Please contact the Grants Office if you have any questions.
Roles and Responsibilities
Payments to State Employees
Out of state
Conflict of Interest
This document is intended to assist university employees in managing restricted funds. Always refer to specific funding agreements, proposals, and university policy for clarification.
Hamline University holds a high expectation for all financial/accounting transactions and desires to conduct business in full compliance with all applicable federal and state regulations, in addition to applicable AICPA accounting standards. University policies and business processes are intended to meet the business needs of the institution. The expenditure of funds received from various levels of government, foundations, and private agencies creates the need to fully comply with complex and sometimes cumbersome regulations and restrictions imposed by these entities.
Roles and Responsibilities
The Hamline University Accounting Office has the primary responsibilities for the financial management of externally funded projects including account establishment, transaction processing and compliance review, cash management, financial reporting and account closeout procedures. Accounting Office responsibilities include:
- Establish Grant/Contract and the corresponding budget in the accounting system to allow the Project Coordinator/Budget Manager to expend the restricted funds received.
- Perform risk analysis for certain categories of expenditures to ensure compliance with applicable regulations and HU policy.
- Prepares, negotiates and administers the institution’s indirect cost and fringe benefit rates in conjunction with the Grant Development Office and other university departments.
- Assist in the compliance review of expenditures, in accordance with University Policies and Procedures, OMB Circulars A-21 and A-110, and with any other general or specific regulations issued by Federal , State, and other sponsoring agencies.
Expenditures are to be made within the start and end dates of the sponsored project.
The regulations may require prior approval for budget modifications, equipment purchases, pre-award expenditures, international travel, and time extensions. The Accounting office must be contacted to determine if the change can be authorized internally or if it must be referred to the sponsoring agency for approval.
If a time extension or other modification to a sponsored project is required, the Project Coordinator must submit a request for modification form with a copy to the Accounting Office. The request should be submitted in sufficient time (at least 30 days before the desired date needed) to allow for proper approval. An approved copy should be forwarded to the Accounting Office.
- Accounting will assist in the preparation of required financial reports for the approval of Project Coordinators and submission to external sponsors. Accounting will provide training as it pertains to the financial administration of sponsored projects to different University constituencies including training in BANNER/ Piperline.
- Assist the Project Coordinators in the financial closeouts and terminations of sponsored projects. The Project Coordinator is responsible for preventing the over expending of sponsored projects. To aid the Project Coordinator’s in avoiding deficits daily account balances can be obtained through Banner/Piperline using the Restricted Query, in addition accounting staff will provide notification of problems when approving expenditures. Federal regulations require final financial reports to be submitted within 90 days after the end date of the project. If this deadline is not met the sponsor could withhold payment from HU and/or refuse to make payment.
- The Accounting Office will coordinate all audits to be conducted by external audit agencies and provide auditors with any information they require in their review of restricted projects.
A university employee who is authorized as a budget manager for a Restricted Fund has the following responsibilities:
- Approve all expenditures as appropriate and allowable in accordance with applicable funding agreements and legislation.
- Perform timely review and verify accuracy of monthly expenditures in Piperline/BANNER.
- Provide explanation of variances between budget and actual expenditures to Accounting.
- Be aware of reporting dates and coordinate the submission of all required financial, progress and close out reports to the sponsoring department agency or foundation. Accounting will assist the preparation of Financial Reports and submit claims for financial reimbursement.
Payments to State Employees
including MnSCU employees
Most State of Minnesota fund agreements/contracts contain a prohibition on any payments being made to state employees including “reimbursement for any expenditures, including travel expenses; cost of registration fees for training sessions or educational courses presented or arranged by GRANTEE (Hamline University); payments to state employees for presentations at workshops, seminars, etc. whether on state time, vacation time, leave of absence, or any other non-work time.” According to the state officials, employees of the MnSCU system are considered to be state employees.
In Minnesota Any travel that is related to state-funded activities must follow the state guidelines regarding meal expenses. The state
prescribes a per meal amount which includes any tip and tax. These guidelines will be applied to grants not funded by the state
which are related to a state funded program. If travel is being funded from Hamline University unrestricted funds (100) then the
current university guidelines will be applied. Receipts must be supplied for all travel expenses.
Out of state Any out of Minnesota travel that is funded from state grants or related funds must have prior approval in writing (email is
acceptable) from a state official. Travel expenses will not be processed until this permission is received in Accounting.
Federal grants typically have a restriction that all travel out of the United States must be flown on “a US flag carrier,” unless none is available. This means that airlines such as Northwest, American, Delta, or United must be used for these trips.
Most state and federal grants prohibit any payments for alcohol and typically restrict the payment of any entertainment expense from the grant funds. In cases where entertainment has been identified and approved in a grant budget, expense claims must include entertainment purpose and a list of all attendees.
Some federal and state grants restrict expenditures for advertising, promotion or marketing purposes unless they are specifically identified in the grant proposal and approved budget.
An honorarium is a one-time payment made to an individual, who is not an employee of the university, for a special and non-recurring activity or event for which a fee is not legally or traditionally required. The intent is to show appreciation for participation in university educational, research, or public service activities or events.
An honorarium is provided as a token of appreciation for participation in an activity or event, and not as a contractual obligation to pay for services rendered. An honorarium cannot be used as a payment for specified services rendered by either an independent contractor or a university employee.
Most federal or state contracts or grants prohibit the payment of honorarium gifts; some may allow payment of student stipends based on course attendance or completion. Before making these payments, confirm that the terms of the particular contract or grant expressly authorizes such payment.
An independent contractor may be utilized for work on a restricted fund provided that the nature of the task, location, payment arrangement, risk, and nature of work meet the employee vs. independent contractor test. However, a contract must be negotiated and signed in accordance with the university delegate of authority.
Both funding agencies and the University recognize that cost transfers from one project to another are occasionally necessary to correct bookkeeping or clerical errors in the original charges. They also recognize that closely related work may be supported by more than one funding source, and transfer of costs may be required in these cases. Frequent, late, and inadequately explained transfers, especially those that involve projects with overruns or unspent balances, raise serious questions about the propriety of the transfers. In addition, the reliability of the University's accounting systems and internal controls are questioned when there are frequent transfers. Therefore, cost transfers must be monitored carefully in order to ensure compliance with federal regulations.
Typically, cost transfers are appropriate when their purpose is to correct posting or bookkeeping errors in the original charges, to reallocate resources between accounts.
Appropriate circumstancesA cost transfer will be made under appropriate circumstances when the charge qualifies as a direct cost of the sponsored project/restricted fund being charged. OMB Circular A-21, Section D.1 specifies that "direct costs are those costs that can be identified specifically with a particular sponsored project...or that can be directly assigned to such (a project) with a high degree of accuracy."
Allowability of cost transfersThe allowability of cost transfers is dependent on the following factors:
Cost transfers must be timely, preferably as soon as possible after the original transaction, but in any case not later than 60 days after the end of the month of the original transaction. Transfers made long after the original charge raise questions concerning the propriety of the transfer. Therefore, transfers made after 60 days will be considered only under extenuating circumstances.
- EXPLANATION AND DOCUMENTATION REQUIREMENTS
All cost transfers must be supported by documentation that contains a justification for the transfer. The reason for each cost transfer must be properly and clearly explained, with the help of supporting documentation when appropriate, in order to prevent audit disallowances. The School or Department has primary responsibility for fulfilling these requirements and maintaining the related records. The Accounting Office may request copies of additional supporting documentation or information if questions arise during the review process.
Great care must be exercised to ensure cost transfers are justified in a clear, complete and convincing manner. When transfers are inadequately documented, or are made for inappropriate reasons and therefore indefensible in an audit, the School is responsible for these expenses and they must be transferred to other departmental unrestricted accounts.
The written explanation should clearly include the following:
a) a description of the expense(s) being transferred, including why and when the original charge(s) occurred, AND
b) why the receiving fund number was not originally charged,
c) why it is appropriate to charge the receiving fund number, AND, if applicable,
d) if the transfer is over 60 days* the explanation must include a justification for lateness, AND
e) how the error was discovered and what is being done to prevent this from occurring again.
*Transfers made after 60 days will be considered only under extenuating circumstances. Extenuating circumstances include but are not limited to the following: a) The official award document, including amendments or modifications, was received after the start date of the
award, causing a delay in the establishment of project account.
b) The account number assignment was delayed because of negotiation issues.
c) The official approval form from the sponsor for specific expenditures was received after the expenditure(s) was
d) The official approval from the sponsor for specific actions, such as a no-cost extension, was received after the
expenditure(s) was processed.
Examples of incomplete and invalid explanations that are not acceptable as stand-alone explanations include the following:
a) To correct coding
b) To correct an error (other than bookkeeping)
c) Departmental duties did not allow time for correction
d) To charge correct account
e) Work volume delayed charging the correct account
f) To transfer salary or a portion of salary charges to the account for which the work was actually performed
g) To correct salary distribution
h) Redistribution of general departmental effort
- SIGNING AUTHORITY
All cost transfers require the approval signatures of the budget manager having departmental administrative responsibility for the program, the primary investigator or project coordinator responsible for the fund, and the director of accounting systems or the associate vice president of finance.
Conflict of Interest
Item B.9 of the Hamline University Staff Guidebook, approved by the Hamline University Board of Trustees May 9, 2000, states the following:
- Hamline has an excellent reputation for conducting its business activities with integrity and in accordance with the highest ethical standards. Hamline expects all employees to uphold that reputation and not engage in any activities which conflict or may conflict with the values, mission, and interest of the university.
A conflict of interest includes:
a) Giving or receiving a sizable gift from someone outside the university which is in any way connected with employment
status at Hamline.
b) Entertaining or being entertained in connection with university business beyond what is appropriate.
c) Obtaining personal gain or potential personal gain from information, personal contact, or bribes, kickback, or other
inappropriate payments usually not attainable except through employment with Hamline.
d) Any outside activity which may interfere with the operations of the university or the employee's loyalty to the
Faculty and staff members are advised that individual units of the university have established policies and procedures governing conflicts of interest that may arise in the pursuit of official university business. Faculty members should consult the faculty handbook for their respective academic unit for details. Staff members who serve as grant-supported project directors/principal investigators are advised that they are subject to the same policies and procedures regarding conflicts of interest that apply to faculty.
- In addition, government agencies awarding grants to the university also may have conflict of interest policies and procedures. Hamline faculty and staff members who serve as project directors/principal investigators for such grants will ordinarily be informed by the granting agency, at the time a grant award is offered, of conflict of interest policies and procedures that apply.
- To meet National Science Foundation grant requirements, Hamline University has established particular policies and procedures regarding conflicts of interest that apply to NSF grants. These policies and procedures are considered as applying in addition to other university policies and procedures.
The federal government, through the Office of Management and Budget (OMB) Circular A-21, Section J.10, requires effort certification on externally-sponsored activity, including state funded activities which utilize federal funds. In order to receive and maintain eligibility for funding, sponsoring agencies require accurate and reasonable documentation to support that labor charged to individual restricted funds are consistent with the effort expended. This certification is reviewed for two purposes: to verify that the percentage of effort placed on a federal award is not less than the percentage of salary charged to the appropriate restricted fund and to capture any voluntary cost-sharing by indicating an excess percentage of effort as compared to the percentage of salary.
Hamline's effort certification policy is intended to meet this federal requirement:
- AFTER-THE-FACT REPORTING
Hamline University uses an “after-the-fact activity” system to comply with the federal effort certification requirement. Under an after-the-fact system, distribution of salaries and wages for employees working on externally-funded projects will be supported by activity reports. Charges are made initially on the basis of estimates made before the services are performed. Activity reports will reflect an after-the-fact reporting of the actual percentage distribution of activity of employees. If significant (>10%) differences between the charges and actual distribution, the charges will be promptly adjusted to reflect actual activity.
- EMPLOYEE EFFORT CERTIFICATION REPORTS
Employee Effort Certification Reports will reasonably reflect the percentage distribution of efforts expended by Hamline faculty and exempt professional staff involved in federally-funded grants, contracts, and cooperative agreements. The report will account for 100% of an employee’s actual effort for the given time period.
100% effort is defined as the effort expended to accomplish the full set of activities encompassed by Hamline University appointments regardless of the actual number of hours expended on those activities. 100% effort is not defined as a single, standard number of hours or days per week because it will likely be different for each faculty/staff member and may vary during the year. The number of hours implicit in an individual faculty member's 100% must be reasonable and supportable to department, school, college and external reviewers if requested.
The employee should indicate the percent effort (number of hours worked on an individual activity divided by the total number of hours worked for Hamline University) for all sponsored research and curricular (i.e., instruction, administration, public service) activities.
The employee should provide an account of all effort expended on a sponsored activity, even if the sponsor did not compensate the employee for that activity, which constitutes “cost sharing.” This can occur on a mandatory or voluntary basis. Mandatory cost sharing occurs when it is required by the sponsor at the time of application. Voluntary cost sharing represents additional effort expended on a project that is not required by the sponsor. Although it is the University’s practice to minimize voluntary cost sharing, the PI must record all effort expended on their projects regardless the source of compensation.
Employee effort certification reports do not need to be completed by clerical staff or students that fill out a weekly time sheet. Principal investigators and/or project coordinators will be required to verify that the information provided by any employees working on their grants is accurate.
Employee effort certification reports are required for three reporting periods annually and must be submitted to the Accounting Office no later than the 30 days after the end of the reporting period. The reporting periods and submittal deadlines are provided as follows:
a. Summer (June 1–August 30): September 30 submittal deadline
b. Fall (September 1–December 31): January 30 submittal deadline
c. Spring (January 1–May 31): June 30 submittal deadline
Completed Employee Effort Certification Reports will be filed in the Accounting Office.
- OTHER ITEMS OF NOTE
1. When a PI/Project Coordinator is absent in excess of 90 days from his/her project, approval may be required from the
2. Changes in effort require approval from the VP/Dean’s Office and/or the Sponsoring Agency as appropriate.
3. Time spent in the preparation of proposals cannot be charged to a sponsored accounting unit. Therefore, it is
inappropriate for an employee to be paid from sponsored accounting units to prepare and submit proposals.
University policy requires indirect cost (sometimes referred to as overhead or F&A cost) to be recovered on all grants applied for and funded by various levels of government, agencies, and foundations. Any exceptions to the published university rates require approval in advance from vice president for finance and treasurer.
Amounts recovered as indirect cost will be allocated between the responsible school and the Grant Accounting Office in accordance with current university policy.
Any item with a value of $1000 or more and a useful life of more than two years is considered to be a capital purchase according to university policy. Federal and state agreements typically restrict the purchase of capital items and require than any capital equipment be returned to the sponsoring agency at the end of the grant agreement. In cases where the agreement does allow the purchase of equipment, care should be taken to determine what tracking is required and who will cover expenses related to equipment maintenance or upgrade.
Government grants that require a claim or certification form to be completed certifying actual expenditures will be processed in the Accounting Office. All other invoices will be processed by the school or department responsible for the grant or restricted fund using the BANNER General AR module.
Supplementary information may be found in the appendix of the Restricted Funds Guidelines.