Glossary

• Research Administration Glossary (UCLA)
• A Primer on Indirect Costs

The following glossary is a joint effort between Grant & Contract Accounting (GCA) and the Office of Sponsored Programs. For questions or suggestions for new content, please contact Jill Yetman.

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A-21 (OMB Circular)

The OMB Circular establishing the cost principles for allowability of costs incurred by institutions of higher education under federally-sponsored agreements.

A-110 (OMB Circular)

The OMB Circular establishing uniform administrative requirements for grants and agreements with institutions of higher education, hospitals and other non-profit organizations.

A-133 (OMB Circular)

The OMB Circular establishing audit requirements for institutions of higher education and other nonprofit organizations.

Advance

An Advance is an authorization to establish a budget number prior to the actual receipt of an award. The Office of Sponsored Programs (OSP) will verify that the award has been funded and then forward an NEA to GCA. Normally this is done only when the granting agency has notified the UW that the award letter will be issued late.

Allocable Cost

A cost is allocable to a particular cost objective (i.e., a specific function, grant project, service, department, or other activity) in accordance with the relative benefits received. A cost is allocable to a project where it is treated consistently with other costs incurred for the same purpose in like circumstances and (1) is incurred specifically for the award; or (2) benefits both the award and other work and can be distributed in reasonable proportion to the benefits received; or (3) is necessary to the overall operation of the organization.

Allowable Cost

A cost incurred by a recipient that is: 1) Reasonable for the performance of the award; 2) Allocable; 3) In conformance with any limitations or exclusions set forth in the federal cost principles applicable to the organization incurring the cost or in the Notice of Grant Award as to types or amount of cost items; 4) Consistent with internal regulations, policies and procedures that apply uniformly to both federally-funded and other activities of the organization; 5) Accorded consistent treatment; 6) Determined in accordance with generally accepted accounting principles; and 7) Not included as a cost in any other federally-funded grant (unless specifically authorized).

Audit Resolution

The action to resolve audit findings and recommendations, including management and systems deficiencies and cost settlements findings (i.e., questioned costs determined to be unallowable).

Automatic Carryover

Under expanded authorities for research grants, the authority that is delegated to the recipient to move unobligated balances remaining at the end of any budget period to a subsequent budget period which thereby allows for additional expenditures in the subsequent budget period.

Award

An Award is a sponsoring agency agreement to contribute funding to a specific project. When a sponsor approves an award, a formal notice is sent by the sponsoring agency to the University's Office of Sponsored Programs. This notice is usually in the form of a grant or a contract. The Office of Sponsored Programs reports the award to the UW Board of Regents for acceptance and issues a Notice to Establish Account (NEA). The NEA is sent to Grant and Contract Accounting who will then establish a budget for the amount of the award. The term does not include: technical assistance, which provides services instead of money; other assistance in the form of loans, loan guarantees, interest subsidies, or insurance; direct payments of any kind to individuals; and contracts which are required to be entered into and administered under procurement laws and regulations.

BAR

The BAR (Budget Activity Report) is a monthly detail summary of financial activities including budget revisions, encumbrances, actual expenditures, salary allocations, expired salary allocations and revenue. The BAR's are distributed monthly by Information Systems to the unit administering the budget number.

BSR

The BSR (Budget Status Report) contains cumulative financial activity of each budget by sub-object and object expenditure code. For state budgets the BSR reflects biennial budget status. For grants, contracts and other budgets, the year to date may represent a designated time period or an indefinite time period as specified for the particular budget in the award/agreement. The BSR's are distributed monthly by Information Systems to the unit administering the budget number.

Budget Period

The intervals of time into which a multi-year period of assistance (project period) is divided for budgetary and funding purposes. Budget periods are usually 12 months long but may be shorter or longer, if appropriate.

Carryforward

Unexpended award funds on grants and contracts which are moved to the next funding period (usually a year) where the agency (sponsor) allows the carryover of unexpended funds.

Cognizant Agency

The Federal agency which, on behalf of all Federal agencies, is responsible for implementing the requirements of the Single Audit Act which include: reviewing, negotiating, and approving cost allocation plans, indirect cost rate and similar rates; receiving and approving non-federal audit reports; conducting federal audits as necessary; and resolving cross-cutting audit findings. The University of Washington's cognizant agency is the Department of Health and Human Services (DHHS).

Concurrence Letter

Click term for more information

Closing Accounts

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Closing Types

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Compliance

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Contract

An award instrument used for the acquisition, by purchase, lease, or barter, of property or services.

Cooperative Agreement

A Cooperative Agreement is used when the purpose of the agreement is similar to that of a grant, but substantial programmatic involvement of or coordination by the funding agency is anticipated during the project.

Cost Principles

The principles as set out in applicable statutes, regulations, grantor instructions, Office of Management and Budget Circulars and generally accepted accounting rules used for determining allowability, reasonableness, and allocability of costs applicable to grants, contracts, and other agreements.

Cost Sharing

Some funding agencies require the grantee institution to demonstrate its financial commitment to the project, or the commitment of other funding sources, by sharing the project costs. Cost sharing funds may come from an outside source in the form of cash contributions, volunteer services from the University’s own funds (e.g. personnel effort without salary recovery); or from shared resources or facilities. If the award is federal, only acceptable non-federal costs qualify as cost sharing.

Cost Transfer Invoice

A form used by a department which provides goods or services to charge the cost of those goods or services to the budget of the requesting department.

Deficit

The excess of expenditures over revenues (authorized budget) during an accounting period or award/project period for grants and contracts.

Direct Costs

Those costs that can be specifically identified with a particular project, program, or activity.

Disallowance

Expenditures incurred on a sponsored project for which the sponsor will not pay. This occurs when expenditures are not in compliance with the award terms.

Disallowed Cost or Disallowance

A charge to a grant that the Federal awarding agency determines to be unallowable, in accordance with the applicable federal cost principles or other terms and conditions contained in the award. Typically the sponsor will not pay for these expenditures and the disallowed expenditure becomes the responsibility of the PI and must be transferred to another budget (non-federal) or receive after-the-fact approval from the sponsor.

Encumbrances

Obligations in the form of purchase orders, contracts, or salary commitments which are chargeable to an award and for which a part of the awarded amount is reserved. They cease to be encumbrances when paid.
Encumbrance Codes Matrix (T, BSC, BIA, TN, BCA, ZB, and others)

Equipment

Tangible assets acquired through donation, gift, purchase, capital lease, or self construction with a life expectancy of more than one year.

Expanded Authorities

The operating authorities provided to grantees under certain research grant mechanisms that waive the requirement for Sponsor prior approval for specified actions.

Expenditure

All monies used in the operation of a budgeted project are Expenditures. Expenditures may include faculty salaries, student compensation, equipment acquisition, travel expenditures or any other activity which can be assigned a dollar value. Expenditures are recorded in the Financial Accounting System under the budget number being charged for the activity. Note: Encumbrances are not expenditures and are recorded to remind PI's of a formal commitment.

Faculty Effort Certification (FEC)

Quarterly and semiannual report used to document faculty effort on grants and contracts.

GC1

Form submitted to The Office of Sponsored Programs along with proposal which contains the budget, institutional signatures, basic proposal information, addresses and policy issues.

GIM

GIM is the acronym for Grants Information Memoranda. GIM's are maintained at official reference stations and define the policies and procedures associated with grant and contract awards/budgets.

Graduate Operating Fee

The term “Graduate Operating Fees” refers to the combination of tuition and fees which are required of all graduate students at the University of Washington. Prior to 1985 research assistants at the University of Washington were expected to pay these fees from their salaries. At that time the salaries were reduced by the amount at issue, and the tuition and fees now appear as a separate item in the budget rather than as a component of the salaries. This is a common practice at research universities. Research assistants at the University of Washington are considered residents, regardless of their actual resident status. The fees at issue, therefore, are at the same level as those for residents of the State of Washington.

Grant

Financial assistance (including cooperative agreements) in the form of money, or property in lieu of money, by the Federal government to an eligible recipient. The term does not include: any Federal procurement subject to the Federal Acquisition Regulation (FAR); technical assistance (which provides services instead of money); or assistance in the form of revenue sharing, loans, loan guarantees, interest subsidies, insurance, or direct payment of any kind to individuals.

Incremental Award or Supplement

An Incremental Award or Supplement is a request for additional award support for an existing project. The grant/contract award number remains the same and separate cash accountability is not required.

Indirect Costs

Those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, program, or activity but are nevertheless necessary to the operations of the organization. At educational institutions such costs normally are classified under the following indirect cost categories: depreciation and use allowance, general expenses, sponsored project administration expenses, library expenses, departmental administration expenses, library expenses, departmental administration, operations and maintenance expense and student administration services.

Institutional Review Board (IRB)

A faculty committee charged with reviewing and approving the use of human subjects in all research projects. The IRB serves as an institutional compliance committee and is responsible for reviewing reported instances of regulatory noncompliance related to the use of human subjects in research.

Interim Budget

A University budget other than a grant or contract to which it is allowable to charge expenditures temporarily pending receipt of grant or contract awards. Examples of these include Research Support Allocation, gift and discretionary budgets.

Internal Sales Document (ISD)

A form used by service centers or auxillary enterprises (budget numbers which begin with 14, 15, 16 or 25) which provide goods or services to charge the cost of those goods or services to the budget of the requesting department.

Journal Vouchers

An accounting entry for the recording of certain transactions, corrections or information. The journal voucher usually contains an entry or entries, explanations, references to documentary evidence supporting the entry or entries, and the signature or initials of one or more properly authorized officials.

Matching funds

Matching funds, if required by the funding agency, are raised from non-federal outside sources to increase the level of support provided by the funding agency. Such funds must be identified by the donor or funding source for use as matching funds.

NEA

A NEA (Notice to Establish Account) is a form used by the Office of Sponsored Programs (OSP) to formally notify the Grant and Contract Accounting office to establish, extend, supplement or reduce a budget number for a grant/contract award.

No Cost Extension

A no cost extension is an extension of the project period without additional funding. If the project is not completed and awarded funds remain unspent toward the end of a project period, many funding agencies will allow the PI to request more time to complete the work while spending remaining funds. A no cost extension must be requested of the agency in writing, with OSP countersign signature, well before the existing project period end date. FDP agencies such as NIH, NSF, DOE, etc. allow the grantee institution to approve a single no cost extension (up to 12 months) without prior approval but still require written notification.

Obligated Funds

Funds that are unexpended but are encumbered at the end of the funding period to cover the known obligations. They are considered to be unexpended funds. However, if the agency allows, the "obligated" funds and matching encumbrances are carried forward to the next funding period.

Parent

A Parent is the budget which is used to group together multiple budgets under the same award. For example, a sponsored agreement for a specific project may involve several segments/departments and the individual departments wish to establish separate control budgets for processing purchases and recording salaries. Each budget is set up with the control (parent) budget number in order to combine budget information on the Consolidated Budget Status Report by Parent for overall review by the Program Director.

Sub-Budgets for Funding Restricted for a Specific Purpose
Faculty members with funds restricted within a grant for a specific purpose (e.g. a supplement given to be used only for salaries and supplies of a specified individual or group of individuals) are encouraged to establish a sub-budget. To that sub-budget, they are encouraged to transfer the restricted funding and post only related expenditures. This will improve tracking and subsequent reporting to the sponsor.

Preaward Cost

The cost incurred prior to the effective date of the award, directly pursuant to the negotiation and in anticipation of the award, where incurrence is necessary to comply with the proposed delivery schedule or period of performance.

Prior Approval

The written permission provided by the authorized granting official from the awarding office before the recipient may undertake certain activities (such as performance or modification of an activity), expend funds, or exceed a certain dollar level.

Program Income

The gross income received by the recipient and/or sub-recipient directly generated by the supported activity, or earned as a result of the award. Program income includes (but is not limited to) income from fees for services performed, the use or rental of real or personal property acquired under the grant, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and payment of interest on loans made with grant funds. Standard Program Income Alternatives are: 1) Deduction alternative - Deducted from total allowable costs and third party in-kind contributions for the purpose of determining the net costs on which the Federal share of costs will be based. When this alternative applies, the deduction must be made from current costs unless the terms of the award authorize deferral to a later period; 2) Cost Participation or Matching Alternative - Used to satisfy all or part of a cost participation or matching requirement; 3) Additional Cost Alternative - Used for costs that are in addition to the allowable costs of the project for any purposes that further the objectives of the legislation under which the grant was made.

Project Period

The total time period stated in the Notice of Grant Award (including any amendments) for which Federal support is recommended. The project period may consist of one or more budget periods. It does not constitute a commitment by the Federal government to fund the entire project period.

Renewal Award

This is an authorization for follow-up support to a project. Renewal awards usually retain the same grantor number but require a separate budget number for accounting purposes. The budget amount for the renewal award consists of the approved annual award and authorized carryover of unexpended or obligated balances.

Requisitions

A written (or on-line) request, usually from one department to the Purchasing department for specified goods or services.

Research Cost Recovery

Allocation of funds back to academic units that generate indirect cost from grants and contracts.

Restricted Funds

Funding from a prior year which is carried forward (unexpended and unobligated) to the current year and requires agency approval to expend. This is coded 37-99 on the accounting system and is encumbered.

Revenue

Revenue is defined as funds received from sales and services. Revenue and funding is recorded in the University of Washington current operating fund, which is the economic resource of the University available for the purpose of performing the primary and supporting missions of the institution. Refer to D35.3, Operations Manual. The major sources of REVENUE funding for the University are state allocations, grants, contracts, gifts, rents, royalties, and interest and dividends from investments. All revenues are included in the University's biennial budget request and are subject to State accounting and budgeting requirements.

RTE (Request to Transfer Expenditures)

A transfer of expenditures between budgets. Transfer of expenditures to or from Grant/Contract budgets must comply with GIM-15. See Request to Transfer Expenditure form for documentation of transfer request.

Single Audit Act

Enacted by Congress in 1984 to establish uniform audit requirements for state and local governments receiving federal financial assistance. The University of Washington is included in the State of Washington Single Audit (OMB Circular A-133).

Sub-budget

A budget established to account for an identifiable segment of an award (see PARENT). It is also used when funding is given to individuals to complete an approved project from a University-controlled funding source. The budget information on a subbudget is reported on the Consolidated Budget Status Report for each parent.

Subcontract

A formal cooperative research relationship with another organization, generally a university or non-profit research center, that is part of a sponsored agreement/proposal accepted by the University of Washington and the other organization participating in the research project or provides a required service to complete the research project. See GIM 7 for additional information.

Supplemental Award

The addition of funds to an existing award to:

1. Support New or additional activities which are not identified in the current grant or which significantly expand the project's scope beyond the purpose(s) for which the current grant was awarded;

2. Support an expansion of the grant approved activities; or

3. Provide for an increase in costs due to unforeseen circumstances.

For supplemental awards, the budget and grantor numbers remain the same.

Unallowable Cost

A cost determined to be unallowable in accordance with the applicable cost principles or other terms and conditions contained in a grant award.

Unexpended Funds

The funding (money) not spent during the award process.

Zero Balance

At the closing of a grant, when cash, expenditures, budget, and revenue are equal, the budget is said to have a zero balance.