Proposal and Rebudgeting: Are we doing it right?

This is the fifth in a series of CAS-related articles focused on the recommendations from issue-specific working groups. Because implementing these recommendations will affect faculty directly, the working group and steering committee seek your comments.

by Thomas B. Higerd, Ph.D., Professor and Associate Dean, College of Medicine

President Jimmy Carter once remarked, “A simple and proper function of government is just to make it easy for us to do good and difficult for us to do wrong.” Obviously, he made this statement before the advent of Cost Accounting Standards (CAS). I offer a more realistic statement: “The function of the government’s cost accounting standards is to make it difficult to do good and easy to get into trouble.”

This article focuses on the processing of research proposals and rebudgeting activities in the Office of Research and Sponsored Programs (ORSP). A working group was appointed specifically to review ORSP’s current procedures for evaluating proposals and suggesting modifications to ensure that the procedures are consistent with the principles and expected practices of the federal cost accounting standards. Most of the group’s suggestions have little or no effect on typical laboratory or clinical investigators; these suggestions will affect, however, those who are associated with federal pass-though funds or who have agreements with our affiliates.

Although CAS regulations extend far beyond ORSP, this office is the first administrative portal through which research proposals and budgets are reviewed relative to the requirement of the sponsors and to the various rules and regulations of our state and federal statutes. To help faculty and staff submit proposals that accommodate all appropriate regulations, ORSP has assembled an informative guide called the ORSP Policies and Procedure Manual. The working group reviewed this document and made recommendations to the Steering Committee.

What proposals are scrutinized by the Office of Research and Sponsored Programs?

Research revenues have grown from $38 million in 1993 to $70 million in 1997, with anticipated revenues of more than $82 million for the fiscal year ending this month. As MUSC enhances its national reputation as an academic medical center and experiences dramatic increases in research funding, it enlarges and diversifies its research portfolio. In the past, research proposals were relatively easy to recognize because of their obvious alignment with laboratory or clinical activities. With more and more investigations extending beyond the typical lab or clinical setting (for example, epidemiological studies, clinical trials, and health outcome analysis), the identity of the work as research becomes blurred. As a result, there are more research-ambiguous proposals being offered, often without initial ORSP review. Recently, the federal government has insisted that various clinical and training programs be administered and accounted for as though they were typical research projects. Clearly, most of these programs fall outside the classical definition of research, but they do involve federal funding (the so-called federal financial assistance awards). Both ORSP and the post-award accounting group can comply with the federal mandate; the uncertainty lies in determining a priori which federal fund requests should be administered by ORSP. These requests can include general education grants, HHS evaluation studies, laboratory construction grants, non-laboratory construction grants, or department agreements with the VA. The difficulty will be to articulate a new, expanded definition of research and non-research programs that require ORSP review.

How are they scrutinized?

The CAS-related activities which have been or will be highlighted in other articles in this series, often have their first review in ORSP. Once successfully reviewed, this office exercises its limited power of attorney and obligates the university to the commitments outlined in the proposal. If the proposal is accepted by the sponsor, ORSP initiates and authorizes the establishment of appropriate expense accounts. This office not only deals with pre-award issues, but often acts as liaison between the investigator and the sponsoring agency when issues of significant rebudgeting are raised.

Fortunately, MUSC has begun employing more service-oriented staff who function as investigator advocates on pre- and post-award issues. Partially as a result of CAS and partially because it is simply good business practice, itemized budgets will be required by ORSP for all grants, contracts and cooperative agreements. In addition, time and effort of personnel will be assigned and itemized in every budget. ORSP will continue to review every proposal for consistency of personnel and non-personnel costs to the appropriate direct and indirect cost categories, for voluntary and mandatory cost sharing, and for any tax levied as an unrelated business income tax. All rebudgeting activities, including no-cost extensions, will be viewed in the broader context of new obligations and commitments made by the investigator and university.

Are there other items that may affect faculty?

Most federal awards carry a statement signed by the principal investigator agreeing to the award’s terms and conditions. To align us closer to CAS requirements, the working group is recommending that department chairs and/or business managers certify in writing to the vice president for Finance and Administration that all expenditures charged to grants or contracts are allowable, reasonable and consistent with MUSC policies.

There continues to be discussion on whether the blue sheet which accompanies the proposal should contain a statement regarding additional space needs as a condition of the award. Ideally, investigators and chairs should discuss the possibility of needing additional resource prior to proposal submittal and acceptance.

Working Group: Proposal and Rebudgeting

Chair: Dillard Marshall (ORSP)

Members: Wes Corson, Ph.D. (Pathology); Jerry Garza (Medicine); Dan Knapp, Ph.D. (Pharmacology); Peggy Schachte (ORD); Marie Townsend (ORSP); Peter Cotton, M.D. (DDC); Beth Hansell (Pathology); Jack Mills, Ph.D. (Otolaryngology); Maurice Snook (COM); David Welch (GCA)

This working group has met on numerous occasions with partners from Coopers and Lybrand to construct their written report. The report includes recommendations for adoption by the steering committee. You are invited to communicate your thoughts on this or any other CAS-related topic.

How can you respond? The full report is available in paper copy or through MUSC's web page cited below. Included in these web sites are links to a CAS-specific on-line web discussion group where you may view responses from others and/or provide your own response. I will collect and collate your responses for presentation to the chair of this working group and to the steering committee.

Any questions, opinions or ideas? Call 792-4333 or e-mail <higerdtb@musc.edu>

To obtain: Paper copy of full report call David Welch, 792-2850

Web site of full report <http://www.musc.edu/research/cas/toc.htm>

Web site for The Catalyst <http://www.musc.edu/catalyst/>

Web site for responding <http://www.musc.edu/research/cas/response/>