4. The Rules on Spending
Spending money for sponsored programs follows three basic rules established by the federal government. These rules are almost universally adopted by all public and private sponsoring agencies. For this reason, the Foundation applies these guidelines when specific guidance in the grant or contract is not available. Short explanations of the three rules are as follows (click on each term for full descriptions drawn from OMB A-21):
Allocability – the cost is properly allocated to a sponsored program (or across several programs) in proportion to the benefit received by the program.
Allowability – the cost is allocable, reasonable, consistently charged, and conform to any limitations or exclusions set forth in the award agreement or applicable rules and regulations.
Reasonableness – the nature and amount of the cost is one that a reasonably prudent person would consider necessary in the performance of the sponsored program.
The CSU and federal government has published guidance on specific items of cost:
Failure to mention a particular item of cost is not intended to imply that it is either allowable or unallowable; rather, determination as to allowability in each case should be based on the treatment provided for similar or related items of cost. In case of a discrepancy between the provisions of a specific sponsored agreement and the specific guidance above, the agreement should govern.
IMPORTANT: If you have any doubts or questions about the appropriateness of a proposed expenditure, do not incur the expense until you have confirmed with Foundation Sponsored Research & Programs that you should proceed. Any transaction you personally authorize that is disallowed becomes a personal liability for you and/or your college as the foundation will not be able to reimburse or pay for these charges.
Regardless of the sponsor or award, Foundation prior written approval should be obtained before incurring any of the following proposed expenditures:
- Services (vendors, consultants, etc. The only exceptions are copying services like Kinko’s)
- Equipment (see definition)
- Computers (desktops, laptops, or netbooks)
- Renovation or Capital Expenditures (e.g. buildings or land)
- Participant Incentives, Stipends, Scholarships, Honoraria or other types of compensation
- Any expense not specifically included in your approved budget
- Travel (both domestic or international)
Prior approval is obtained by submitting the indicated form as follows:
Business Cards – In general, business cards should only be ordered for full-time Foundation staff whose job responsibilities require frequent interaction with third parties outside the University. The following requirements apply to all business cards ordered for sponsored programs:
- Official CSUEB Foundation business card format and logo must be used.
- Only your official CSUEB Foundation job title may appear on the card
- Affiliation with Foundation sponsored program must be clearly indicated.
Computers – Some sponsors have restrictions on using program funds to purchase computers since grantees are often expected to provide their own office equipment. All computer purchases (desktops, laptops, and netbooks) should have prior Foundation approval. Please refer to the Foundation Computer Purchasing Procedure for the steps necessary to purchase a computer. When obtaining quotes from University IT, please ensure that the quote does not include the cost of extended warranties that go beyond the current end date of your grant/contract – this is not a reasonable or allocable cost to the sponsored program.
Equipment – Any item meeting the definition of equipment must be approved by the Foundation using the Foundation Purchase Request Form process outlined below.
Food – The cost of meals at meetings and conferences, the primary purpose of which is the dissemination of technical information, are allowable if the cost of meetings or conferences are included in the approved budget.
Meal costs for other purposes or activities are not allowable unless specifically provided for in the sponsored agreement. Any meetings, conferences, events, or activities on-campus must comply with the campus catering policy. Any meeting, conferences, events, or activities on-campus which will cost $500 or more in prepared food or meals should get prior approval by submitting a Request to Spend Funds on Hospitality, Food and Beverage Form.
Furniture – Because furniture is considered fixed or permanent office equipment that a grantee typically provides as part of its facilities and administrative costs, any direct expenditure of program funds on furniture items should be approved by the Foundation using the Foundation Purchase Request process outlined below. “Furniture” includes, but is not limited to: tables, chairs, desks, cabinets, stands, and modular furniture.
Honoraria – Honoraria may be paid for lectures, speaking engagements, panel participation, manuscript review, workshops, and seminars if pre-approved by the sponsor. The honorarium is reportable and taxable if it exceeds the IRS minimum of $600 U.S. dollars per year (IRS Form 1099). Honoraria should not be used if the type of service offered is one that is normally paid (e.g. consulting services). For this reason, all proposed honoraria are reviewed by the Foundation to ensure compliance with sponsor restrictions.
Parking Permits – Single-day CSUEB parking permits are allowable expenses for guests invited to attend on-campus meetings, workshops, conventions, or events. “Guests” do not include CSUEB or Foundation faculty, staff, or students. Request for monthly or annual parking permits should be accompanied by a detailed justification and submitted for Foundation prior approval from the appropriate Foundation director.
Scholarships & Educational Stipends – In an effort to make the distribution of student scholarship funds consistent on campus, the process will now mirror the system used by the university. This is being done for two primary reasons. First, this will ensure student scholarship funds are applied directly to any tuition or other costs, with a check for the balance going to the student. Second, this will ensure the required student data is input into the university financial aid system to help comply with federal regulations regarding calculation of the students remaining university award. Principal Investigators will now submit the Scholarship Disbursement Request Form to Foundation SRP. Please review the entire SOP for Disbursements of Scholarships for more information on requesting a scholarship disbursement.
Stipends (Non-Educational) – Stipends may be awarded to individuals for services when it is difficult or impractical to determine the exact level of effort required to complete the service. An example of the appropriate use of stipends would include payment to a mentor for his/her time advising or mentoring a student grant participant. It may not be appropriate to award stipends in every circumstance since the IRS has strict rules prohibiting employers from paying “stipends” to individuals (who should in fact be employees) in order to avoid of payment of employment taxes. For this reason, all proposed stipends are reviewed by the Foundation to ensure no IRS rules are being broken.
Supplies - Only materials and supplies actually used for the performance of a sponsored agreement may be charged as direct costs. “Stockpiling”, or the purchase of supplies in large quantities which the program cannot reasonably use during the stated period of performance is not a permissible way to expend funds. Equipment, computers, and furniture are not considered supplies and should have prior Foundation approval.
The spending guidelines in Sections 4.a – 4d also apply to all accounts held by the Foundation (trust, institute, etc). However, because typical trust and institution accounts are not bound by approved budgets or grant/contract terms, there may be more flexibility on what the funds can be spent on, but the process for how they are spent remains the same as with sponsored programs.
Foundation Account Signature Authority: Only those individuals granted signature authority on a Foundation Signature Authorization Form may spend account funds in accordance with the spending procedures outlined below.
Only the PI, CI, or PC may authorize program purchases. Purchases should not be made from companies where PIs, project staff, or other CSUEB and/or CSUEB Foundation employees and/or their families have an economic interest. Such purchases may have the appearance of wrongdoing and should therefore be avoided. The Foundation should be notified of potential or apparent conflicts of interest in advance of any proposed purchase.
i. Noncommercial Goods & Services
Regardless of value, purchases of all noncommercial goods and services are initiated through submission of a Purchase Request Form. Before completing the Purchase Request Form, be sure to obtain formal written quotes from prospective contractors using the Request for Contractor Quotation form described below. The purchase request serves as the authorization to pay out of the account once the goods and services and the original invoice are received. The completed form and quote(s) are sent to the Foundation who reviews the purchase for allowability, sufficiency and approval of funds. If not approved, the form is returned to the originator with a written explanation. If approved, either a purchase order, independent contractor agreement, agreement for services, or subcontract will be issued by the Foundation depending on the type of purchase requested. Additional information may be requested after review of your request.
1. Written Quote(s) Required: Depending on the total value of the services requested (see instructions in Section 6 of Purchase Request Form), one, three, or no quotes are required. To obtain accurate quotes when requesting non-commercial services (e.g. consultants or contractors), please complete Section A and C of the Request for Contractor Quotation form (RFQ) and email the completed form to prospective contractors. The RFQ provides specific instructions to contractors regarding the budget, letter of commitment, and technical response that the Foundation needs in order to conduct price analysis and award a contract. Attach the formal quote received from the contractor to the Purchase Request Form.
2. Sample Statement of Work Template: The statement of work (SOW) is a very important component of any request for noncommercial services like consultants, contractors, or subawardees. The SOW sets forth the basis for acceptable contractor performance and payment. The Foundation highly recommends that the Foundation Sample Statement of Work Template be followed for all non-commercial services to ensure the requisite level of detail is provided. Other SOW formats may be used as long as the same level detail (or greater) is provided with performance milestones corresponding to scheduled payments.
Upon review of the purchase request, the Foundation may request additional information from the originator. Upon receipt of all additional information requested, the Foundation will process the purchase request if the expense is determined to be allowable. A purchase order, independent contractor agreement, or subcontract may be issued depending on the details of the particular request. Because noncommercial goods or services purchases typically take longer to process, the programs are advised to allow at least three to four weeks from the date of the purchase request. Extended negotiations with a vendor over terms or conditions may further extend this period.
ii. Commercial Goods & Services
Purchases of commercial goods & services below $1,000 (4 options)
Open Purchase Orders (OPO): If available, using OPOs for purchasing is the most convenient and cost-effective. OPOs are established by the Foundation with vendors for low value purchases. This allows the program to place individual orders below $1,000 on the Open Purchase Order. OPOs are available with Office Depot and the University Bookstore for most office supply purchases – please contact the Foundation Grants and Contracts Analyst to be added as a registered user. Other OPO’s with scientific supply vendors are also available.
Personal Cash or Credit: Program staff, if authorized in advance by the PI, can make individual purchases and be reimbursed afterward. Reimbursements for credit card expenses are issued directly to the cardholder only, not to the credit card company.
Invoice to Foundation: Program staff, if authorized in advance by the PI, can instruct vendors to bill the Foundation directly.
Foundation Purchase Order: In cases where the vendor requires a purchase order for a purchase below $1,000, submit a Purchase Request Form per the instructions directly below.
Purchases of commercial goods & services: $1,000 - $4,999 (Complete both steps below)
Foundation Purchase Request Form: The program needs to complete a Purchase Request Form for any purchases $1,000 or over. The purchase request serves as the authorization to pay out of the account once the goods and services and the original invoice are received. The completed form is sent to the Foundation who reviews the purchase for allowability, sufficiency and approval of funds. If not approved, the form is returned to the originator with a written explanation. If approved, the Grants Analyst creates a Purchase Order and fax or emails it to the vendor usually within five business days of the Foundation's receipt of the purchase request. Additional information may be requested after review of your request.
One Written Quote Required: Attach a written quote for the suggested vendor such as a faxed or emailed price quote and/or copies of published price lists. The information provided should include each vendor’s address and telephone number, name of individual who quoted price and the date of quotation if applicable, model number, name of manufacturer, size, color and any other pertinent specifications should be included to ensure purchase of the correct items. Descriptive literature or brochures should be attached if available. A purchase order request lacking a written quote will be returned for project personnel to obtain the required quotation. The Foundation may elect to obtain additional quotes to establish price reasonableness.
Purchases of commercial goods & services: $5,000 -$49,999 (complete all three steps below)
Complete Purchase Request Form
Three Quotes Required: Attach a minimum of three (3) quotes such as a faxed or emailed price quote and/or copies of published price lists. Project personnel should contact at least three alternate vendors for firm prices, terms and product availability. The information provided should include each vendor’s address and telephone number, name of individual who quoted price and the date of quotation if applicable, model number, name of manufacturer, size, color and any other pertinent specifications should be included to ensure purchase of the correct items. Descriptive literature or brochures should be attached if available. A purchase order request lacking quotations will be returned for project personnel to obtain the required quotations. The Foundation may elect to obtain additional quotes to establish price reasonableness.
If applicable, written justification is required if the vendor giving the lowest price quotation is not recommended to receive the order and for all “single source”, “sole source, and “no substitution” purchases. The justification should indicate what other products and vendors were examined and why they were rejected, what the unique performance characteristics of the specified products are, or why that particular product is essential to the conduct of the project.
All purchases $50,000 and above (complete all three steps below)
- Complete Purchase Request Form
- No Written Quotes Required. Depending on the good or service requested, the Foundation may either:
- Request three quotes as outlined above for purchases over $5,000; or
- Conduct an open competition by soliciting bids/quotes from qualified vendors. In an open competition, the Foundation will send out a Request for Proposal/Quotation (“RFP” or “RFQ”) via the web, or to select qualified vendors. The PI will assist the Foundation in drafting the technical requirements of the RFP/RFQ, identifying potential vendors, and evaluating proposals received. Written justification is required if the vendor giving the lowest price quotation is not recommended by the project director to receive the order. The Foundation will select the winning vendor based on considerations of cost, technical merit, and documented special requirements.
- Sole Source Purchases: A procurement is sole source when the requestor specifies a particular vendor/product for the order, and no alternative quotes are solicited. Because sole source purchases do not follow state and federal requirements for competition and price analysis, such purchases must be justified in writing by the PI. The sole source justification should indicate what other products and vendors were examined and why they were rejected, what the unique performance characteristics of the specified products are, or why that particular product or service is essential to the conduct of the project.
Check Requests. The Check Request Form can be used for the following:
- Reimbursement for cash or personal credit cards used on behalf of the program.
- Prepaid Travel Expenses: to request required advance travel payments as set forth in Section 5.g.
- Vendor/Contractor Invoices: to recommend payment for goods or services received
- Stipend/Honorarium disbursement
Note: For travel reimbursements, see Section 5.
Required Receipts & Documentation
for Reimbursements, the vendor(s) original, itemized, dated receipts are required for reimbursement. If an original itemized receipt is not provided, an satisfactory explanation must be provided, in addition to other proof of payment, such as copy of front and back of a cancelled personal check or credit card statement;
for Vendor/Contractor payment, the original invoice must be attached;
for Prepaid Travel Expenses, documentation justifying need for advance payment must be attached. Advance payments are made directly by the Foundation to the payee, these amounts will not be advanced to the traveler.
for all reimbursements/payments/disbursements, include any written approvals received from the Foundation or sponsor related to the purchase; and
include any other documentation requested by the Foundation or as required by CSUEB Foundation policies and procedures.
Check Processing Timelines
All complete check requests and travel reimbursements received by the Foundation office by noon of Monday will be processed during that week with a check being available for pickup or mailed out on Thursday of the following week from Foundation Accounting.
Processing of these requests involve a review of such things are required documentation, original details receipts, allowability, required signatures, complete PeopleSoft Chart Fields, etc. Requests that are incomplete, inaccurate or lack required attachments will be returned to the requestors.
New payees or vendors are required to complete the IRS form (W9) before they can be established in PeopleSoft AP subsystem. This may lead to additional delays up to a week.
All checks will be distributed via U.S. mail every Thursday.
Note: all checks are mailed to payees so please ensure the correct address is on file.
The University Bay Card office issues Grant Copy Cards which will automatically charge the sponsored program for copies. Requesting a Grant Copy Card is optional. It is for programs with substantial and frequent copying needs already written into their grant budgets. Incidental copying is appropriately captured as indirect costs (like postage, electricity, telephone, etc.). Projects with occasional large copying needs may still charge their grant by taking their jobs to a copying service and submitting a check request.
The procedure for obtaining a Grant Copy Card is as follows:
The Principal Investigator through his/her department administrator must request a special departmental copy card (called the “Grant Copy Card”) by emailing email@example.com with the following information:
- Name of the sponsored program
- Name of Principal Investigator (grant holder)
- Sponsored Program chartfield (Account-Fund-Dept ID-Project)
The Grant Copy Card will have the sponsored program name printed on the front of the card. The individual picking up the card will be required to sign for it.
The charges made with each copy card will be summarized on a monthly basis and billed by Accounting to your grant/foundation account at the Foundation. Each sponsored program will be required to submit a Foundation Check Request upon receipt of their Copy Card invoice.
Additional Grant Copy Cards can be requested for a small fee, though Principal Investigators are advised to limit the number, distribution, and access of Grant Copy Cards since all charges from these cards will be the responsibility of the sponsored program and/or department depending on allowability.