Accounting Office

Uniform Guidance

Recipients of Federal funding are required to have solid management practices for administering the award, and have accounting practices that align with cost principles. Cost Principles, as defined in the Uniform Guidance Subpart E, specify that a cost can be charged to a Federal award only if it is allowable, reasonable, and allocable. In addition, items of cost must be consistently treated by the award recipient.

Factors in Determining Allowability

UG §200.403 Factors affecting allowability of costs

Allowability of a cost can be determined by answering the following questions:

• Is the cost reasonable and necessary for the program?
• Is the expense in compliance with laws, regulations and grant terms?
• To what extent is the expense allocable to the grant?
• Is the cost adequately documented?
• Is the cost consistent with grantee rules that apply to both Federally funded and non-Federally funded activities?

When Are Costs Reasonable?

UG §200.404 Reasonable costs

"A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost." In order to determine if the cost is reasonable, the following questions must be asked:

• Is the cost ordinary and necessary for the program?
• Do sound business practices support the expenditure?
• Are the costs comparable to market prices for comparable goods or services in the geographic area?
• Have all concerned acted with prudence , considering their responsibilities to the organization, community, and others?

How do I Determine Cost Allocability?

UG §200.405 Allocable costs

Allocable means that good or service can be assigned to an award or cost objective in accordance with the relative benefit achieved. Costs must be charged in proportion to the benefits received, and costs incurred for joint or common objectives are included in the institutional Facilities and Administration (F&A) and cannot be charged to the project.

Policies & Procedures

For policies, procedures, and forms related to Extramural Funds, visit the consolidated Business & Financial Services Forms & Resources and Policies & Procedures webpages, which includes information on: 

• Federal Guidelines
• Major Sponsors
• Manuals & Bulletins
• Facilities & Administrative Rate Agreements
• UCOP & UCR Policies
• EMF Procedures (e.g., Cost Transfers, etc.)

Award Setup

Once an award is approved in Kuali, it is automatically transferred to Oracle Financials. Each Kuali Award issued by the Sponsored Programs Administration (SPA) is associated with a PPM Award; both share similar numbering; for example, Kuali Award 012345‐0001 would be associated with PPM Award K012345. Each PPM Award may have one to many related PPM Projects. The ten‐character PPM Project code utilizes the PPM Award number as it’s basis; for example, PPM Award K012345 would be associated with project K012345001, K012345002…K012345099. The PPM project is one element of the UCR Chart of Account (COA) GL chart string and the primary element in the PPM POETAF chart string. Distinct Projects will be created automatically by the Accounting Office (EMF) for the following, and there is no need to submit requests for these items: 

• Main Prime PI (new awards will end in 001; awards converted from UCRFS may be numbered differently)
• Participant Support (next sequential project)
• Cost Share (ends in 099. Note: department must provide fund‐activity‐function‐program code of cost sharing source via Kuali Build form)
• Program Income (formerly known as STIP; end in 098)
• Fabrications (ends in FXX and will be defined by General Accounting based on approved fabrication requests)
• Sponsored Capital Programs (starts with RV; note numbering is based on capital project numbering)
• Components subject to different Facilities and Administrative Rates than main award (next sequential project)
• Annual funding with no automatic carryforward to future years (next sequential project)

EMF will assign the department's default Chart of Accounts (COA) to the Award. In the event the PI and/or Department wishes to utilize a different COA for a particular project, then the Chart of Account - Sponsored Programs (for Cost Sharing and/or Default Override)  form will need to be completed and routed to EMF.  (A link to that form will be embedded in the Award notification email.) 

Project Budget

Department's receive an email notification with the award details, indicating that a PPM Project it is ready for budgeting. To create and manage an PPM Project budget, department analysts (research administrators/grants analysts) are required to complete the Oracle: Project Portfolio Management for Contracts and Grants training. For more information, visit Finance Training.  Remember, to begin charging expenses to a project the budget must first be created and baselined.

New Project Requests 

New Projects may be created upon request from Prime PI’s department for Kuali contract and grant sponsored awards under the following circumstances:

• Budget allocation to Co‐Investigator(s) listed on the award documents
• New project under a different Project Organization (i.e., activity) under the Prime PI’s home department on converted projects.
• Major elements of a sponsor award that must be separately tracked and reported

To initiate a new Project request:

1. Complete this form
   • New Project Name should follow the following format Agency Award# + Project PI + Expiration Date + (plus “Participant Cost” or “Cost Share” or “Diversity as applicable) + Agency Name + Project Title (up until the field length limit is reached and reserving last 5 characters for uniqueness) + Last three of project number (to ensure uniqueness) Page 2 of 2
   • Allocations to BC35 and BC36 are normally included in the primary project (typically project ending with 001) and will automatically sync with Oracle Budget and Oracle GL with the default activity for Undergrad and Grad Student Aid and function 78—no new project and function override is required in these scenarios
2. The Prime PI’s C&G analyst must prepare a reduction on the project working budget by the amount to be transferred to the new project and baseline it. Confirm the reduction is complete and provide version number. Note: converted project costs will not be able to be transferred to a new project, the budget adjustment should be based on the budget balance as of 6/30/2023
3. Specify the Function Code, if other than the award function default
   • Allocations to BC35 and BC36 are normally included in the primary project (typically project ending with 001) and will automatically sync with Oracle Budget and Oracle GL with the default activity for Undergrad and Grad Student Aid and function 78—no new project and function override is required in these scenarios
4. Endorsement of the request by the Department Financial & Administrative Officer (FAO), and if required by the Organizational unit, endorsement of the Org CFAO
5. Email to EMF@ucr.edu using subject “Request for New Project‐(Kuali Award #)”
6. Requests will be reviewed by the EMF Manager to coordinate the creation of new projects as appropriate.

Expense monitoring is a key aspect of effective financial management at the university, especially for sponsored research. Each sponsored project has a specific purpose outlined in the award's terms and conditions, with the necessary expense types detailed in the approved budget. Sponsors expect a clear connection between the purchased items and the project’s goals.

To ensure expenses are allowable, allocable, reasonable, necessary, and consistently applied, regular monitoring through monthly reconciliation is essential for identifying errors and maintaining compliance.

Chart of Accounts "Project" & POETAF 

To charge expenses to your PPM Project, it is essential to understand the following:

• Data in PPM is displayed through a specialized version of the Chart of Accounts (COA) called POETAF, which stands for:
  Project | Organization | Expenditure Type | Task | Award | Funding Source
   
• POETAF expenditure categories and types are aligned with General Ledger (GL) budget categories and expense accounts.
• Most boundary systems (e.g., UCPath, Banner, Web Recharge, Concur Travel and Expense) utilize GL COA chart string, where only the COA Project Number segment is entered by the transactor, and the data is then mapped to the PPM POETAF structure.
• Native Oracle Financials modules, such as Procurement, require the entire POETAF chart string be entered for transactions.
• Click here to learn about the definitions for all Chart of Account (COA) and POETAF segments. 
• Click here to view a visual representation of how Project vs. Non-Project transactions and data flow through UCR's financial systems and reporting tools.

Oracle Financials - Procurement

When submitting a requisition, users must ensure the accuracy of the chart string. For purchases using Contract & Grant or Capital Project funding (PPM Projects), the Project Number should be entered in the first field, followed by the correct POETAF segments.

A common issue occurs when the Project Number is mistakenly entered in the Charge Account section, leaving out the required POETAF segments. This results in manual corrections for each purchase order (PO) to include the appropriate Project Portfolio Management (PPM) segments. To resolve this, any requisitions with a Project Number (excluding 0000000000 DEFAULT) entered in the Charge Account section are rejected. Additionally, the default COA feature cannot be used for Project-related purchases. Please verify accurate chart string entries to avoid procurement delays.

If your requisition is rejected, click Action, select Edit, clear the Charge Account field, enter the correct Project Number, and submit the revised requisition.

For purchasing or Oracle procurement inquiries, please contact Procurement Services by submitting a ticket to 'Procurement & Accounts Payable'.

As outlined in Subpart E—Cost Principles of the Uniform Guidance, click here for guidance on key costs to consider during budget preparation and post-award administration.

Effort Reporting

Effort reporting is the method of certifying to the granting agencies that the effort required as a condition of the award has actually been completed. Federal regulations require that any individual committing effort on a federal or federal flow-through contract or grant certify that the salary charged or cost shared by the institution is reasonable in relation to the effort expended on that project. Uniform Guidance 2 CFR 200 (formerly 2 CFR Part 220 and OMB Circular A-21) sets the criteria for acceptable methods of charging salaries and wages to federally sponsored projects, and requires that institutions follow acceptable methods for documenting the distribution of effort for all project personnel. Faculty serving as investigators on sponsored agreements are responsible for certifying the effort they and their staff dedicate to sponsored activities.

What is Effort?

Effort refers to the time spent on a specific activity, including work on sponsored projects with direct or cost-shared (contributed) salary. It encompasses all university responsibilities, such as research, teaching, preparing proposals, service, clinical duties, and administrative duties, performed over a set period.

What is the Payroll Certification System?

The Payroll Certification System automates, streamlines, and simplifies the effort reporting and certification process, offering comprehensive information on all effort spent on federally sponsored projects. Since salary expenses make up the largest direct cost on sponsored projects, this system minimizes compliance and audit risks associated with effort reporting. It helps protect the UC Riverside campus from significant audit disallowances and potential loss of federal funding, which could result from an ineffective effort reporting process.

The system presents effort report details in a clear and user-friendly format, captures electronic certifications to track completion and maintain an audit trail, and offers an easy way to correct and re-certify reports. Effort reports must be certified within 120 days after the end of the service period, with certifiers receiving advance notifications.

For information on system access and roles, see Payroll Certification under Financial Applications.

Note: Payroll Certification System is in development. Guidance will be available soon!

Award Closeout

Award closeout is the process by which the University determines all allowable and applicable expenses are properly accounted for under the award’s terms and conditions. If at the end of the project period, the Principal Investigator has not secured a renewal, supplement or no-cost extension, the fund closeout process must be conducted. Upon award expiration, final financial deliverable requirements stated in the award documents or sponsors policy manual are to be completed. It is important that all requirements are completed within the timeframe indicated by the award terms and conditions. Non-compliance can lead to financial loss and places the University at risk of obtaining future funding from the sponsor.

Sponsor Requirements

The financial closeout of Sponsored Projects ensures fiscal compliance with both sponsor and university policies. Timely submission of financial reports and invoices is critical for reimbursement of allowable project costs and will be strictly enforced.

Closeout requirements, including policies, procedures, and documentation, vary by sponsoring agency. Proper interpretation and application of government, federal, sponsor, award-specific, and university policies are essential. Since regulations can differ, the order of precedence typically begins with the individual award terms, followed by relevant regulations, with the most restrictive rule often taking precedence.

Campus Obligation

The University has an obligation to ensure timely fiscal compliance with Sponsor and University's policies and guidelines. It is essential that collaboration from Principal Investigators, research administrators of the administrating unit, and support from other business unit(s) takes place as appropriate. Understanding the shared responsibilities to financially close out funds is critical to effective and timely fund closeout.

• The Principal Investigator is responsible for complying with award specific terms and conditions, including the submission of programmatic, financial, invention, inventory and equipment reports.
• The Extramural Funds (EMF) team is responsible for ensuring accurate and timely financial reporting to the sponsor.
• The Department Chair or ORU Director is responsible for ensuring that all financial transactions are properly recorded in a timely manner to be in compliance with Sponsor’s and University’s policies and guidelines.

Closeout Procedure in Oracle Financials (PPM)

The closeout process for sponsored projects begins when EMF (central office) initiates the closing by changing the award project status to "Pending Close." At this stage, departments should proceed with closing activities, ensuring that:

• All purchase orders are closed
• All costs are posted
• All transactions are fully processed

These steps must be completed for each project within the award. Once these actions are finalized, EMF completes the remaining tasks to officially close the project and updates the status to "Closed."

• Pending Close: No new transactions are allowed, but current transactions can still be processed.
• Closed: No further transactions can be processed on the project.