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If MSU receives funds from an external agency which is limiting the usage of these funds, requiring MSU to account for the funds separately in MSU’s finance system, and requiring MSU to provide financial status reports; then the funds are considered restricted.

Restricted simply means that MSU does not have the freedom to spend the funds as desired, but instead must comply with the agency and federal requirements. If these requirements are NOT met, MSU could face severe consequences.
Accounting and Budgetary Control’s objective is to ensure administrative and financial matters are completed according to MSU’s policies and procedures. We provide financial services to faculty and administrative staff dealing with sponsored programs. 
  • Establishes new grants/contracts accounts
  • Enforces policies and procedures consistent with federal, state, sponsor, and university regulations
  • Prepares and submits financial reports and invoices
  • Makes deposits for restricted funds
  • Closes out restricted projects
The Project Director is responsible, on behalf of the University, for sound technical, fiscal, and administrative management of a project or program in accordance with BOTH University and sponsor requirements. 
  • Ensures that all expenditures and any adjustments to expenditures, are reasonable, allowable, allocable, timely and non-personal
  • Submits adequate documentation with all requests for payment, including reimbursements to the home or other departments
  • Ensures compliance with required cost sharing commitments, and provides timely documentation of all cost-sharing
  • Monitors and maintains the committed level of effort on behalf of the restricted project
  • Controls the project’s budget, prevents any overdrafts and initiates any necessary transfers
  • Performs periodic review of charges to the project, as reflected on WebAdvisor, and notify A&BC of any discrepancies
  • Prepares all progress and narrative reports as required by the sponsor, and submits such according to the time schedule outlined
  • Provides assistance to the restricted grants/contracts staff as needed and requested; and prevents conflict of interest and/or conflicts of commitment
To ensure each Morehead State University (MSU) project director has a successful grant or contract, the following offices work closely together in a collaborative award effort. Each office provides MSU's faculty and staff support services to implement their grant or contract by providing guidance, training, and/or other types of specialized assistance. 

Office of Research & Sponsored Programs
The Office of Research & Sponsored Programs is the administrative unit responsible for reviewing grant and contract award notifications to ensure compliance with University policies and external funding source guidelines; negotiating contract obligations and budgets; revising budgets; securing administrative signatures; transmitting contracts to funding sources; and notifying the Office of Accounting and Financial Services of funded contracts and grants by forwarding copies of awards and budgets.

Office of Accounting and Financial Services
The Office of Accounting and Financial Services (AFS) is the fiscal unit responsible for the support of financial transactions and reporting of all restricted grants and contracts. Its objective is to ensure routine financial matters are 
completed in accordance with MSU's policies and procedures. AFS's restricted grants/contracts staff reviews proposals for financial accuracy; establishes a newly awarded grant/contract account on MSU's general ledger; prepares and submits all financial reports or invoices in accordance with agency requirements; maintains the time and effort reporting system; pays all financial transactions; deposits all monies received; develops the fringe benefits rates; negotiates the F&A or indirect cost rate; and produces and distributes the Policies and Procedures Manual for Grants and Contracts.

Office of Procurement Services
The Office of Procurement Services is responsible for providing quality goods and services in a legal, timely and cost-effective manner. This unit ensures the guidelines are followed per federal, state and local laws and policies including the Kentucky Model Procurement Code which is maintained and distributed through the policies and procedures manuals accessible via the Web. The establishment of an approval list on all awarded grants/contracts accounts, approval of purchase orders and guidelines for the use and submittal of all personal services contracts are the responsibility of this office. 

Office of Human Resources
The Office of Human Resources (OHR) is responsible for overseeing the hiring process for all positions. You can view policies by accessing The Personnel Policy Manual. MSU has procedures established for filling positions depending on the types of appointments being made. MSU is committed to recruit, employ, retain, and promote in compliance with the principles of equal employment opportunity and affirmative action. The University follows a program of broad, comprehensive, open recruitment for full-time positions. All positions are recruited and processed through the OHR in accordance with the Affirmative Action Plan. Copies are available in the OHR, 101 Howell-McDowell. There are also requirements established for hiring part-time/temporary positions. The procedures for hiring both full-time and temporary/part-time positions are established based on the University's mission and to comply with federal and state laws. 

Payroll Office
The Payroll Office is responsible for the processing of all payments to employees as a direct result of employment at MSU in the most accurate, efficient, and timely manner possible, while maintaining compliance with all federal, state, and local regulations. The Payroll Office disburses payments upon receipt of an approved hiring document. All employees are paid on a semimonthly payroll and require the completion of a Web Time Entry Supervisory Approval form on file in the Payroll Office for submission of hours each pay period. All payments should be disbursed over the span of the individual's actual work period. Required documents for pay disbursements are federal W-4, state K-4, and when applicable, chosen retirement options and insurance options.
Cost Sharing (aka Match, In-Kind) is that portion of a restricted grant/contract related to cost that is contributed by parties other than the funding agency and not directly charged to the grant/contract account. Cost share can be actual dollars or in-kind contributions to support a project. Cost sharing represents a legal commitment by the University to provide resources to a restricted grant/contract agreement and is subject to audit. Federal regulations require all costs associated with a particular externally funded grant/contract must be properly documented. 

Three types of cost sharing are as follows: 
  • Mandatory Cost Sharing is cost sharing that is part of the proposal budget and is mandated by the sponsoring agency. This can be in the form of a specified dollar amount, a certain percentage of total costs, or in-kind. 
  • Voluntary Committed Cost Sharing is cost sharing that the University contributes to a project on its own initiative and is included in the proposal budget or award. Once committed, this amount becomes a legal obligation on the part of the University.
  • Voluntary Uncommitted Cost Sharing is cost sharing that is not committed or budgeted for in a sponsored agreement. 
Any of the aforementioned types of cost sharing should only be provided when required by the sponsor. Because cost sharing typically involves use of departmental and/or college funds, department heads and/or deans must approve cost share in proposals and may impose limits on the amount of cost sharing. When cost sharing or matching is accepted by the sponsor, it becomes a legal commitment by the University. Throughout the term of the project, the Project Director must maintain sufficient documentation to substantiate the actual cost sharing contribution in compliance with governmental regulations. When cost sharing expenditures are less than that agreed in the award document, a loss or return of project funds to the sponsor may result. In these instances, the project director’s department and/or college are required to cover the deficit. 
Cost Sharing must meet the following criteria: 
  • Verifiable from the departments accounting records, including appropriate documentation for in-kind cost sharing
  • Necessary and reasonable for proper and efficient accomplishment of project objectives
  • Represents types of charges that would be allowable under the applicable cost principles and institutional policy
  • Provided for in the approved budget when required by the agency
  • Expended during the sponsored agreement project period
  • Not paid by the federal government under another agreement
  • Not included as contributions for any other sponsored agreement
Any employee (full time or part time) paid from a grant or listed under cost share of a grant must complete a time and effort report.
OMB Circular A-21, Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements with Educational Institutions outlines the regulations governing time and effort reporting and the verification of salary and wage distributions. Specifically, OMB Circular A-21, Section (J)(10)(c)(2)(b) requires Time and Effort Reports to be completed to provide after the fact verification of the salary charged to sponsored projects.
  • Exempt employees (salaried) are to complete a report for each of the 4 academic terms. 
  • Non-exempt (hourly) employees are to complete a report for each calendar month. 
  • Cost share or in-kind employees must submit reports monthly regardless of employment status. 
All reports are due within 10 days following the close of the applicable period.
All deposits need to be given to or arrangements for pick up need to be made by the restricted grants/contracts staff in Accounting and Financial Services. We will assure the funds are deposited correctly into the appropriate revenue account(s) or line item and the budget adjusted (if applicable).

Facilities and Administrative (F&A), is commonly known as “indirect costs”. Associated with every university unit's operation are realistic costs which are not directly charged to that department – such as insurance, utilities, general administrative units, etc. MSU negotiates reimbursement of these costs via a formal rate with the US Department of Health and Human Services. However, some funding agencies do no permit MSU to charge an F&A rate or will not allow the full amount. In those cases, Research & Sponsored Programs makes the appropriate decision to waive or reduce the rate as part of the negotiation process. 

The Facilities and Administrative Costs object code cannot be “spent” from, rather Accounting and Financial Services does an accounting adjustment periodically and Research & Sponsored Programs distributes the money to the appropriate departments during the Fall semester.
Yes. MSU's internal auditor has complete access to audit any university-related unit or program. Every year our external auditors are required to select and audit in detail certain restricted units. All state and/or federal authorities have the right to audit, such as the Office of Inspector General. Many of the awarding agencies themselves will conduct site reviews or audits. Therefore, it is extremely important everyone involved follows all policies and procedures consistently without regard to the corresponding dollar amounts.
Just because there are funds in a restricted grant/contract, that is no reason to buy. The expenses on the grant must be necessary to carry out the mission or scope of work of the grant; the expenses should be in the proposed budget and you must be able to show relation to performance or administration of the project. 

All expenses must be ALLOWABLE:
  • Reasonable 
  • Necessary 
  • Timely 
  • Non-personal 
  • Incurred between the beginning and ending date of the project. 
  • Services must have been performed between the beginning and ending date of the project
  • Goods must have been received between the beginning and ending date of the project
Personnel Action Request (PAR) 
If an employee/employer relationship can be established a PAR needs to be initiated before the employee is hired. An employee can be hired via Novus HR, work-flow, or a paper PAR. Contact the Office of Human Resources for further information. 

Personal Services Contract (PSC) 
For individuals who are non-employees, consultants, or professional service (catering, speakers, entertainment, etc.). Contact the Office of Support Services for further information.

Check Request
For individuals who are not MSU employees and a subcontract is on file, submit a Check Request to Accounting & Budgetary Control. A Federal Form 1099 will be issued to the individual if total payments are over $600. Contact the Office of Research & Sponsored Programs for further information.
All work-study awards are made in conjunction with the Office of Financial Aid
  • Do NOT work students before they have been approved by the Office of Financial Aid, Office of Human Resources, Office of Accounting and Budgetary Control, and Payroll office.
All graduate assistant awards are made in conjunction with the Graduate Office
  • Do NOT work graduate students before they have been approved by the Graduate Office, Department, Office of Human Resources, Office of Accounting and Budgetary Control, and Payroll Office.
Procurement Credit Card 
Pro-Cards are issued by the Office of Procurement Services. Please change the account number associated with pro-cards each time your account number changes. 
  • Limited to $500 per day per vendor. 
  • Limited to a maximum of 80% of current budget.

Purchase Requisition 
MSU contracts with specific vendors for particular items yielding significant cost saving. If you did not place an order through the Office of Procurement Services but have a company’s invoice to pay, the order is still entered online.
It is against university policy to have “red” or negative accounts. If an object code is negative in a grant/contract account a budget transfer must be initiated by the Project Director. Accounting & Financial Services collects payment on actual expenditures, up to the limit of the budget. Once a deficit occurs, no further expenditures will be paid until corrective action has been taken. Because overcharges cannot be billed to the sponsor, the principal investigator must ensure the account does not exceed budget. Any account deficit must be corrected before A&BC will process additional charges and if it is not corrected within 90 days, the deficit will be transferred to the departmental overhead account.

At the time a new grant or contract is awarded, Accounting and Financial Services records the initial operating budget on MSU’s G/L system, excluding any expenses the federal government or funding agency has identified as unallowable. This budget should agree both with the amounts supplied to the funding agency and those internally developed jointly by the PI and Research & Sponsored Programs. Since this is just an estimate of what the PI feels it will cost to provide the service or to abide by other terms of the contract, in the majority of cases, the budget will likely be amended before the project is complete.

Before initiating a transfer, the PI must have the approval of the funding agency to move funds from one line item to another. Many agencies give the PI written authority to make decisions regarding the project’s costing and waive the prior approval requirement. If the agency does not provide the PI with this waiver, the PI must obtain proper authorization prior to initiating a transfer. The PI is responsible for the allowability of all budget transfers whether they be minor or major. The PI should routinely monitor fund availability on WebAdvisor so as to anticipate necessary transfers, prevent overdrafts, and control spending. The PI should be able to provide written justification for the transfer. Budget transfers are only permitted between object codes within the same project. Funds cannot be transferred between two or more restricted accounts, or between an unrestricted account and a restricted account. The object code 5171870 “Facilities & Administrative Costs” cannot be re-budgeted without approval from Accounting and Financial Services.
  • All transfers must be allowed by the funding agency. 
  • All transfers must be within the same FUND and UNIT. 
  • Transfers cannot credit or decrease a line item more than what remains. 
  • Use the On-Campus Transaction form for budget transfers (PLEASE MARK - BUDGET ADJUSTMENT). 
  • Credit the object code you are taking money FROM.
  • Debit the object code the money is going TO.
  • Membership fees (5141100) 
  • Registration fees (5171200) 
  • External Postage (5171200) 
  • Stipends (5145500) 
  • Professional Dues (5145400) 
  • Advertisements (5171390 or 5171400) 
  • Certain Reimbursements to Individuals
To bring remaining budgeted funds forward is a time-consuming manual process. Funds cannot be brought forward until after MSU's official cut-off for old year transactions—meaning all expenses including salaries and all accounting adjustments must be done before funds can be carried forward to the new year. Budgets will be brought forward beginning July 20 (after payroll and all adjustments have been made). All budgets will be made available by the end of August. Please anticipate this delay.
Yes, but it is strongly discouraged and should be kept to a minimum. 

To get a reimbursement, prepare a Check Request payable to yourself and attach all original receipts. 
  • MSU does not pay sales tax. 
  • If your project does not have sufficient funds to cover the request, it will be denied. 
  • MSU does not pay late fees or interest charged on personal credit cards. 
  • If you do not submit check requests in a timely manner, it will be denied.
In order to free up the funds within the unrestricted or departmental account, the Project Director must move the expense from the unrestricted account to the restricted or grant/contract account. This is referred to as a Cost Transfer.

Things to remember when dealing with Cost Transfers according to OMB CIRCULAR A-21: 
  • Costs allocable to a particular sponsored agreement may not be shifted to another sponsored agreement in order to meet deficiencies, to avoid restrictions, or for convenience sake. 
  • There must be proper justification regarding why the cost was not initiated from the restricted account. 
  • Cost Transfers should not be frequent in nature and should be remedied in a timely manner. 
How to initiate a Cost Transfer:
  • Initiate an On-Campus Transaction form, debiting the account number which should be paying for the expense and crediting the account number that was originally charged. 
  • Enter a description including the vendor name and voucher number. Attach documentation. 
  • Explain why your department purchased items instead of the restricted account. 
  • Please initiate within 90 DAYS OF ORIGINAL TRANSACTION.
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