Glossary of Terms
Agreement -- although often used synonymously with "contract," an agreement is a broader term. In law, an agreement is a concord of understanding and intention between two or more parties with the respect to the effect upon their relative rights and duties. If an agreement is the consent of two or more parties concurring to the transmission of some property, right, or benefit with the view of contracting obligation, or a mutual benefit, then it should be handled in the same manner as a "Contract."
Award -- a generalized term used for all sponsored program funds. An award may be further classified as being a contract, cooperative agreement, fixed price contract, grant, grant-in-aid, or a various fund. The award document will generally indicate the type of award received.
Budget Revisions -- as a project gets underway, a specific budget category may run out of money. An alert PI/PD can contact Office of Research and Sponsored Programs in advance and request a budget revision before a crisis occurs. Depending on the grantor's internal procedures, it may be possible for the PI/PD to receive authorization to move money between categories without changing the amount of the grant and without creating new budget categories. Otherwise, the PI/PD should project the various types of expenses for the remaining life of the grant and request a budget revision from the grantor which includes a justification for the request. In any event, it is essential that the budget revision be authorized in writing by the grantor.
Closeout -- the process by which a federal awarding agency determines that all applicable administrative actions and all required work of the award have been completed by the recipient and federal awarding agency.
Cost Overage -- those costs expended by the grantee which are not included in the original grant proposal and, therefore, exceed allotted spending. Cost overages must be corrected prior to the closeout of an award. The options to correct these overages are as follows:
- Transfer expenditures to an award that has shared the same expenses, but has not received a fair allocation of cost.
- Ask your Department Head or Dean for assistance in covering the cost overrun.
- Ask the agency for additional funding to cover the overage (a possible but unusual occurrence).
Cost Reimbursable -- when a grant award is of this type, the sponsor reimburses the grantee only as allowable costs are incurred by the department. Documentation of expenses subject to audit, then, is necessary on cost reimbursable grants. The unspent sponsor funding authorization remaining after the closing date of the project reverts to the sponsor. In the unusual instance that a sponsor advances payment to the University, a refund of the unspent advance must be issued to the sponsor.
Cost Sharing -- when the University bears a portion of the cost of a sponsored project, this act is considered cost sharing. Essentially synonymous with matching, cost sharing occurs when an expense specifically benefits a sponsored project but that expense is not wholly charged to the project’s sponsor; rather, the grantee agrees to cover (in part) the cost—to share in the cost of the project. Cost sharing serves two purposes: to show the commitment by the receiving agency and to increase the amount of financial resources available to the sponsored project.
Date of Completion -- the date on which all work under an award is completed or the date on the award document, or any supplement or amendment thereto, on which external funding ends.
Deliverables -- those goods and/or services that the grantee has promised to the sponsor. All deliverables required by the awarding agencies should be completed in a timely manner. Failure to adhere to the time schedule required by the granting agency usually results in a suspension of all payments from the awarding agency. All deliverables schedule changes must be approved by the awarding agency and the Office of Sponsored Programs.
Disallowed Costs -- those charges to an award that the awarding agency determines to be unallowable in accordance with the applicable federal cost principles or other terms and conditions contained in the award.
Discretionary Funds -- a type of unrestricted fund which can be expended for any lawful purpose.
Educational and General (E&G) Funds -- money that supports the basic functions of higher education institutions' instruction, research, and public service. E&G funds provide the means for these three functions which include all supporting activities such as academic support, student services, institutional support, as well as plant operation and maintenance. Revenues for these funds are generated from state appropriations; tuition and fees; gifts, grants, and reimbursements; and other revolving fund sources.
Encumbrance -- funds committed to the purchase of a specific good or service but not yet expended. The PI/PD or his/her designee should periodically monitor encumbrances and communicate any problems with the appropriate department (such as Purchasing or Accounts Payables). All encumbrances to be liquidated should be cleared within 30 days of the award expiration date to ensure their inclusion on the final financial report. All open commitments have to be liquidated or closed in order to close an account. The PI/PD should continue to monitor all accounts, whether they are past the end date or not, to ensure that commitments are properly closed out.
F&A Costs -- “Facilities and Administrative” Costs, is also known as indirect costs. Although not readily identifiable with a particular project or activity, F&A costs are real and necessary for the University’s general operations including support of sponsored projects. Expenses such as facility maintenance, depreciation, utility costs, library expenses, research and sponsored programs administration, and general department administration are covered through F&A costs. Because F&A costs cannot be readily itemized for specific projects, these costs are assessed using a fixed percentage rate determined by the sponsor and the university.
Current F & A Rates
Federal Share -- regarding real property, equipment, or supplies; that percentage of the property's acquisition costs and any improvement expenditures paid for using federal funds.
Fellowships -- payments to or on behalf of individuals for financing and supporting graduate education (e.g., tuition and cash stipends).
Fiscal Year (FY) -- the twelve month period which determines an entity’s financial year, often stated as FY. UNI’s fiscal year is July 1 through June 30th. FY10 is the fiscal year starting July 1, 2009 and ending June 30, 2010. The Federal Fiscal Year (FFY) is October 1 through September 30.
Fixed Assets -- property such as land, buildings, machinery, and similar equipment that is retained and used over an extended period.
Fixed Costs -- service charges set and subject to change primarily by external agencies, such as insurance premiums, pension premiums, utility charges, memberships, and other similar service costs.
Fixed Price Agreement -- an award in which the recipient promises to deliver or perform the work within a specific period at a fixed price agreed upon in advance, and payable regardless of the actual costs incurred. If sponsor funds remain after the closing date of a project, the grantee is not obligated to return the funds. With a fixed price award, the University is paid in one of three ways:
- Unsolicited payments are initiated by the sponsor and paid to UNI based on a predetermined deliverables schedule
- payments are received based on an invoice submitted to the sponsor by RSP upon meeting a requirement of the award (completion of a deliverable, task, or milestone)
- payments in advance received from the sponsor at the beginning of award. UNI must return funds if deliverables not met.
Funding Period -- the period of time when external funding is available for obligation by the recipient.
Gift -- to qualify as a gift to the institution, extramural support must meet all of the following criteria:
- Nature of the support is not from the constraining force of any moral or legal duty or from the incentive of anticipated benefits of an economic nature.
- Detailed reports are not required--neither periodic or final, nor fiscal or technical. (The principal investigator may provide the donor with a brief statement that the expenditures were in accord with the intent of the gift)
- No provisions (delays, advance notice) are imposed by the donor concerning publication of data and information derived from the activity
- Rights to any patent/copyright are not retained by the donor.
Grant-- a grant represents a mutual joining of interests on the part of the grantor and grantee institution in the pursuit of common objectives. In this relationship, the grantee institution assumes with the grantor the obligation to act in the public interest in achieving a common purpose. This is a relationship of trust which imposes upon the grantee institution the responsibility to assume that the grant funds are used for the purpose for which they were awarded, and to exercise the same probity and prudence in their expenditure that is extended to the use of the grantee institution's own funds. Note: A grant is distinguished from a contract in that a grant does not constitute the procurement of goods and services for the direct benefit of the sponsor. The grant is a unilateral act. The primary concern in the grant award is the identification of public value to be gained through the grant and the capability of the grantee to advance such value. It is important to note this distinction since the legal implications associated with contracts are quite different from those associated with grants.
Maintenance and Operations (M&O) Budget -- Includes consumable goods (i.e., supplies and equipment), services, rental and contractual items, travel, and operating capital.
Object codes -- expenditure and revenue object codes are required for all financial transaction processed through the University. The consistent utilization of the object code list, for budgeting as well as processing expenditures, will enhance the integrity of the financial data.
Program Income -- gross income earned by the University that is either directly generated by the sponsored project or earned as a result of a sponsored project during the period of time the sponsored project is active. Federal policy for program income is set forth in the Office of Management and Budget (OMB) Circular No. A-110, Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations and applies to federal, federal pass through, and other sponsor-funded programs. Examples of program income are 1) Registration fees charged to participants for a workshop or conference funded under a sponsored award; 2) services provided under an award such as selling the test performed by a program project core laboratory to outside groups; and 3) rental or usage fees such as those earned from fees charged for use of computer or laboratory equipment purchased with sponsored award funds.
Project Costs -- all allowable costs as set forth in the applicable federal cost principles, are actually incurred by a recipient, and may include the value of the contributions made by third parties in accomplishing the objectives of the award during the project period.
Project period -- the timeframe during which performance of the sponsored project begins and ends and allowable costs may be incurred.
Provisional Account Authorization Form -- a university account which is set up prior to receiving the sponsor’s grant or contract award document. A Project Director's Department Head and/or Dean must commit to covering all unreimbursed costs to the account.
Restricted Funds -- gifts, grants, contracts, and endowments received from local, state, federal, and private sources and used only as specified by the donor.
Recipient -- generally referred to as the “grantee”; describes an organization receiving financial assistance directly from federal awarding agencies to carry out a project or program.
Scholarships -- expenditures to individuals for financing and supporting undergraduate education.
Subaward -- a pass-through award of financial assistance in the form of money, or property in lieu of money, made under a prime award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient.
Subrecipient -- the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided.
State Appropriations -- annual legislative allotment from the state's general revenue fund. The operating budget portion must be spent during the fiscal year for which it is appropriated while the capital budget portion may be spent over several years.
Unobligated Balance -- the portion of the funds authorized by the federal awarding agency that has not been expended or committed by the recipient and is determined by deducting the cumulative expenditure obligations from the cumulative award amount authorized.
Unrecovered Indirect Costs -- now referred to as F&A (Facilities and Administrative); the difference between the amount of F&A dollars awarded and the amount that could have been awarded under the recipient's approved federally negotiated indirect cost rate agreement.
Unrestricted Funds -- monetary resources that are not subject to specific external guidelines or regulations and may be expended for any activities that promote the instruction, research, and public service missions of the University. See also discretionary funds