- What's a Grant ? A contract?
- What is the Pre-Award process for grant or contract?
- What are some administrative facts I might need for my grant proposal?
- What are the steps in the grant /contract lifecycle?
- What happens at the end of the grant /contract?
- How should we process checks for the grants /contracts?
- Are procedures for Research centers the same as for grants and contracts?
- Allowability of grant costs
- Fees Prohibited from Grants
- Cash balance at the end of grant /contract
- Overexpenditure of grant /contract
- Who owns equipment purchased with Federal and State funds?
A grant is a special type of procurement. In procurement, the sponsor gives NJIT something of value with the expectation of getting something from NJIT in return. This is in contrast to a gift, where the sponsor expects nothing in return. Other types of procurement, distinct from grants, are contracts cooperative agreements and other transactions, for example.
In a grant, the sponsor is buying research effort but there is no guarantee of specific outcomes (except perhaps progress reports). Government grants are a public policy tool "to carry out a public purpose of support or stimulation authorized by law" (P.L. 97-258) "instead of acquiring...for the direct benefit and use of the United States Government".
In a contract, there are specific deliverables, and there is the presumption that NJIT is undertaking the work solely because of the contract.
In a grant, "substantial involvement is not expected between the executive agency and the...recipient when carrying out the activity in the agreement." If sponsor involvement is expected in carrying out grant-like activity,the procurement would be a Cooperative Agreement rather than a grant. Other transactions used widely for Homeland Security R&D, are exempt from many provisions at Federal Acquisition Regulations and from Bayh-Dole protections for intellectual property.
If you think you might be getting a grant or contract, the agreement must be formalized in writing ,processed and approved through the Office of Sponsored Programs. Gifts are processed through the Office of University Advancement. All grant or contract agreements must be arranged through the Office of Sponsored Programs prior to post-award processing by Grant and Contract Services.
During preliminary discussions with a potential contract partner or donor, no commitments should be made without approval from the NJIT Office of Sponsored Programs. When framing the concept of a potential contract, keep in mind the following issues: deliverables, deliverable due dates, sharing of risks for deliverable performance, budgets (including indirect costs and fringe benefits), intellectual property rights, confidentiality, termination clauses and special risks. In terms of these issues the ideal contract from NJIT's point of view involves
- Sharing of risk related to performance of deliverables, and invoices no more often than quarterly
- Clear description of sponsor and NJIT commitments, including deliverables and due dates for deliverables
- Indemnification from risk for subsequent use of the deliverable by the sponsor
- Full payment of NJIT's contract costs including fringe-benefit and overhead costs
- No cost sharing
- Intellectual property rights reserved to NJIT
- Ability to publish scholarly works based upon contract performance
- Ability to terminate without penalty to NJIT, e.g., if the PI becomes unavailable.
- And sponsor assumption of special risks such as injury to personnel (especially when work is performed off the NJIT site), damage to equipment, or environmental damage.
NJIT employees pursuing an industrial contract should contact the Office of Sponsored Programs, who will coordinate processing with the office of Legal & Employment affairs and the Office of Intellectual Property.
NJIT’s Facilities and Administrative (F&A) rate and fringes benefits for Fiscal Year 2014 through 2017 are as follows:
|Fiscal Year||F&A Rate (as % of Modified Total Direct Cost (MTDC))
Research on Campus
|F&A Rate (as % of MTDC)
|Fiscal Year||Fringe Benefit Rates||Rates|
|Part-time Summer Faculty||7.60%|
|Part-time Non Summer Faculty||8.50%|
|Part-time Non Summer Faculty||8.90%|
There are no fringe benefit rates for students and faculty summer pay. NJIT’s equipment capitalization threshold is $5,000 since July 1, 2013.
The NJIT Dun and Bradstreet number (DUNS#) is 07-516-2990.
The tax ID number for NJIT is 22-6000910.
NJIT'S NAICS Code is 611310.
The NJIT Standard Industrial Classification (SIC) is 8221.
The Commercial and Government Entity (CAGE) number is 4B854 for NJIT. This is the number to use for grants and contracts.
In general, an NJIT grant or contract process has the following steps:
- PI works-out proposal /budget /match with Office of Sponsored Programs (OSP).
- PI gets NJIT approvals on proposal /budget /match.
- OSP sends to proposal to sponsor (e.g., via FASTLANE to NSF).
- Sponsor sends notice of award to OSP.
- OSP sends notice of award, budget interpreted in NJIT object codes, and "Request to Add/Modify Cost Center Attributes" to Grant and Contract Services (GCS).
- PI works with OSP on subaward agreement(s), consulting agreement(s).
- PI gets NJIT approvals on subaward or consulting agreement(s).
- GCS sets up account in FRS, in conjunction with General Accounting.
- GCS budgets funds, in conjunction with Budget Department, according to NJIT-approved budget plan developed by the PI and OSP.
- GCS sends award letter to PI(s), with acct number, noting special terms, time frame and deliverables.
- PI sends agreement(s) for ratification by subawardee or consultant.
- PI works on project and manages the funds in the FRS, to comply with the terms of the award. PI also manages and maintains records of the expenditure of NJIT matching funds.
- PI works with OSP to obtain prior written approval from the sponsor for significant deviations from the approved budget, if necessary.
- GCS periodically invoices the sponsor for the expenses accumulated in the FRS account, and issues required financial reports to sponsor.
- PI provides sponsor with required interim deliverables, with copies to OSP and GCS.
- Sponsor reimburses NJIT for allowable, reasonable expenses allocable to the award.
- PI works with OSP to request no-cost extension of grant end-date from the sponsor, if necessary.
- 90 days prior to award end date, GCS notifies PI of closeout requirements.
- PI stops spending on or before the end-date of the grant, having expended all but no more than is budgeted in FRS.
- PI also provides the sponsor with required final deliverables, after appropriate NJIT review.
- FRS account is frozen.
- GCS issues final invoice, and financial reports.
- Sponsor makes final payment.
- FRS account is closed out.
The following administrative action happens at the end of a grant:
- Grant and Contract Services notifies the Principal Investigator by email about 90 days before the end of a grant.
- The PI may initiate, through the Office of Sponsored Programs (x2457), a request to the sponsor for a no-cost extension at least 30 days before the grant end date. A longer time may be needed to request extensions from sponsors when NJIT is a subawardee or a subcontractor.
- The PI should initiate personnel actions to continue students and other employees by transitioning them to other accounts, or by terminating employment if there are no alternatives. Consult with Human Resources Department about required lead times for NJIT employee personnel actions.
- Non Personnel purchases on the grant account should stop before the end date of the grant. The guide to how long before the end of a grant new purchases should stop is whether the purchase will benefit the grant purpose before the end of the grant. For example, equipment purchased less than 90 days before the end of the grant is questionable. Purchases to replenish stocks, or to replace equipment or supplies used during the grant are not allowable. New blanket orders for supplies are not allowable at the end of a grant. Travel and other purchases to disseminate the grant research results are acceptable just before the grant end date.
- Purchases for use after the grant end date are not allowable unless there is explicit written permission from the sponsor indicating that the sponsor for those purchase expenses will reimburse NJIT.
- The PI is responsible for end-of-grant deliverables, including the final technical report.
- The PI is responsible to contact the Director, Intellectual Property regarding any patentable or copyrightable items resulting from the grant.
- The PI is responsible to verify that all internal charges (e.g., bookstore, food service, computer store, and printing) are posted to their account within 30 days of the end of the grant. Provide GCS with documentation of any exceptions.
- The PI is responsible to clear grant encumbrances in a timely manner (i.e., within 60 days of the end of the grant), so that encumbered expenses can be included in the final grant invoice. This may involve coordination with vendors, Purchasing Department, Grant and Contract Services and Accounts Payable.
- GCS will freeze the grant account 60 days after the grant end date. No new changes can be posted to the account after that.
- Grant and Contract Services will provide the sponsor with a final invoice and financial report. GCS will request the PI to delete outstanding encumbrances. The University's goal is to send final invoices within 90 days after the grant end date, pending PI clearance of encumbrances. Cost transfers are not allowed after the final invoice is submitted to the sponsor.
- Grant and Contract Services will credit the grant receivable when the sponsor pays the final invoice.
- The grant account file at GCS, and the FRS account for the grant, will be maintained and then closed-out three years after the final payment, to provide a basis for audit. Records of accounts under investigation or continuing audit will be maintained in GCS and FRS while the matter is pending.
For Grant extensions : Office of Sponsored Programs, x 3428.
Personnel : Human Resources Department, x 3140.
Intellectual Property: Office of Intellectual Property, x 5825.
Grant Administration: Grant and Contract Accounting x 3145.
Checks should be sent to the following address for most-rapid processing:
New Jersey Institute of Technology
PO Box 18110
Newark, NJ 07191-8110
Checks should arrive annotated with the six-digit NJIT account number to which they should be credited. Also desirable is an accompanying invoice or other document that provides context for the payment.
Checks or purchase orders presented without prior involvement of the Office of Sponsored Programs may entail unusual delays. The Office of Sponsored Programs should be involved early in the proposal and award process. When you receive your award, the Office of Sponsored Programs will forward your budget and a request for set-up of a new account to the Office of Grant and Contract Services. At that point, NJIT is ready to invoice the sponsor for expenses, or to process checks and purchase orders.
Basically, yes .When a Research Center obtains a new member, the office of Sponsored Program (or the Associate Provost for R&D rather than OSP) should be contacted so it can coordinate review by the office of Legal & Employment Affairs and the office of Intellectual Property .Once Processed ,OSP (or A/P for R&D) will forward the request to the office of Grant and Contract Accounting (or Accounting) to set up an account (or post to an existing one ).
Grant budget as the governing authority on allowable costs:
The budget approved by the funding agency will identify approved costs. For example, if a cost object for foreign travel (i.e., 5110) doesn't appear on your budget (reflected on the 19 screen in FRS) then your sponsor hasn't allowed foreign travel.
Regulations also determine what costs are allowable:
Some expenses are universally disallowed. These universal disallowals are explained in federal Office of Management and Budget Circular A-21, Section J. A-21, which is available for review at GCS, or on the OMB web site. Unallowable expenses include alcoholic beverages, most kinds of advertisement, entertainment, alumni activities, commencement and convocation costs, executive lobbying costs, fines and penalties, travel on a foreign-flag airline and goods and services for personal use. Guidelines for allowability on State grants are similar.
Cost principles affect allowability:
There are general principles of cost allowability, if you don't find your specific item of interest in the grant budget or in A-21. If the cost is unreasonable, even though the expense is allowable, then reimbursement will not be allowed. For example, a meal might be an allowable expense, unless the cost is unreasonable. Another general principle for allowability is that the expense should be clearly related to the purpose of the grant. For instance, a meal to entertain visitors is not allowable whereas a meal with co-PIs to plan the grant work might be allowable. Finally, allowability as a direct cost of a grant requires that (in the same circumstances and for the same purpose) elsewhere on the NJIT campus, the same expense has not been charged as an indirect cost.
Facilities and Administrative costs are not allowable as a direct charge to your grant:
Examples of indirect costs (aka F&A costs) not allowable as direct charges to grants follow. Textbooks (also bought by the library as an indirect cost, A-21, F.8.a.) are unallowable. Personal memberships in business, technical or professional organizations are unallowable direct charges to your grant, but NJIT's membership (not your personal membership) is allowable, according to A-21, section J.28.a. Memberships in social, civic and community organizations are not allowable as charges to your grant, according to A-21 section J.28.d. and e. Subscriptions to business, professional and technical periodicals are allowable as a direct charge to your grant only if they are the NJIT subscriptions, as stated in A-21 section J.28.b. Office supplies, postage, local telephone and personal memberships are normally indirect costs according to A-21, F.6.b.(3), and hence are unallowable as direct charges to your grant. Also generally considered indirect costs are furniture, office equipment, and water coolers. Administrative and clerical staff should normally be treated as F&A costs unless explicitly included in the approved project budget (A-21, F.6.b.(2)). In cases such as these, the cost is not allowable unless we can document that the sponsor expressly approved the expense in advance (i.e., in the grant budget), or that our special purpose or circumstance justifies charging such items to the grant. Having the item in the agency-approved grant budget is the recommended path to assured allowability.
If incurred expenses are of questionable allowability, then there is the risk of not being reimbursed for that expense. Grant and Contract Services personnel should be contacted if you have a specific question about allowability of an expense.
No. Exclusion of student fees from grant reimbursement is driven by federal grant regulations, particularly OMB Circular A-21.
Fees may not be paid from a grant cost sharing account, either. This is because a sponsor will not recognize an expense as allowable cost sharing if the expense would not be considered allowable if it were a direct charge to the grant.
If necessary, fees may be paid from indirect cost recovery accounts, departmental accounts, or other non-grant and non-match accounts. The sponsoring agency will let NJIT know if there is a special exception enabling fees to be paid with their funds. Of course, tuition, stipends and student hourly pay are allowable direct charges to grants.
The following is a list of types of NJIT fees, and the federal regulations that limit payment of those types of fees from grants. State and other grant sponsors do not want to pay for expenses that would not be acceptable to federal sponsors.
|Fees||Regulation restricting payment from grants|
|Registration||OMB Circular A-21, section J.19., F.9.|
|Student activity||OMB Circular A-21, section J.15., J.45.|
|Athletic||OMB Circular A-21, section J.15., J.45.|
|Technology Infrastructure||OMB Circular A-21, section C.11, D.E.F. *CAS 502|
|Academic Facilities||OMB Circular A-21, section C.11, D.E.F. *CAS 502|
|Student Services||OMB Circular A-21, section J.45., F. 9.|
|Health Services||OMB Circular A-21,section J.14. allowable only if fee is allocated to grant and other functions (e.g., instruction)|
|International||OMB Circular A-21, section J.19., J.41.|
|Commencement||OMB Circular A-21, section J.6.|
|Late tuition||OMB Circular A-21, section J.4., J.18.,F. 9.|
|Late registration||OMB Circular A-21, section J.4., J.18.,F.9.|
|Returned check||OMB Circular A-21, section J.4., J.18.|
|Parking||OMB Circular A-21, section J.19., J.41.|
|Transcript||OMB Circular A-21, section J.19., J.41.|
|Schedule change||OMB Circular A-21, section J.19., J.41.|
|Special exam||OMB Circular A-21, section J.19., J.41.|
|Late graduation filing||OMB Circular A-21, section J.19., J.41.|
|Binding||OMB Circular A-21, section J.19., J.41.|
|Computer services||OMB Circular A-21, section J.19., J.41.|
|Deferred payment||OMB Circular A-21, section J.4., J.18.|
|Health insurance||OMB Circular A-21, section J.19., J.41.|
|*OMB Circular A-21, Appendix A is cost accounting standards (CAS). CAS 502 forbids a direct charge to grants for costs which are elsewhere classified as indirect (facilities and administrative) costs|
In rare cases, a grant or contract may end with a cash balance. This could happen, for example, in a fixed-fee contract that pays NJIT a certain amount for the deliverable, whether NJIT's expenses are greater or less than the fee. In this arrangement, NJIT bears the risk of unlimited unreimbursed expenses to produce the deliverable, so such an arrangement should be avoided in general. The usual arrangement is that NJIT gets reimbursed for expenses recorded in FRS that are associated with performance of the grant or contract, so there is no residual cash balance.
If a sponsor wants to give NJIT an amount beyond NJIT's expenses for a grant or contract, then the surplus should be given as a gift, through University Advancement.
If a grant or contract ends with a cash balance, then that balance will be transferred to a non-grant account of the Principal Investigator. A grant or contract account with the surplus will be identified to General Accounting by Grant and Contract Services. General Accounting will transfer the surplus to an account of the Principal Investigator. General Accounting will set up an account for the Principal Investigator if one does not exist. The activity and balance of the accounts will be reported periodically by Budget Department to the relevant department chairs and deans.
One use of the account created with a cash balance is industrial research. Industrial research agreements are fixed-fee contracts that promise NJIT a certain amount of payment for a specific deliverable to the industrial sponsor. Industrial research is less regulated than government grants or contracts, and usually involves a shorter time from proposal to award. Industrial research proposals should be processed through Office of Sponsored Programs (OSP). After approval by OSP, the costs of the industrial research may be charged to the unrestricted account with a cash balance. After the project is completed and the fixed-fee payment is received from the sponsor, that payment is deposited in the unrestricted account.
Use of accounts for industrial research can end badly in two ways. Principal investigators should manage their industrial research to keep a positive balance in their industrial research account. If the account has a zero or deficit balance, it will be frozen and closed permanently. Any deficit will be made up from another account of the principal investigator or the relevant department (or dean) if necessary. Another way that industrial research can end badly is for the principal investigator to deposit industrial research payments to the account, but to charge the expenses of industrial research to other accounts. In this way the industrial research account cash balance grows without bound, and the sponsors of the other accounts are overcharged. Any principal investigator who abuses their industrial research privilege in this way will be prohibited from further industrial research at NJIT.
Overspending refers to spending in excess of the total account budget. Usually, financial control systems prevent overspending; this is a discussion of a procedure for the rare occasions when it happens despite control systems. Overspending must be corrected by charging the overexpenditure to some other appropriate account that has a budget balance available. For example, salary and fringe benefit costs within the present fiscal year can be recast to another account that benefited from the labor. A cost transfer (journal voucher) can be used to move other kinds of costs from an overexpended account. Overexpenditures should be removed immediately when they are detected, but they must be cleared when an account is closed after its end date. There is an order of precedence for accounts that might be used to take expenses from an overexpended grant or contract account. Another account of the person responsible for the overexpended account is the highest priority target for a remedial cost transfer.
The other account should be appropriate for the charge, that is, its purpose should be related to the purpose of the overexpended account from which we are transferring costs. In addition, the account to be charged should have been active at the time of the expense. If no such account is currently available, then the department chair of the responsible person must be involved to identify a departmental account to absorb the grant overexpenditure. If there is no success at the departmental level, then an account of the corresponding dean should be used for the overexpenditure. Finally, a vice-presidential account could be used if no higher-priority account can be identified to absorb the overexpenditure. Grant and Contract Services staff will notify the same level in their chain of command as is being involved in the search for an offsetting account. For example, the Treasurer should be notified when a VP account is being sought, and the Director, GCS should be notified when the quest for an offsetting account is raised to the departmental level of the person responsible for the overexpenditure.
In addition to technical risks, some grants involve potential liability for NJIT and the Principal Investigator. Experimental cars may need car insurance, for instance. Another example is a grant for an instrument package hung from a government balloon - which involved risks of the NJIT package striking person or property. Some grants or contracts may involve hazardous materials or devices. Other awards may involve interaction with people or property in ways that are not typical in routine university operations, especially if so