Sponsored Program Compliance
Allowable "Late-In-Period" Expenses
Expenses for the acquisition of materials and supplies late in the project period (within 90 days of the project "end date") will routinely be scrutinized to assure that the expense is allowable and allocable. While such expenses may be completely appropriate, they may be reviewed to assure that unspent project funds are not being "used up" with acquisitions that do not benefit that project.
One key to the allowability of these expenses is proper documentation. This documentation is in the form of a written justification to be attached to the purchasing requisition or placed in the departmental award file.
Here are some real situations:
The last-minute photographer
A UR internal auditor conducting a postaward review of project expenses noticed that an expensive camera was purchased at the very end of a grant project period. The camera had unique capabilities related to the research being conducted, but appeared to be acquired too late to be of any benefit to the project that paid for it.
The PI explained that the technical monitor suggested that UR use the remaining funds on the grant to acquire this important piece of research equipment. The sponsor wanted to see its funds used to advance work in this area, and the camera was a good way to do that. What the PI did NOT do in this example was to include a written justification in the award file as to why the purchase was made. Usually, the sponsor will not provide approval for "late" purchases and will leave the decision with respect to allocability to the grantee. In this case, a confirmation from the Grants Officer may have been prudent.
The final frontier
A project involves a series of experiments and data analysis. At the end of the project period, the PI authorized the acquisition of a desktop computer.
The PI knew that such an acquisition would be questioned for at least two reasons: it took place late in the project, and was for a piece of "general purpose" equipment.
The PI, therefore, included a written justification with the purchase requisition that stated that in order to complete the final report for this project, a particularly intensive amount of data analysis would be necessary. The approved project budget included funds to purchase a desktop computer especially for this analysis. The amount of work to be done, and the timeframe in which it had to be accomplished, made it impractical to use existing department equipment for this task.
The purchase of the computer was allowable, allocable and reasonable, and therefore appropriately charged directly to the project.
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