Financial Management of Sponsored Projects

Budgetary changes

Hardship Authorization Requests

Project teams may need to request Hardship Authorization when a new award is expected, and the team needs to spend funds, but the award has not yet been finalized. Project teams must submit a Hardship Authorization Request to ORSP via the eRPM system. Learn more at Request a Hardship Authorization.

Award change requests

As part of managing an award, project teams may need to request changes related to budgets, including award reductions or deobligations, carry forward of funds, cost sharing reductions, and rebudgeting requiring sponsor approval. An award change request (ACR) must be created in the eResearch Proposal Management System (eRPM) for the Office of Research and Sponsored Projects (ORSP) to take action on or make changes to an award. Visit the Award Change Request (ACR) page for information on each of these budgetary changes and other ACRs.

Budget reallocation in M-Pathways

For information on reallocating budgets in the M-Pathways system for existing awards, visit Budget Reallocation Functionality on the Finance-Sponsored Programs website for step-by-step procedures, process flow diagrams and FAQs.

Managing budget/expenses

Allowable costs

Allowable costs for sponsored projects are expenses that are necessary, reasonable and allocable to a specific award. Learn more in these other pages on the ORSP website:

• Budget and Cost Resources
• Uniform Guidance Monitored Costs 

Facilities and administrative rates

Facilities and Administrative (F&A) Costs (sometimes referred to as Indirect Costs) are the costs of university operations that are not assignable to a particular project. The rates for F&A costs are negotiated between the university and the federal government for specific time periods. Visit the U-M’s Facilities & Administrative (F&A) Rates and Indirect Cost (IDC) Policies for more information on F&A costs and current negotiated rates.

Salaries and fringe benefits

Salary rates on sponsored projects are subject to the cost principles in the Uniform Guidance in addition to specific requirements federal agencies may have. Learn more about salaries and staff benefits in the Budget and Cost Resources section of the ORSP site, including guidance on determining staff fringe benefits.

Procuring equipment and services

Procurement Services provides support to U-M for the acquisition, use and disposal of goods and services, including a wide variety of products and services for research-related purposes. All transactions $50,000 or greater must be competitively bid by Procurement Services to ensure prices are fair and reasonable in an open and competitive marketplace. Learn more at Procurement Services and in this Navigate video on Procurement Policies and Procedures.

Accounts payable and receivable 

The Shared Services Center at U-M is responsible for payments, billing and collections, and other financial services. Visit Finance Services and the Accounts Receivable Policy for more information.

Effort reporting

Appropriately certified effort is an important compliance element of U-M’s research enterprise. Visit Effort Reporting on the Finance site for guidance on applicable policies and procedures, educational information, and contacts for questions. In addition, Navigate offers the following webinars and eLearning modules: Effort, Understanding Effort and Effort Certification.

Cost sharing

Cost sharing is the financial and non-financial support contributed by U-M and/or third parties to sponsored projects. Learn more about cost sharing and requirements.

Administrative support costs in existing awards

For administrative support costs, including clerical personnel, currently being charged as direct costs in federally sponsored grants and contracts, follow these guidelines:

• If an administrative or clerical position meets the requirements of §200.413 in the Uniform Guidance and was included in a project budget, as submitted to and approved by the sponsoring agency, such direct charges can continue to be made (at the appointment levels indicated in the approved budget) for the duration of the project. The requirements of §200.413 include:
  • The administrative or clerical services are integral to a project or activity
  • Individuals involved can be specifically identified with the project or activity
  • Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency
• The costs are not also recovered as indirect costs
• If an administrative or clerical position was not included in a federal sponsor’s approved budget, the prior approval of the federal sponsor is required.

Operating support costs, such as telephone line charges and office supplies, if explicitly identified in the budget as submitted to and approved by the sponsoring agency, can continue to be made for the duration of the project. The charges must be for “unlike circumstances” and be clearly linked to the specific aims of the project (for example, a line item for “communications” may not be sufficient to justify telephone line charges).

Graduate Student Research Assistant costs

Project teams must consider tuition and salary costs associated with Graduate Student Research Assistants. Learn more on the Graduate Student Research Assistant (GSRA) Cost Estimates page.

Human Subjects Incentives Program

The Human Subjects Incentives Program (HSIP) at U-M manages payments and compensation for people participating in research studies. Learn more at Human Subject Incentives Program.

NRSA childcare costs

As part of NIH’s ongoing efforts to develop programs that support family-friendly research environments, National Research Service Award (NRSA) Fellows and Trainees can request up to $3,000 per budget period for childcare costs provided by a licensed childcare provider. To request funds, complete U-M’s NRSA Childcare Supplemental Request Form and submit it along with any supporting documentation per the instructions.

Financial reporting and the Uniform Guidance