or cooperative agreement), that transfers a portion of research or substantive effort of the prime award to another institution or organization.
  • Supplemental (rebudgeting or modification) proposal: A request to a sponsor for additional funds for an ongoing project during an already approved performance period. A supplemental proposal may result from increased costs, modifications in design or a desire to add a closely related component to the ongoing project.

T:

  • Terms of Award: All legal requirements imposed on a recipient by a sponsor, whether by statute, regulation(s) or terms in the award document. The terms of an agreement may include both standard and special provisions that are considered necessary to protect the sponsor's interests.
  • Transfer of funds (TOF): Transfers of funds are initiated to establish budgetary appropriations and adjust budgetary appropriations.
  • Total direct cost (TDC): The total of all direct costs of a project.

U:

  • Unobligated or unexpended balance: Unspent fund balance.
  • Unrestricted funds: Monies with no requirements or restrictions as to use or disposition. Grants, contracts and cooperative agreements are considered to be restricted funds, while gifts are considered unrestricted funds.
  • Unsolicited proposal: Proposals submitted to sponsors that are not in response to RFPs, RFAs or program announcements.