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Guidelines for Expenditure Approval & Monitoring 

Purpose

This policy outlines the standards for the allowability of a charge to a grant and the roles of those individuals, who initiate, review and approve, and monitor expenditures to ensure compliance with federal and state requirements, sponsor terms, and University policy.

Applicability

Principal Investigators (PIs), Financial Officers and Research/Departmental Administrators, Grants and Contracts Accounting Analysts and/or any other administrators managing sponsored projects.

Background

Sponsored project expenditures must be incurred in accordance with standards set forth in the terms and conditions of the award along with the policies and procedures of the sponsor. UNT applies the cost principles and standards set forth in Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200 to our federal awards. The intent is to spend our funds in a manner that is acceptable to the federal government or any other sponsor, to ensure compliance and prevent cost disallowances, penalties, and/or fines.

Sponsored projects administration is a joint effort between the Principal Investigator (PI) and the University. The PI is responsible and accountable for the management and administration of their award within the constraints imposed by the sponsor and in accordance with UNT and UNT System policy. Along with the PI, the University is legally and financially responsible and accountable to the sponsor for the performance and proper use of funds for the award, and relies on the oversight of the PI in fulfilling its stewardship role.

All costs charged to a sponsored project must be in conformance with the award terms and conditions of the sponsored project, the Uniform Guidance in the case of federal sponsored projects, federal and state law, and University policy.
 

I. Federal Regulations: The Uniform Guidance

Per Uniform Guidance (§200.403), in order for a direct cost to be an allowable cost on a sponsored project, the cost must:

a. Be necessary and reasonable for the performance of the federal award and be allocable under these principles;
b. Conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items;
c. Be consistent with policies and procedures that apply uniformly to both federal and non-federal activities of the University;
d. Be accorded consistent treatment. (A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost);
e. Be determined in accordance with generally accepted accounting principles (GAAP);
f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period;
g. Be adequately documented.

Subpart E of the Uniform Guidance provides general provisions for selected items of costs. In accordance with this part, the following costs are unallowable:

  1. Meetings, conventions, convocations, or other events related to other activities of the University;
  2. Alcoholic beverages;
  3. Alumni/ae activities;
  4. Bad debts;
  5. Costs of contributions and donations, including cash property and services, from the University to other entities;
  6. Costs of goods or services for personal use;
  7. Costs related to securing patents and copyrights where the costs to prepare disclosures, reports, and searching the art are not required by the federal award or where the federal award does not require conveying title or a royalty-free license to the federal government in the case of filing and prosecuting any foreign patent application;
  8. Costs incurred for interest on borrowed capital, temporary use of the endowment funds, or the use of the University’s own funds;
  9. Lobbying to influence activities associated with obtaining grants, contracts, cooperative agreements or loans, and executive lobbying costs;
  10. Losses on other awards or contracts;
  11. Membership costs in any country club or social or dining club or organization and membership costs in organizations whose primary purpose is lobbying
  12. Selected relocation costs such as loss on the sale of a former home and continuing mortgage principal and interest payments on a home being sold;
  13. Student activity costs;
  14. Travel costs for dependents when the duration is less than six months, (please see UNT policy relating to dependents)
  15. In addition to the list above, the federal sponsor may not allow other costs in accordance with sponsor policy and the terms of the award.

II. Direct Cost Expenditure

Principle Investigators have the responsibility to verify that charges on their awards are allowable. Investigators may receive assistance on financial tasks from the Financial Officer (FO)or Research/Departmental or College level at the University of North Texas, and Grants and Contracts Administration (GCA). However, the PI retains the responsibility for the review and approval of charges on their sponsored project(s). PIs review and approval of expenditures is to assure that:

  1. for federal awards, direct costs meet the standard for an allowable cost set forth in the Uniform Guidance;
  2. direct costs meet the specific terms of the project and are reasonable, allocable, and allowable;
  3. expenditures occur within the project period;
  4. expenditures are appropriately documented;
  5. expenditures meet the limitations of the sponsor-approved budget.

III. Roles and Responsibilities

Principal Investigator (PI):
These actions may also be performed by a Project Director Co-investigator, on the project or technical designee.

  1. Apply the factors of allowability (in accordance with the Uniform Guidance for federal awards) regarding a cost prior to requesting, incurring, or processing an expenditure. Provide and/or maintain documentation of the appropriateness of the expense in conjunction with the project.
  2. Provide the financial officer or research/department administrator documentation or maintain documentation relating to the expenses of the project.
  3. Authorize requests for personnel and procurement, resulting in expenditures including personnel, equipment, supplies, service agreements, consultants, subawards and other costs.
  4. Ensure expenditures occur within the project period;
  5. Monitor and approve payments for consultant services and subawards (PI approval);
  6. Monitor project expenditures to confirm they are allowable, allocable, and reasonable and promptly request the FO/RA/DA make corrections upon identifying a charge that needs to be removed (e.g. an unallowable cost) from the project to a non sponsored project; usually a designated fund.
  7. Approve all cost transfers;
  8. Monitor budgets and submit, or have the research/department administrator submit, budget revisions to Grants and Contracts Administration (GCA) Post Award;
  9. Obtain prior approval through GCA when required by the sponsor’s terms and conditions before funds are committed or expended on the sponsored project (PI approval).

Financial Officer (FO)/Department/Research Administrator (RA/DA):

  1. Apply the factors of allowability (in accordance with Uniform Guidance for federal awards) prior to approving an expenditure;
  2. Ensure PI or their designee provides adequate justification/documentation of the expense on the project;
  3. Review reports of expenditures charged to each sponsored project to ensure expenditures are allowable and review any reconciling items or budget overruns with PI and aid in the submission of cost transfers and/or rebudget requests;
  4. Alert the PI and/or GCA to issues and concerns.

Grants and Contracts Administration (GCA):

  1. Apply the factors of allowability (in accordance with Uniform Guidance for federal awards) prior to approving an expenditure;
  2. Review and approve purchase requisitions as required in the University’s financial system and subawards;
  3. Review and approve cost transfer requests;
  4. Process non-payroll and certain payroll cost transfers in the University’s financial system;
  5. Facilitate, review, and approve sponsor prior approval requests;
  6. Review and approve rebudget requests;
  7. Process budget revisions in the University’s financial system;
  8. Monitor grant expenditures and review all expenditures prior to financial closeout and ensure all unallowable expenses are removed.

Accounts Payable/Payroll/Procurement

  1. Ensure expenditures are in compliance with UNT System’s requirements.

III. Expenditure Review

Transaction review and budget monitoring are essential components of an integrated system of control activities. Along with preventative controls, after the fact financial reviews provide reasonable assurance, but not absolute assurance, that financial activity is accurate, valid, and complete.

  1. The PI will make a timely review of project expenditures and remaining balances;
  2. The PI and FO/RA/DA will review reports of expenditures charged to each sponsored project to ensure allowability and to take prompt corrective action when costs are determined to be unallowable. The PI and FO/RA/DA will monitor the budget and submit rebudget requests when necessary which are approved by GCA.

IV. Prior Approval for Certain Expenditures

Sponsor prior approval is often required for certain direct cost expenditures. The Uniform Guidance, sponsor grant policy, and the award terms and conditions include these requirements. For non-federal sponsors, if the award does not include specific requirements, Principal Investigators should follow the guidance for federal grants and cooperative agreements unless otherwise approved by the sponsor and the University. For federally funded awards, and in accordance with the Uniform Guidance (200.407), prior written approval from the sponsor is required before the expense can be incurred. Common examples of these types of costs that require agency prior approval include the addition of a subaward that was not approved in the original submission or purchase of equipment that was not included in the proposal and administrative expenses.

Policy Guideline Created: August 15, 2024
Questions? Contact Grants and Contracts Administration or 940.565.3940
Read the full policy: UNT Policy Guidelines for Expenditure Approval & Monitoring