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Title: NSF 97-100 -- Prospective New Awardee Guide
Date: May 30, 1997
Prospective New Awardee Guide
NSF 97-100
NATIONAL SCIENCE FOUNDATION
Arlington, Virginia 22230
May 1997
Table of Contents
Section A - Overview and Basic Information
1. Overview
2. Federal Requirements
3. NSF Points of Contact
Section B - Administrative and Management Information
1. Awardee Organization and Management Summary Form
2. Organizational Establishment and Structure
3. Assurance of Compliance
4. Small Business Declaration or IRS Exemption Letter
5. Listing of Current or Recent Federal Awards
Section C - Accounting System Requirements and Auditing Information
1. Accounting Systems Information
2. Time and Effort Reporting
3. Indirect Cost Rate Information and Financial Statements
4. Costs Unallowable on Federal Awards
5. Information on Audits Conducted on Federal Awards
Section D - Payments to Organizations with Awards
1. Payments
2. ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881)
3. Request for Advance or Reimbursement
4. Interest Earned on Advance Payments
Appendix 1 - Awardee Organization and Management Summary Form (NSF 357)
Appendix 2 - Assurance of Compliance (F.L. 123)
Appendix 3 - Small Business Declaration Form
Appendix 4 - Information Concerning Financial Management Systems Form
Appendix 5 - ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881)
Section A - Overview and Basic Information
1. Overview - The information provided in this guide will assist your
organization in preparing documents which the National Science Foundation
(NSF) requires to conduct administrative and financial reviews of your
organization. This guide also serves as a means of highlighting the
accountability requirements associated with Federal awards. You should read
this guide in its entirety since it contains information which we have
identified, based on past experience with prospective grantees, as being most
helpful to them in working with the NSF.
2. Federal Requirements - Various Federal requirements apply to awards made by
NSF. These requirements are set forth in the following documents: (1) Federal
Cost Principles; (2) Federal Management Standards; and, (3) Federal Audit
Requirements. If your organization does not currently have a copy of the
documents setting forth the requirements which are applicable to your
organization, they should be obtained as soon as possible.
Type of Organization & Applicable Federal Cost Principles
* Profit Organizations
Federal Acquisition Regulations (FAR), Part 31 OMB Circular A-110
Cognizant Federal agency responsible
* Educational
OMB Circular A-21
OMB Circular A-110
OMB A-133
* Non-Profit
OMB Circular A-122
OMB Circular A-110
OMB A-133
* State/Local Government
OMB Circular A-87
OMB A-128
These documents can be obtained as follows:
NSF Guides
Internet Address: http://www.nsf.gov/home/grants3.htm
OMB Circulars
Phone Contact: Office of Management and Budget (202) 395-7332
Internet Address: http://www.whitehouse.gov/WH/EOP/OMB/html/circular.html
FAR, Part 31
Phone Contact: Government Printing Office (202) 783-3238 Internet Address:
http://www.gsa.gov/far/90-37/html/31.html
3. NSF Points of Contact - We recommend that you read the entire guide before
calling for assistance. Many of the answers to questions organizations have
are contained in this document.
Division of Grants and Agreements (DGA)
Staff in this office are responsible for award of grants and grant
administration. This office should be contacted with questions in those areas
which are not identified in the offices noted below. See cover letter for
name and phone number for contact.
Cost Analysis and Audit Resolution Branch (CAARB) (703) 306-1244 Staff in
this office are responsible for conducting accounting system reviews,
negotiating indirect cost rates, and resolving audit findings. This office
should be contacted with questions concerning accounting systems requirements,
indirect cost rates and indirect cost proposal preparation, financial
statements, and audits conducted on Federal awards.
Division of Financial Management (DFM) (703) 306-1283 Staff in this office
are responsible for payments and processing of Federal Cash Transaction
Reports (FCTRs). This office should be contacted with questions concerning
payment forms, advances or reimbursements, and the FCTR if an award is made
(see GPM 450).
Section B - Administrative and Management Information
1. Awardee Organization and Management Summary Form 357 (Appendix 1) - Self
explanatory. Complete Part I only.
2. Organizational Establishment and Structure - Provide an official or
published statement of the purpose of your organization and of the powers
which have been granted to it to enter into contractual relationships and/or
accept awards (e.g. articles of incorporation, by-laws). This should include
a brief resume of your organization, and also an organization chart reflecting
the structure of your organization.
3. Assurance of Compliance (Appendix 2) - Enter the name of your organization
and sign the form certifying that your organization is in compliance.
4. Small Business Declaration or IRS exemption letter (Appendix 3) - If you
are a for-profit organization, provide a signed copy of the Small Business
Declaration form.
If you are a non-profit organization, provide a copy of the current Internal
Revenue Service tax exemption letter which certifies the organization's
non-profit status.
5. Listing of current or recent federal awards - Provide a listing of federal
awards to your organization in the past two years. Show agency, amount, and
title of project.
Section C - Accounting System Requirements and Auditing Information
1. Accounting Systems Information - Organizations receiving awards are
required to have an adequate accounting system. Adequate accounting systems
provide assurances to the Federal Government that organizations can account
for expenditure of federal funds in accordance with applicable regulations,
and terms and conditions of the award.
At a minimum, adequate accounting systems provide for:
* identification of costs (budgeted costs and actual expenses) by
project/grant;
* identification of costs as direct, indirect, and unallowable;
* complete and accurate financial reports (including balance
sheets and income statements); and
* maintenance of adequate source documentation (purchase orders, invoices,
canceled checks, etc.).
Organizations being considered for an NSF award are required to support the
existence of an adequate accounting system. If an organization has been
audited by Defense Contract Audit Agency (DCAA), or has been audited by
another Federal Agency, the organization should provide a copy of the review
and/or audit report resulting from the audit or review.
All organizations should complete and provide the "Information Concerning
Financial Management Systems" form, (Appendix 5). This form will be reviewed
by the Cost Analysis and Audit Resolution Branch. Possible accounting system
deficiencies in your submission, and suggestions for correcting deficiencies,
will be discussed with the submitting organization.
2. Time and Effort Reporting - Time and effort records must be maintained for
an organization's employees so that salary charges to an award can be
verified. An adequate time and effort record contains the following
information: (1) the name and signature of the employee; (2) the hours an
employee worked each day during a given pay period; (3) the activities of the
employee during the pay period (i.e., project, general and administrative,
vacation, sick, leave without pay, etc.); and, (4) the name and signature of
the employee's supervisor.
Corrections to a time and effort record should be in ink and initialed by the
employee.
Organizations should provide a copy of their time and effort record as an
attachment to the "Information Concerning Financial Management System" form.
The following sample timesheet is provided to assist you in creating a time
and effort record form should your organization not currently maintain these
records.
(Sample timecard may be obtained from the Cost Analysis & Audit Resolution
Branch (703) 306-1244. It is not available in text version.)
3. Indirect Cost Rate Information and Financial Statements - An indirect cost
is any cost not readily identified with a particular individual project, but
identified with two or more projects (e.g. rent, utilities, accounting fees,
etc.) Indirect costs cannot be charged directly to one specific project, but
must be allocated in an equitable distribution of indirect costs to direct
projects by application of an indirect cost rate to direct costs.
Organizations are required to support their indirect cost rate(s) shown on
their grant proposal budget by submission of a current indirect cost rate
agreement negotiated with a Federal agency (with financial statements for the
two most current ended accounting periods), or by submission of an indirect
cost proposal and the related financial statements.
A sample indirect is not available in the text version of this document. It
may be obtained from the Cost Analysis and Audit Resolution Branch. (703)
306-1244.
Based on various information available, e.g., historical cost information, and
the amount of funding being requested, the Cost Analysis and Audit Resolution
Branch will make a recommendation on the funding of indirect costs - either
as an amount, or as a rate. Since indirect cost recoveries can be limited
on NSF awards, and could require post-award repayments to NSF, organizations
receiving awards should ensure that they understand the award conditions
relating to indirect cost recoveries. These will be specified in the award
letter. Conditions which could be included are as follows:
Maximum provisional rate: A maximum provisional rate is a temporary rate
established for an award to permit funding and reimbursement of indirect costs
pending establishment of a final rate (that rate determined at the end of an
accounting period using "actual" direct and indirect cost data). This type of
rate limits indirect cost recoveries to the LOWER of the maximum provisional
rate established at the time of award, or the final rate, established at the
end of an accounting period.
As an example, if a maximum provisional indirect cost rate of 50% was
established at the time of award, but an indirect cost rate of 65% was
determined based on actual financial data for an accounting period, indirect
cost recoveries would be limited to 50%. However, if a final indirect cost
rate of 40% was determined, indirect costs recovered in excess of the 40% rate
would need to be removed as charges to the project.
Organizations having awards which contain maximum provisional rates are
required to submit indirect cost proposals reconciled to financial statements
for those periods during which the award is active. The Cost Analysis and
Audit Resolution Branch of NSF will review indirect cost proposals and
determine the appropriate final indirect cost rate.
Predetermined fixed rate: A predetermined fixed indirect cost rate is a
permanent indirect rate established for a discrete period of time, usually an
organization's fiscal year. Organizations should charge NSF awards at the
predetermined fixed rate(s) stipulated in the award document(s). However, if
negotiations between the organization and NSF (or the cognizant federal
agency, if not NSF) result in changes to the organization's indirect cost rate
which are not reflected in an award, the organization may charge the award at
the newly negotiated rate in effect when direct cost expenditures are made,
subject to the restrictions in GPM 635.1.
Fixed dollar amount: A fixed dollar amount limits organizations to that
"amount" of indirect costs specified in the approved budget. It is not
subject to adjustment.
4. Costs Unallowable on Federal Awards - Certain kinds of costs organizations
incur cannot be charged to Federal awards, either as direct or indirect costs.
A few examples of these costs are: advertising (except for help wanted), bad
debt, contributions and donations, fines, penalties, and independent research
and development (IR&D) costs. The applicable cost principles which give more
details on allowable costs and unallowables are listed in Section A above.
5. Information on Audits conducted on Federal awards - Information on audit
requirements are contained in the GPM 350. In addition to those audits
discussed in GPM 350, the NSF Office of the Inspector General (OIG) conducts
audits of awards made to for-profit and non-profit organizations receiving
Federal funding. Since these audits can result in cost disallowances and
require organizations to make repayments to NSF, organizations should
understand the importance of having adequate accounting documentation to
support that costs charged to NSF awards are actually incurred, reasonable
and/or allowable under the applicable cost principles and/or terms and
conditions of the award.
Audit findings resulting in questioned costs (and, which can require repayment
to NSF) have been due to the following:
1. Lack of time records to support salary costs charged to awards.
2. Lack of documentation (invoices, canceled checks, etc.) to support and to
determine other direct costs (materials, consultants, equipment) charged to
awards.
3. Indirect cost recoveries were in excess of those allowed by the type of
awarded indirect cost rate.
4. Certain costs, i.e., participant support cost requiring NSF approval, were
not approved in NSF budget, or in post-award period.
5. Interest earned on NSF advances made to organizations was not remitted as
required (see Section D below.)
6. Cost sharing was a condition of the award, but cannot be supported by
accounting documentation.
Resolution of questioned cost audit findings is timely and costly for both the
organization and NSF. Therefore, you should contact the NSF Cost Analysis
and Audit Resolution Branch (CAARB) at (703-306-1244) if you have any
questions concerning audits, and/or supporting documentation to be maintained.
Section D - Payments to Organizations with Awards
1. Payments - Information concerning payments can be found in GPM 430.
Organizations should become familiar with NSF policies concerning payments to
ensure timely receipt of payments, and also timely submission of required
financial reports.
2. ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881) - See GPM 436
information and instructions on completing this form. This form should be
sent to NSF, Division of Financial Management, Room 575 as soon as possible
after an NSF grant award letter is received by an organization.
3. Request for Advance or Reimbursement - See GPM 432-435 for information
regarding NSF's payment requirements. Also see GPM 436, Section C on how to
request payments.
4. Interest Earned on Advance Payments - Organizations are generally required
to maintain advances of NSF funds in interest bearing accounts and to remit
interest earned in excess of $250 per year to the Department of Human Health
and Services (HHS). Specific requirements concerning deposits and interest
are contained in GPM 443.
Appendices-are not available here. They may be accessed from the Division of
Contracts, Policy and Oversight, Cost Analysis and Audit Resolution Branch
(703)306-1244.