Office of Grants & Contracts

Frequently Asked Questions

General Grant Information

Who can apply for a grant?

Within in the institution, any full time LCSC employee can apply for a grant for a project or program.

Certain rules apply, however. All applied for grants must be approved by the appropriate institutional authorities, and must fall within the institution's role & mission. Submission of a GAARP form is required.

Certain grants have additional conditions for eligibility. Please be sure to research eligibility for both the funder and the institution prior to grant application submission.


Who signs grant proposals and/or applications before
they are submitted?

Chet Herbst
Vice President for Finance and Administration
792-2240
cgherbst@lcsc.edu

A designated representative from the institution must sign the proposal because the grant money is awarded to the college and not the individual or PI who submits it.

 

Indirect Costs

What are facilities and administration (F&A) or indirect costs?

Facilities and Administration (F&A) costs are sometimes referred to as indirect or overhead costs. They are costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project an instructional activity, or any other institutional activity. (OMB A-21.E.1)
These types of expenses (administration, depreciation, water, electric, janitorial, maintenance etc.) are virtually impossible to identify on a grant by grant basis.


How are indirect costs calculated?

Through a formula negotiated with the Department of Health and Human Services. Our budget director negotiates the rate for LCSC every 5 years.
The LCSC Indirect cost recovery rate is 34% of direct costs EXCLUDING: 

  • Capital outlay/equipment (over $5K)
  • Tuition
  • Stipends
  • Scholarships
  • Rental cost of off-site facilities
  • Any amount over $25,000 on subcontracts
  • Federal training grants (e.g. TRIO programs) can only recover indirect at a rate of 8%

If you have any questions about what qualifies for indirect cost please contact the Office of Grants & Contracts at 792-2460 or 792-2461.

Federal agencies shall use the negotiated rates for F&A costs in effect at the time of the initial award throughout the life of the sponsored agreement. (OMB A-21 G7)


Why should we collect indirect costs on every grant?

An institution cannot afford to administer grants free of charge. It costs money to pay those who track grant budgets, prepare for audits, pay for the facilities, computers, and equipment used to support grant projects.
Federal agencies shall use the negotiated rates for F&A costs in effect at the time of the initial award throughout the life of the sponsored agreement. (OMB A-21 G7)

 

 

Types of Costs

What are direct costs?

Direct Costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. (OMB A-21.D.1)


What are allowable costs?

Allowable costs are those costs subject to reimbursement if they are (a) reasonable (a prudent business person would have purchased this item and paid this price), (b) allocable (assignable), and (c) consistently treated. Unallowable costs are those that are not reasonably and directly related to the project and those deemed unallowable by the sponsor. Therefore they are not eligible for reimbursement.

"Allowable" applies also to activities (something you do) as well as costs (something you buy; a line item). See OMB A-21: C-8 & J.

Generally it is not the type of cost that determines allowability. It is the purpose and circumstance of the expenditure. Many categories of costs are allowable as a direct or indirect (F&A), e.g., salaries, travel, materials, etc.

Some examples of unallowable costs are found in OMB A-21: C-8 & J. They are alcoholic beverages, entertainment (TRIO is the exception with an agenda and substantiation of a business purpose), fines and penalties, promotional materials, certain recruitment costs, organized fund raising, lobbying, commencement and convocation, general public relations and alumni activities, student activities, managing investments solely to enhance income, and prosecuting claims against the federal government and more. (OMB A-21: C-8a-d; & J)


What are allocable costs?

Allocable means that the cost must benefit the account to which it is charged in proportion to the benefit that it provides. According to OMB A-21C4, a cost is allocable if:

  • it is incurred solely to support work under the sponsored agreement;
  • it benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through the use of reasonable methods;
  • it is necessary for the overall operation of the institution and is deemed assignable in part to sponsored projects. (In other words, if the cost provides a benefit to a project equal to 50 percent of the cost, then only 50 percent should be charged to that project.)
  • any cost that is allocable to a federally sponsored agreement may not be shifted to another sponsored agreement to meet deficiencies caused by cost overruns or other funding considerations.

Grants, Contracts, and Cooperative Agreements

What is the difference between a grant, a contract, and a cooperative agreement?

  • Grant - The purpose is to transfer money, property, services, or anything of value to a recipient in order to accomplish a public purpose. The sponsor allows more freedom and less oversight with a grant.
  • Contract - Similar to a grant, contracts involve specific priorities.
  • Cooperative Agreement - The purpose is to transfer funds to the recipient to accomplish a public purpose. These awards are characterized by substantially more collaboration and involvement between the sponsor and recipient.
Grant Compliance

What rules and regulations govern grant management?

The Code of Federal Regulations (CFR), Executive Orders, the Office of Management and Budget's Circulars (OMB Circulars) and guidelines for the specific grant application as well as the approved proposal all govern the administration of sponsored programs.  Education Department General Administrative Regulations (EDGAR) also governs U.S. Department of Education sponsored programs.

  • OMB Circular A-21 (aka OMB Circular 2 CFR 220) Cost Principles for Educational Institutions - Sets forth cost principles for the reimbursement of allowable costs associated with federally sponsored agreements.
  • OMB Circular A-110 (aka OMB Circular s CFR 215) Uniform Administrative Requirements - Establishes uniform administrative requirements for grants and agreements with institutions of higher education.
  • OMB Circular A-133 - Establishes audit requirements and defines federal responsibilities for implementation and monitoring such requirements for institutions of higher education and other nonprofit institutions receiving federal awards.

Of these three Circulars, P.I.s and directors will find familiarity with OMB Circular A-21 (Cost Principles) and A-110 (Administrative Requirements) to be the most beneficial, in terms of effective budget administration of a federally sponsored agreement.  Since OMB Circular A-133 establishes audit requirements and federal responsibilities for institutions of higher education, the institution's administrative and budget personnel are responsible for being aware of those requirements.

 

What is effort reporting?

If you commit your time to a grant and receive wages or salary; or choose to donate time to a grant as part of the cost share agreement, you are required to certify or document that you actually gave the required percentage of your time you committed to that project. That is effort reporting.

Effort reporting is a requirement for all federal government grants, as per OMB A-21 J-10, (2) c.(1) (aka OMB Circular 2 CFR 220) Cost Principles for Educational Institutions.

There are risks of not complying with Circular A-21's (OMB Circular 2 CFR 220) effort reporting requirements.  In recent years, the federal government and its auditors have become more active in their review of effort reporting requirements, and a number of universities have received large audit disallowances as a result. Recent cases of audit disallowances are:

  • Northwestern University paid $5.5 million to settle issues related to problems with effort reporting, on a contracts and grants base of $325 million;
  • South Florida returned $4.1 million to the federal government to settle a number of charging issues, including effort reporting;
  • University of California paid a total of $2.1 million to settle an NIH salary cap limitation disallowance for the period July 1, 1995 through June 30, 2002.


An effort reporting system must provide records on how individuals participating in federally funded sponsored agreements actually spend their time. Because the federal government mandates effort reporting, it is incumbent upon institutions that receive federal funding to maintain accurate and auditable systems and records.

Documentation on how individuals spend time on federally sponsored projects is subject to federal audit and can be cause for institutional or individual disallowances.

Institutional disallowances can result if:

  • the effort report was certified by an individual other than the employee or someone who has "first-hand" knowledge of 100 percent of the employee's time;
  • the effort report does not encompass all of the activities performed by the employee under the terms of their employment;
  • the levels of effort reported do not appear reasonable, given the responsibilities of the individual.


Individual disallowances can result if:

  • the effort report certified by the individual is found to be falsified;
  • the levels of effort reported do not appear reasonable.


As evidenced above, federal audit disallowances can result in serious financial penalties for institutions. In addition, criminal charges may be brought against an individual certifying to falsified effort.  Current audit plans for federal auditors include effort reporting as a specific audit focus.


What about verifying cost sharing?

Cost sharing or match may be required for your project by either legislation or sponsor policy requirements; or the project may not require cost share or match, but in certain instances may be desired.  If so, OMB Circular A-110 .23 (aka OMB Circular 2 CFR 215) Administrative Requirements requires committed cost share or match to be documented.  Please note that volunteer services can be counted as cost share or match; if so, they must also be documented.

Voluntary uncommitted cost share or match are contributions to the project over and above that which is budgeted and committed in a sponsored agreement. OMB Clarification issued January 2001 indicates that uncommitted cost sharing need not be tracked or accounted for. 


We're hiring a person as Irregular Help to work on a federal grant.  Does that person need to complete time and effort reporting?

OMB A-21 J-10 requires AL employees who render services on behalf of a federally sponsored program to certify the percentage of effort provided to the program by completing time and effort reports.


Types of Grants

What's the difference between Challenge, Training, Research, Block, and Demonstration, etc. grants?

  • Competitive Grants - This type of grant is typically awarded for specific types of research, demonstration, training, or service to program participants. Any organization applying for a competitive grant must specify projected costs as well as program details, timelines and objectives.
  • Noncompetitive (Entitlement) Grants - A noncompetitive grant more closely resembles a contract than a grant. These grants are automatically awarded to institutions which qualify for legally defined formulas. The funded organization agrees to conduct activities in order to achieve a specific purpose based on an established program. The organization completes forms and assurances to secure funds.
  • Formula Grants - This type of grant is sometimes referred to as a state administered program. Formula grants are noncompetitive and often based on programs directed by population, per capita income, or enrollment from federal agencies. These grants are primarily awarded to state governments and have specific dollar amounts attached to them.
  • Challenge Grant - Is approved only if the grantee is able to raise additional resources from other sources as well. For example, an organization would make a challenge grant of $7000 if the grantee has gathered $7000 from some other source also.
  • Training Grant - Used to support teaching students at all educational levels to meet the sponsor's needs of a perceived shortage in a specific field. Training grants are usually more specific in the project purpose, students involved, and length of training support. Usually these grants provide direct support to student(s) who qualify, along with a modest amount of support, including tuition and fees. Many have lower F & A rates.
  • Research Grant - An award to an academic or professional staff member to support his/her ongoing research interest.
  • Block Grant - Block grants are dollars awarded by the federal government to state and local governments. Although federal guidelines are imposed, state and local governments are awarded discretionary authority over the uses of funds. Block grants address specific issues and needs within a certain jurisdiction this jurisdiction is responsible for monitoring and evaluation results.
  • Demonstration Grant - A grant made to establish an innovative project or program that will serve as a model, if successful, and may be replicated by others.

 

Matching Funds

What are matching funds?

Match is grantee contributions such as cash or in-kind (property, equipment, supplies, or services). Match can be defined as cash or in-kind (donated goods and/or services).

 

What is there to know about match reporting?

It is the Principal Investigator and/or Project Director's responsibility to document that the match requirement for a grant is met.  Cash match incurred related to a grant should be recorded in an account separate from the grant account. The account can be a specific account set up solely to record the match expenses.  In-kind match incurred related to a grant should be documented properly to support the match requirements.

The P.I. should inform the Controller's Office of the match incurred for reporting purposes. If a separate account is used for cash match, the Controller's Office can compile the information for the account. If a general account is used for match, the PI must provide the supporting detail to the Controller's Office. The P.I. must provide the supporting documentation of in-kind match to the Controller's Office.

The Controller's Office will report the match incurred based on the information provided.

 

Is there anything else about match I should know?

Yes. You can't use federal dollars for matching funds on a federal grant. (OMB A 110 - Section 23)

 

Gifts vs. Grants

What is the difference between a gift and a grant?

A gift is a donation from an individual, corporation, or non-profit organization. Gifts do not have requirements such as final reports. A gift can be designated to a particular department, however. Gifts are accepted and processed through College Advancement.

A grant is funding that may need to meet certain requirements or fulfill a specific purpose. Progress reports, budget reports, and general monitoring of the funding are usual requirements. Generally, when there is an expected outcome from the funding, it is a grant. If an expenditure report is required, it is a grant. Since its role is to oversee and monitor all grant activity, all grants need to be processed through the Office of Grants & Contracts.

 

What is the difference between OGC and College Advancement?

If external funds are an unrestricted gift or a donation (i.e. there is not a designation for said gift or donation), then it is handled and tracked through College Advancement.

Examples of gifts:

  • A voluntary donation of funds that does not include any conditions, reports, or requirements.
  • A voluntary donation of property with no implied responsibility on the part of LCSC or the Foundation to provide the donor a product, service, technical or financial report, intellectual property rights, or any other exchanges.
  • Honoraria: funds given directly to a faculty member by agreement not requiring administrative endorsement.

If external funds do have a specific designation or expected outcome (e.g. financial reports, project narratives), then it is considered a grant or contract and is tracked through the Office of Grants & Contracts.

Conditions that make funding a grant:

  • A formal proposal requiring the endorsement of an LCSC authorized official. (VP of Finance & Administration or President.)
  • Progress, technical, final reports and/or other exchanges are required.
  • The funding and/or activity have a specific performance period or completion date.
  • The agreement for the activity contains compliance terms and conditions from the Code of Federal Regulations, OMB Circulars, and guidelines in the grant award notification.
  • The agreement for the activity contains provisions for confidentiality.
  • The testing and/or evaluating of proprietary products are involved.
  • Unexpended funds must be returned to funder at the end of the activity.
  • Cost sharing and/or cash matching are involved in the performance of the activity.
  • The activity includes budgeted indirect costs.
  • The activity involves disposition of property, whether tangible or intangible, that may result from the activity (e.g. equipment, inventions, copyrights, or rights in data.)

 Funding as income

If I write a grant can I use that money as extra income?

Not usually. Grants usually pay for release time to permit faculty to pursue research and sponsored projects. Normally you may not earn more than 100% of your annual salary. The amount of money the grant pays you will be deducted from your college salary. An exception is if you work on the grant during the summer. You may collect up to 2 or 3 months of your salary during that time, in addition to the 100% you collected on your 9 or 10 month contract. (OMB A-21 J-10, d.1) Salary and wage increases must conform to the practices and policies of the institution.

Though OMB A-21 J10 d(1) says that charges for salary may not “exceed the proportionate share of the base salary for that period,” it also contains a provision for paying faculty on an overload basis. J10a states “These costs (salaries and fringe) are allowable to the extent that the total compensation to the individual employees conforms to the established policies of the institution, consistently applied, and provided that the charges for work performed directly on sponsored agreements and for other work allocable as F&A costs are determined and supported as provided below. A-21 C2(a, b, c) states that costs must be reasonable, given consistent treatment, and conform to any limitations or exclusions in these principles or in the sponsored agreement as to the types or amounts of cost items.”

Thus, if the additional salary conforms to the established policies of the institution, are allowable, consistently applied, apply directly to the sponsored agreement, is determined to be overload or “incidental work”, and approved by the sponsoring agency in writing, it may be possible to receive grant money as extra income.


If a P.I. receives 100% of their salary from a grant how much of an annual raise can they receive?

Per OMB A-21 J, 10, a: Compensation for personal services: "These costs are allowable to the extent that the total compensation to individual employees conforms to the established policies of the institution, consistently applied, and provided that the charges for work performed directly on sponsored agreements . . . The employee compensation policies of the institution must be followed and must be consistently applied regardless of the funding.”

Per OMB A-21 C, 3, d: Reasonable Direct Costs: (employee compensation is a direct cost), “Major considerations involved in the determination of the reasonableness of a cost are . . . the extent to which the actions taken with respect to the incurrence of the cost are consistent with established institutional policies and practices applicable to the work of the institution generally, including sponsored agreements.”

An institution may give a salary increase to select employees even if others at the institution are not receiving an increase if an institutional policy is in place and all employees that fall under the same circumstances are treated consistently. If it appears that an increase is being proposed for an individual without any policy to demonstrate consistent treatment and others in the same situation are not also considered for the increase, then the increase would not be allowed.

Funding Searches

Where can I find a list of potential funding agencies for my project?

The Funding Opportunities page.

 

I can't make heads or tails of these links. Can the OGS look into funders for me?

Yes, we can. If you have a specific project in mind you'd like to find funding for, you can fill out a Funding Search Request and send it to us. This helps us find the right funding sources for your project.

As most grants and funding sources are only open for a short period of time, there's a chance it may take a while for you to hear back from us on the status of the search. We will let you know as we come across a funder, or as dates open up what we have found that matches your request. You are welcome and encouraged to contact us at any time to follow up on the status of your search.

 

Scholarships, Personal, and Individual Grants

Does the OGC provide funding searches and/or assistance for school grants?

No. Please contact the Financial Aid Office at the school you are planning to attend.


Does the OGC provide assistance for individual or personal grants?

No. The Grants Office does not write grants for individuals or small businesses.


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