Fiscal Management Glossary

Sponsored Projects

A-21 - The OMB Circular establishing the cost principles for allowability of costs incurred by institutions of higher education under federally sponsored agreements.

A-110 - Circular published by the Office of Management and Budgets (OMB) (federal government agency) establishing administrative policies for fiscal management of grant awards in non-profit and higher education institutions.

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

Is incurred specifically for the award; or
Benefits both the award and other work and can be distributed in reasonable proportion to the benefits received; or
Is necessary to the overall operation of the organization.

Allowable Cost- A cost incurred by a recipient meeting the following requirements:

Reasonable for the performance of the award;
Allocable;
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;
Consistent with internal regulations, policies and procedures that apply uniformly to both federally-funded and other activities of the organization;
Accorded consistent treatment;
Determined in accordance with generally accepted accounting principles; and
Not included as a cost in any other federally funded grant (unless specifically authorized).

Budget Period- Dates assigned by the sponsoring agency during which time funds may be expended, usually 1 yr period

Carryover-Unobligated and unexpended funds from a previous budget year which are to be expended during the current budget period; see PI handbook fro terms and conditions

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.

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 identified specifically with a particular activity within a sponsored project (i.e. supplies, salaries and wages, travel, etc.)

Encumbrance- All monies committed to the purchase or payment of an item or service; these funds have not actually been liquidated yet, however, they cannot be spent, these funds become expenditures when commitments have been fulfilled (i.e. invoices, etc.)>

Equipment- Tangible assets acquired through donation, gift, purchase, capital lease, or self-construction with a life expectancy greater than one year and valued over $5,000.

Expenditure- All monies used during the budget period to purchase tangible items in addition to payment of services

Expanded Authority- Authority granted to grantees to take certain actions without sponsoring agency prior approval. See PI Handbook for further detail

Incremental Award- Additional funding granted to an existing award, also referred to as a supplemental award

Indirect Cost- Costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. Also referred to as F&A costs

Obligated Funds-Funds that are unexpended but are encumbered at the end of a budget period or project period

Pre-Award Costs- Costs incurred prior to the actual start date of the award, see the PI handbook for policies governing these types of costs

Prior Approval-Approval issued by the sponsoring agency for certain expenditures and fiscal management issues. See the PI handbook for information regarding prior approval policies

Project Period - The period assigned to complete the awarded project, can be between 1 and 5 yrs long

Purchase Requisition- Form utilized to generate purchase orders for the purchase of supplies, etc. When utilizing the purchase order expenses become encumbered until invoiced

Restricted Funds-Funds for which expenditures must comply with federal government terms and policies

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 Spelman College and the other organization participating in the research project or provides a required service to complete the research project.

Supplemental Award-See incremental award

Unallowable Cost-A cost not in compliance with the terms and policies of the awarding agency

Unexpended Funds-Funds which are not encumbered nor spent during the life of the award