Successful award management includes both programmatic and fiscal management. As such, investigators, awardees, and sponsoring organizations all share responsibility in the outcome. When done right, award management ensures compliance of award terms, conditions, and deliverables, specific sponsor and programmatic requirements, and the policies and procedures that govern awardee organizations.
Additionally, sound award management is critical for ensuring sponsor and public trust. Universally, it involves consistent, timely review of a project’s actual progress against planned activities and expenditures.
Role of Programmatic Management in Award Management
A majority of sponsored awards are made to institutions and organizations. To guide the process, the Principal Investigator (PI) is primarily responsible for ensuring compliance with the programmatic goals of the project, including tangible deliverables. In this role, PIs are obligated to execute the project as outlined in the scope of work. Also, they report to the sponsor on project progress and delays.
Many sponsors require progress reports on the technical or programmatic aspects of the project. Frequently, requirements include progress toward project goals and objectives, accomplishments to date, resulting products and dissemination of results, and plans for future reporting periods.
Interim progress reports inform sponsors of issues in meeting programmatic objectives, and may be beneficial as well. If changes are needed, sponsor approval may be required. Often, challenges identified include actual or anticipated delays, along with the plans to overcome or resolve the issues at hand.
Responsibilities of PIs
PIs are responsible for timely preparation and submission of interim and final progress reports. As such, they must follow the requirements of the award terms and conditions. Otherwise, failure to submit timely reports may result in sponsors:
- Withholding payments
- Disallowing part or all of a project’s costs
- Suspending or terminating an award
- Withholding additional awards from the PI and/or institution
Awardees can assist investigators in complying with reporting obligations. One way of doing so is to send automated reminders before reports are due. Additionally, they can centrally store copies of annual and final technical reports as evidence of fulfilling reporting obligations.
Importance of Fiscal Management in Award Management
Together with programmatic management, sound fiscal management is vital to successful award management. Awardees are required to manage budgets in accordance with the award terms and conditions. This includes spending within approved budget periods and amounts, reviewing expenditures for allowability, posting expenditures in a timely manner, and reporting on award financials.
To achieve the above, best practices in fiscal management include:
- Developing a spending strategy at the start of the award
- Periodic review of expenditures, balances, and projected balances
- Timely review and submission of financial reports
Once a sponsored account has been set up in the awardee’s financial system, the PI begins charging expenditures. To follow protocol, this must be done in accordance with the sponsor’s terms and conditions and the awardee’s policies and procedures.
The PI, in consultation with appropriate administrator(s), reviews the account for accuracy. Together, they discuss a spending plan. In doing so, the PI helps to ensure availability of funds throughout the life of a project. Additionally, the PI creates safeguards to protect against over-spending.
For further insight, financial forecasting tools aid in creating final cost projections. These may include all financial resources available for the project. Specifically, PIs are looking for sponsor budget, committed effort, matching funds, anticipated program income, and other sources of revenue.
After the initial spending plan is developed, PIs meet regularly with unit administrators. In collaboration, they examine average monthly expenditures, anticipated expenditures, balances, and projected balances.
Throughout the lifecycle of a sponsored award, expenditures are reviewed on a regular basis. This ensures that the costs benefit the award, are necessary to carry out the scope of work, are properly allocated to the award, and are allowable according to sponsor terms and conditions.
Administrators, in consultation with the PI, perform periodic reviews and reconciliations of expenditures. This ensures all project costs are allowable and are appropriately allocated to the correct award.
If projects include cost sharing or matching, the cost sharing is also reviewed for allowability and allocability. Additionally, cost share transactions are reviewed for compliance with award specific terms and conditions.
Why Timely Review Matters
Consistent, timely review of award expenditures is important for identifying errors and actions that may require sponsor approval. Ongoing comparison of budget to actual expenditures is a good method for identifying deviations from the sponsored-approved budget. Otherwise, significant deviations may signify a change in the scope of work, under- or over-spending, or errors in posting charges to an account.
Budget to Actuals comparison provides transparency into the timing of expenditures as they relate to the performance of the award (aka burn rate). If evidenced, delayed spending may be an indication of project delays or that charges have been misallocated to a different account. On the other hand, accelerated spending, particularly at the end of an award period, may be an indication of inappropriate spending or inadequate financial planning.
Review of budget to actuals allows awardees to uncover underspending and potential overspending. This aids in avoiding cost overruns or surpluses at closeout.
In addition to review, the anticipated expenditures and balances are checked against the spending plan. Doing so keeps programmatic goals and spending on-track.
As with programmatic reporting, a majority of sponsors require interim and final financial reports that:
- Detail expenditures and obligations incurred during the award period of performance
- Accurately reflect the use of sponsored funds as recorded in the awardee’s financial records
- Comply with the sponsor’s terms and conditions.
Financial reports are submitted by the awardee organization. Working together, these reports are prepared in tandem with those closest to the research (often the PI) and the transactions (usually a unit administrator). Awardees may have a financial accounting system that complies and reports financial data based on budget categories. To remain aligned, the PI and appropriate administrators review and certify financial reports prior to submission to the sponsor.
Award management ends after all programmatic and financial obligations have been satisfied, and final programmatic and financial reports have been filed with the sponsor
Once award management ends, copies of technical and financial reports are maintained centrally. Along with this, records justify the need for the expenses charged to the award along with how the expenses benefitted the award. Further, any other documentation as required by the award terms must be maintained as well.
Conclusion: Successful Award Management
Award management is an ongoing, shared responsibility between the PI, the awardee, and the sponsoring organization. As such, successful award management links progress toward programmatic objectives with financial expenditures and is reliant on a systematic review of each. Additionally, effective award management is supported by custom reports and forecasting tools, along with consistent communication between the PI, the awardee, and the sponsoring organization.
How Streamlyne Helps with Award Management
Streamlyne Research is a platform of useful and innovative tools to help you better manage your awards. For example, these features include Award Report Tracking and a new Posted Budget Summary feature. Additionally, you will enjoy our detailed Budget-to-Actuals Report, which combines expenses from your Financial System with award budget information from Streamlyne Research. For more information about Streamlyne Research, and a customized demo, please contact us.