Re: Timing of Purchases Baumann, John 23 Jan 2005 23:17 EST

I would address the question slightly differently -- We are very
hesitant to approve the purchase of equipment or even certain supplies
at the end of a grant.  In most cases, how could the equipment be used
in support of the funded scope of work if the project period is ending
or has ended -- assuming there was not a competitive continuation in the
pipeline or something?  It has been my experience, as well, that most
funding sources look at this with something of a wary eye and of
questionable consistency with the letter and/or spirit of the award.
While there are of course exceptions in which case the purchases are
appropriate -- in too many cases it could simply be an interest in
spending whatever funds remain without due attention to the terms and
conditions of an award. .

John

John R. Baumann, Ph.D.
Associate Vice Chancellor for Research
Director, Office of Research Services
5100 Rockhill Road  (US Postal Service)
5211 Rockhill Road (Courier Service)
Kansas City, MO 64110

816.235.1303 (v)
816.235.6532 (f)

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On
Behalf Of Ted Mordhorst
Sent: Thursday, January 20, 2005 9:21 AM
To: xxxxxx@HRINET.ORG
Subject: Re: [RESADM-L] Timing of Purchases

In cases like this I invoke the "reasonable" and "allocable" principals
from
OMB Circular A-21.  Is it reasonable to state that the supplies and
equipment will be used to further the work under the sponsored
agreement?
In most situations the answer is probably not, however for some federal
agencies the "end date" is often not really an end date but a milestone
date
or end of a funding period.  Most federal agencies allow for the
inclusion
of "unliquidated obligations" in the award expenditures.  The
definitions of
the term unliquidated obligations that I have seen do not include a
statement that the goods are received, only that the obligation is
incurred
prior to the expiration date of the award.  In the NSF GPM  602.3
Post-Expiration Costs section it states:
"NSF funds may not be expended subsequent to the expiration date of the
grant except to liquidate valid commitments that were made on or before
the
expiration date. (See GPM 452, "Final Disbursement Reporting," and GPM
617,
"Publication, Documentation and Dissemination".) For example, commitment
of
project funds is valid when specialized (research) equipment is ordered
well
in advance of the expiration date but where, due to unusual or
unforeseen
circumstances, delivery of such equipment is delayed beyond the
expiration
date. The costs of equipment ordered after the expiration date, however,
may
not be charged to the project."

In discussing this subject with the DHHS OIG I learned that they do not
consider the end of a funding period, (non-competing or competing) to be
the
expiration date of the grant.  Therefore they would consider the date
the
"obligation" was incurred rather than the date received to be the
determining factor in allowability for a funding period.  In other
words, if
an item was ordered prior to the end of a funding period but the bill is
not
paid until the following funding period it is an unliquidated obligation
to
the prior funding period without consideration to the receipt date.
They do
consider the receipt date of items at the terminal end of the grant and
would disallow items received after that date.  So if there is a
question of
the award being continued on a competing renewal it is advisable that
expenditures be treated as if it is the terminal end of the grant.

I hope this helps.  Give me a call if you would like to discuss this
further.

Ted Mordhorst
Assistant Director for Compliance
Grant and Contract Accounting
University of Washington
3905 University Way NE
Seattle, WA 98105-6692
206-616-8678
xxxxxx@u.washington.edu

----- Original Message -----
From: "Debra Leonard" <xxxxxx@KENT.EDU>
To: <xxxxxx@HRINET.ORG>
Sent: Thursday, January 20, 2005 6:07 AM
Subject: [RESADM-L] Timing of Purchases

>I was wondering if other universities have a policy concerning the
timing
> of purchasing supplies and equipment on a grant.  What do you do if a
PI
> orders supplies and equipment before the grant end date, but it is not
> delivered until after the grant ends.  If the equipment is received
after
> the grant end date, would you charge the equipment to the department?
>
> Thanks for any input you can provide.
>
> Debra Leonard
> Mgr. Accounting
> Kent State University
> Grants Accounting
> phone #330-672-0988
> fax #330-672-8328
> e-mail:  xxxxxx@kent.edu
>
>
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