Getting Started

This is an overview of the financial administration of grants after they have been awarded.  More detailed information is available through Sponsored Programs, Grants Accounting, and applicable departments such as Payroll, HR, Procurement, and Accounts Payable.

Roles and Responsibilities

Principal Investigator, Project Director, or Financial Manager

  • Know, understand, and follow terms and conditions of the award
  • Approve all expenditures to grant, cost share, and program income indexes
  • Review monthly Flashline financial statements
    • Are the expenses accurate
    • Are the expenses within the approved budget
    • Is anything missing?
  • Certify Effort Reports
  • Keep organized financial records on hand for audit purposes


  • Ensure that university policies and procedures are followed as grant funds are expended
  • Monitor cost share and program income
    • Manage funding sources to cover cost share commitments
    • Initiate budget transfers for split funded cost share
    • ​Process deposits and expend program income funds
  • Review and approve personnel appointments, check requests, p-card reconciliations, cost transfers, etc.

Grants Accounting

  • Pre-review non labor expenses (is it allowable and budgeted)
  • Process cost transfers, salary distribution revisions, and journal entries
  • Approve cost transfers (including salary transfers) older than 90 days
  • Monitor cost share and program income
  • Prepare agency billings (invoices) and reports

Sponsored Programs

  • Review personnel forms prior to submission upon request
  • Develop spending plans and budget revisions
  • Prepare and administer subcontracts and subawards

Internal Audit

  • Evaluate internal controls and integrity of financial information
  • Determine compliance with policies, procedures, laws, and regulations

Restricted Funds

Grant funds are awarded to the university for a specific purpose.  They have restrictions that limit how they can be spent.  Restrictions originate from the granting agency, state or federal regulations, and university policies.  Grants are sometimes referred to collectively as the "Restricted Fund."

Indexes associated with grants follow a numbering convention with the university Chart of Accounts:

  • Grant and Program Income indexes start with the number 4
  • Cost Share indexes start with the letter C

Anyone working with grant projects is expected to conduct business with the highest ethical standards.  All charges allocated to grant related indexes MUST BE:

  • necessary to the project
  • reasonable, not exceeding what a prudent person would spend
  • allowable, within budget limits and compliant with regulations/policies
  • allocable, expense is easy to identify and distribute accurately

Financial Life Cycle of a Grant

  1. Index established for expenditures
  2. Applicable expenditures are charged directly to grant, cost share, program income indexes
  3. Monthly review of all project indexes (grant, cost share, and/or program income) by Project Director and responsible department
    • Are expenses correct, do they belong to the project, are they within the budget?
    • Is anything missing?
    • Are commitments being met?
  4. Corrections are made promptly within 90 days of the original expense
  5. During the final three months, the Project Director and responsible department conducts a thorough review and corrects errors BEFORE final reports and/or invoices are due.
  6. Final invoice and/or reports are generated by Grants Accounting
  7. Project indexes are terminated

Direct Costs

Direct costs are expenses that can be:

  • Isolated in Banner®
  • Identified with a particular project
  • Allocated to the project index with ease and accuracy

All direct costs allocated to restricted funds must be allowable, allocable, reasonable, and necessary to the project.


Conforms to:

  • university policy
  • terms and conditions of the agreement
  • specific agency guidelines
  • federal regulations
  • provides benefit to the project
  • incurred within the project period
  • if split between projects, the allocation method is sound and clearly documented
  • would withstand external review by a prudent individual
  • cannot advance the scope of work without it

Direct charges should always be charged directly to the grant, cost share, or program income index.  Charging project expenses to another index with the intention of moving them to the project later may indicate insufficient financial oversight and should be avoided.

Direct Charge Methods

  • Appointment Forms
  • P-Card allocations
  • Payment Forms
  • Purchase Orders (invoices paid without a check request)
  • Expense Reimbursements
  • Interdepartmental Charges initiated by auxiliary units
    • All other IDCs are generally not allowable to grants

Proper Justification/Documentation

Supporting documentation should be concise and easy to understand but provide enough detail to show the expense was necessary to the project.  Justifications should answer the following questions.

Goods and Service
  1. What was purchased?  Include a brief description of the items or services purchased.
  2. How were the supplies or services used on the project?  Why were they needed?
  1. Why did you travel?  When providing conference or meeting titles, do not use abbreviations or acronyms.
  2. How did the travel benefit the project?

Splitting Charges Between Grants

Additional justification is needed when charges are split between two or more grant projects.  The department must keep documentation on file to support the method used to determine the amount allocated to each project.  The documentation should answer the following questions.

  1. How much was charged to each grant?
  2. How were the amounts decided?

Financial Monitoring

The university provides monthly financial reports through Flashline.  It is expected that reports are reviewed by the Project Director and responsible department on a regular basis to ensure that:

  1. Expenditures posted pertain to the project
  2. Banner® reflects the correct amount
  3. Missing charges are identified and investigated
  4. Errors are promptly resolved within 90 days
  5. Spend rate is reasonable and reflects progress on the project

Correcting Expenses

Sometimes despite best efforts, mistakes happen.  Monthly financial reviews help ensure errors are discovered and corrected in a timely manner, specifically within 90 days of the original expense.

Correction Methods

  • Cost Transfer Workflow (to move non-labor expenses from one index to another)
  • Salary Redistribution Workflow (to move labor, salary, wages and associated benefits from one index to another)

Proper Justification and Documentation

It is important to maintain supporting documentation that is concise but also easy to understand.  Reasons such as "correcting error" or "to reflect effort" are not acceptable.  Likewise, transfers to use up funds or to zero out a project index are not allowable.  Justifications for transfers should answer the following questions:

Cost Transfers of Non-Salary Expenditures
  1. What was purchased?  Provide a description of the items or services purchased.
  2. How were the supplies or services used on the project?  Why were they needed?
Cost Transfers of Salary Expenditures
  1. What did the person do on the project?  What services are being compensated?
  2. How did these services benefit the project?

Over 90 Days

Cost transfers of salary or non-salary charges received more than 90 days after the original charge are considered late and will only be approved for extenuating circumstances. Additional justification will be necessary to demonstrate an extremely strong case as to why they should be approved. The justification for late transfers must address same points as listed above as well as

  1. How did the error occur?  Explain the circumstances under which the incorrect allocation occurred.
  2. Why was the incorrect allocation not discovered in a timely manner?
  3. What is being done to prevent such delays in the future?  Be specific.

HHS Policy Statement Regarding Late Transfers

The Policy Statement from Department of Health and Human Services prohibits late transfers. It is extremely important to monitor expenditures on sponsored projects from agencies that fall under HHS on a monthly basis to ensure transfers are requested before the 90-day limit expires. Requests to move expenditures to sponsored projects funded by any HHS division, including the National Institutes of Health (NIH) initiated after the 90-day period has elapsed will not be approved. Disallowed expenditures will be transferred to the responsible department.

Close Out

As a project approaches its end date, it should be monitored closely to facilitate the successful close out.  Closing action may include:

  • Preparation of final narrative or technical reports
  • Verification that personnel appointments do not extend beyond the end date
  • Review cost share to ensure obligations, if any, are met
  • Review encumbrances to expedite payment, liquidation, or transfer to department if expense will not post prior to end date

Purchases Near the End of a Project

All charges to a project must be allowable, allocable, reasonable, and necessary to conduct grant related activities.  Purchases may not be made simply to use up the remaining balances at the end of a project.  Purchases at the end of a grant may require additional explanation to justify their benefit to the project, especially

  • Equipment purchased in the last 6 months
  • Supplies purchased in the last 30 days

Terminating Indexes

Once a project has been finalized and all financial activity is complete, Grants Accounting will terminate all indexes associated with the project in the university’s financial system. Financial data will remain available through Flashline Finance Reports and Banner Admin Pages.

Record Retention

Original records pertaining to a sponsored project must be retained for 6 years following the end date. Please note this is longer than the standard university retention schedule of 5 years. Original project records commonly held at the department level include:

  • Pcard receipts with PI approval
  • Expense reimbursement receipts with PI approval
  • Correspondence (letters, emails, etc.)