Date:       April 13, 2009

To:          Contract and Grant Liaisons and Contract and Grant Financial Analysts

From:      Nancy Lewis                                                                 Connie Feeley

               Director, Sponsored Projects                                          Manager, Extramural Funds

Subject:  Procedural Changes for American Recovery and Reinvestment Act of 2009 (“ARRA”) Proposals and Awards

Our campus expects a significant increase in contract and grant activity related to the American Recovery and Reinvestment Act of 2009 (“ARRA”). Due to the accountability and transparency requirements for ARRA funds, recipients are required to separately identify, administer, and close ARRA awards, regardless of whether they are new or supplements to existing awards. As a result, Sponsored Projects (“SPO”) and Extramural Funds Accounting (“EMF”) have implemented a number of new procedures to address the unique nature of these proposals and awards. They are as follows:

Proposals

New (Renewal) Proposals

• Some sponsoring agencies have indicated that they plan to fund “well reviewed, unfunded” proposals with ARRA funds. Those proposals will require new datasheets and revised budgets. Revised budgets should be prepared using the prevailing rates for salaries, benefits, tuition, fees, GSHIP, indirect costs etc. 

Supplemental Proposals

• Department’s liaisons should select “New” as the proposal type for ARRA proposals submitted for competitive or administrative supplements to existing awards. This includes proposals submitted to the NIH announcement for Competitive Revision applications on April 21, 2009.  
• Proposals submitted for competitive or administrative supplements to existing awards must use the indirect cost rate in effect at the time that the proposal is submitted to the sponsoring agency. Thus, proposals for research submitted to the upcoming ARRA deadlines for supplemental proposals should include the prevailing indirect cost rate of 51.5% of modified total direct costs.

Direct Charging Administrative Costs for ARRA funded Projects

ARRA awards will require an extensive level of reporting and administrative management in order to meet the accountability requirements for these awards. To meet the requirements, departments may direct charge salary and benefit costs for an Administrative Specialist to assist with the administration of ARRA awards. Administrative Specialists charged to ARRA awards should be responsible for (list is not exhaustive):

• Monitoring expenditures under ARRA awards to ensure that the funds are being spent timely and in accordance with the award terms and conditions.
• Coordinating the data required for reporting under ARRA and coordinating submission of the data to the sponsoring agency with PI’s, SPO, and EMF.
• Any other administrative and financial tasks related to ARRA awards.

Departments may budget a percentage of an existing FTE or recruit a new FTE to carry out these duties.  The cost for the Administrative Specialist should be allocated among the department’s ARRA grant proposals and awards using a sound methodology that must be thoroughly justified in each proposal and award file. Please keep in mind that Administrative Specialists charged to ARRA grants must be working on those grants exclusively for the percentage of time charged to the grant. Those individuals will be required to complete Personnel Activity Reports (PAR’s) for each grant to which their salary is charged.

Subawards

• Indirect costs will be assessed on the first $25,000 of each subaward under ARRA awards. Subawards under ARRA supplemental awards will receive this assessment, regardless of whether the subrecipient has an existing subaward under the prime (parent) award. SPO will issue a new subaward to the subrecipient for ARRA funds that will have to be tracked and reported on separately. New subcontract forms will be required.

Awards

• SPO has implemented the following new codes in Orbit and in Gus for ARRA awards:
• Code “14” – American Recovery and Reinvestment Act of 2009 (“Stimulus/ARRA”) award-special terms and conditions apply
• Code “60” – American Recovery and Reinvestment Act of 2009 (“Stimulus/ARRA”) additional reporting requirements apply.

                                             http://gus.ucsb.edu/docs/ORconditiondefs.2009.03.txt.zip   --- data file

                                             http://gus.ucsb.edu/docs/award_conditions.pdf   ---- update instructions.

• SPO will include a “Z” at the end of the award number for NIH supplements awarded with ARRA funds. This will assist in distinguishing the supplement award from the prime (parent) grant award.

•  EMF will assign a new fund number for all ARRA awards, regardless of whether they are submitted/funded as new or supplemental awards. Again, this is in keeping with the requirement that ARRA awards be treated separately for financial reporting purposes. ARRA award funds may not be comingled with funds from the prime (parent) award.

NSF and NIH have published information regarding their procedures for the administrative and financial treatment of ARRA awards in the following documents:

NSF FAQ: http://www.nsf.gov/pubs/2009/nsf09038/nsf09038.pdf

Recovery Act of 2009: NIH Award Terms and Additional Information for Recipients Receiving Recovery Act Grant Funding
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-09-080.html

We encourage those departments that will apply for/accept funding from these sponsors to review those documents very carefully as they contain important information that you and your PI’s will need to administer ARRA awards from those sponsors. We will provide similar guidance from other federal sponsors as it becomes available.

Finally, SPO and EMF are working with colleagues, both within the UC system and nationally, to obtain clarification on the data required for ARRA reporting and the method of submission. We will provide guidance to the campus on ARRA reporting requirements in the coming weeks.