Expense Request Approval Process

Sponsored project expenditures must be in accordance with standards set forth by the sponsor. Federal expenditures must comply with the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, commonly referred to as Uniform Guidance. Adherence to these cost principles is necessary to prevent cost disallowances, penalties, and/or fines. Expenditures on sponsored projects must conform to individual sponsor requirements.

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.

Direct Cost Expenditures

Principal Investigators (PIs) have the responsibility to verify that charges on their awards are allowable. Investigators may receive assistance with financial tasks from the Department Administrator, and their Grants & Contracts Accounting (G&C) Grants Officer (GO). However, the PI remains the responsibility for the review and approval of charges on their sponsored project(s). PIs and GO review and approval of expenditures is to assure that:

for federal awards, direct costs meet the standards of an allowable cost per Uniform Guidance;
direct costs meet the specific terms of the project and are reasonable, allocable, and allowable;
expenditures occur within the project period;
expenditures are appropriately documented;
expenditures meet the limitations of the sponsor-approved budget.

Cost Sharing

Expenses incurred to meet cost sharing commitments require the same accounting, financial, legal, and regulatory burdens as expenses charged directly to UND sponsored awards. Expenditures recorded as cost sharing must follow the guidance in this document and UND's Cost Sharing policy.

Procurement

It is a requirement to follow UND's Procurement policy when procuring goods and services using sponsored funds. Additionally, you should pay attention to individual sponsor award terms and conditions to ensure that award procurement requirements are noted and followed.

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.

The PI will make a timely review of project expenditures and remaining balances;
The PI, with assistance from the Department Administrator when necessary, will review PI Reports and Detailed Transaction 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 Department Administrator will monitor the budget and submit rebudget requests when necessary.
Grants & Contracts Accounting (G&C) reviews expenses during the financial reporting process, e.g. monthly invoicing, LOC drawdowns, and during quarterly transaction monitoring.
- Grants Officers receive monthly queries from the Associate Director to identify and correct budget errors that may occur to include cost overruns. Any cost overruns that do occur based on budget level are removed by the PI and department from the grant award in accordance with UND's Cost Transfer policy.
- The Peoplesoft Grants Module financial system enables a GO to create and track approved budgets and expenditures. Based on budget level (1-5), UND's financial system prevents cost overruns from occurring by rejecting expenses that are in excess of total funds available for the award. These expenses are returned to the department to be placed on alternate funding. It is ultimately the Principal Investigator's responsibility to monitor their budget/expenses monthly to ensure total funds spent will not exceed the approved budget.

Prior Approval for Certain Expenditures

Sponsor prior approval is often required for certain direct cost expenditures. The Uniform Guidance, sponsor grant policy, and/or the award terms and conditions may 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 sponsor may be required before the expense can be incurred. Common examples of these types of costs include the addition of a subaward or purchase of equipment that was not included in the proposal.

Documentation to Support the Allowability of Expenses

Documentation is required to support the allowability of any expense charged to a sponsored award. The supporting documentation for expenditures should be adequate to demonstrate and justify that the expense:

Provides a direct benefit to the award; and
Complies with any award restrictions and approval requirements outlined in the terms and conditions of the award.

Examples of supporting documentation:

Emails from the PI with explanation and justification of cost
Budget Justification
PI approval of invoices
Contract documents

Under certain circumstances, additional documentation may be required at the request of G&C or the sponsor. Documentation should include a full succinct explanation to substantiate the direct benefit to the project. All documentation must be maintained according to UND's Record Retention Schedule.

Roles & Responsibilities

Principal Investigator (PI)

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 conjuction with the project.
Authorize requests for expenditures including goods, services agreements, subawards, and personnel expenses.
Ensure expenditures occur within the project period.
Monitor and approve payments for consultant services and subawards (PI approval).
Monitor project expenditures to confirm they are allowable, allocable, and reasonable and promptly request the Department Administrator make corrections upon identifying a charge that needs to be removed from the project.
Initiate cost transfers.
Monitor budgets and submit, or have the department submit, budget revisions to RSPD or G&C.
Obtain prior approval through RSPD or G&C when required by the sponsor's terms and conditions before funds are committed or expended on the sponsored project.

Department Administrator

Apply the factors of allowability (in accordance with Uniform Guidance for federal awards) prior to approving an expenditure.
Ensure PI or his/her/their designee provides adequate justification/documentation of the expense on the project.
When necessary, assist the PI with PI and Detailed Transaction Reports of expenditures charged to each sponsored project to ensure expenditures are allowable, and review any reconciling items or budget overruns with PI.
Assist in the submission of cost transfers and rebudget requests.
Alert the PI and/or G&C to issues and concerns.

Grants & Contracts Accounting (G&C)

Apply the factors of allowability (in accordance with Uniform Guidance for federal awards) prior to approving an expenditure.
Review subaward invoices for adherence to the budget and the terms and conditions of the subaward.
Review and approve cost transfer requests over 90 days, when appropriate.
Facilitate, review, and approve sponsor prior approval requests.
Review and approve rebudget requests.
Process budget revisions in the Univeristy's financial system.
Monitor grant expenditures and review all expenditures prior to financial closeout and ensure all unallowable expenses are removed.