Tips:

Non-Catalog Special Requisition: Grant Subcontract

Contents

Important notes before you begin . . .

Who is able to create a grant subcontract requisition?

Users with Requester role.

What rules apply to grant subcontract requisitions?

Note: before creating a subcontract, verify that there has not been a previous subcontract where F&A has already been applied. (Check Commitment Control> Budget Overview)

F&A is only applied to the first $25,000 of expenses. If grant subcontract is $25,000 or more:

When should a grant subcontract requisition be created?

Once a subcontract is fully executed, a requisition for the full awarded amount must be created in NUFinancials to process payments to the subcontractor. The fully executed subcontract should be attached to the requisition. A subcontractor in this context is primarily another University doing work related to a grant.

When should a grant subcontract requisition not be created?

When spending on a grant or sponsored project is not to a subcontractor (i.e. other University). A grant subcontract requisition should not be created to place orders to vendors when grants funds will be used to pay for the items or service.

How are payments made on subcontracts?

Subcontractor must send per contracts invoices to ASRSP. ASRSP reviews, adds a certification statement, logs invoice then sends to the department for PI for approval signature. The schools/department Receiver enters a receipt document for the full amount of the invoice on the correct line item. By selecting the appropriate lines to receive on, F&A will automatically be generated by the F&A process. PI reviews, signs, and emails a scanned copy back to ASRSP.

Additional Resources

Accounting Services for Research and Sponsored Projects 847-491-3385

Subcontract checklist:

Do you have the following?

  1. Fully Executed Agreement (FEA) as a PDF from OSR.
  2. Completed Single Source Justification(SSJ) form
  3. Confirm the vendor Remit To address is current and active in NUFinancials
  4. The chart string for the subcontract

Hot Tip! Make sure you enter the same vendor ID (Vendor ID and Address line) on both lines to ensure only 1 PO is created for the subcontract. Have the FEA (Fully executed agreement) in hand to reference the vendor when creating the subcontract requisition to reference the correct vendor address for payments. If you don't see the correct address listed, then submit a Modify Vendor Request to add the correct address to the vendor record.

Hot Tip! Before you begin, remember to check to see if there was a previous Subcontract Requisition for this contract that may have already captured F&A.

Subcontract Workflow for First and Subsequent Years

Graphic: Subcontract Workflow for First and Subsequent Years

Subcontract Workflow for Amendments to Existing Purchase Orders

Graphic:Subcontract Workflow for Amendments to Existing Purchase Orders

Note: For training purposes the example below is for a grant subcontract greater than $25,000.

Step 1: Define Requisition

Note: For purposes of this training guide, a requisition is created for a grant subcontract greater than $25,000.

Navigation: eProcurement → Create Requisition → 1. Define Requisition

  1. Enter Requisition Name as determined by school/department naming conventions. Maximum number of characters is 30.
  2. Select Grant Subcontract. This creates a requisition that can be received by amount rather than quantity. Only select 1 box in the Special Requisition box.
  3. Click Continue.

Graphic: Define Requisition page with REQ title and Grant SubContract checkbox

Hot Tip!Start the requisition name with SUBK, then you can use that to filter on for searches in Manage Requisitions. Remember Subcontracts are multi-year!

Step 2: Add Items and Services

  1. Click Non-Catalog tab.
  2. Click Non-Catalog Item.

Graphic: Non-Catalog tab

Graphic: Non-Catalog Item link


Step 3: Enter line item 1 for F&A ($25,000 or less, based on fully executed agreement)

  1. Provide grant contract information for line item 1:
    1. Item Description (required): Enter F&A description and performance period.
    2. Price (required): $25,000 or less. Enter US dollars and decimal. Zeros after the decimal are system-supplied.
    3. Quantity (required): Always 1 for grant subcontract.
    4. Category (required): Make certain the Category for line 1 is Subcontracts < 25K.
    5. VendorID (required): Institution with which NU has established the subcontract. Hot Tip! Make sure you select the same Vendor ID and address row on both lines to ensure only 1 PO is created for the subcontract.
    6. Unit of Measure (required): Always EA for each.
  2. Click Add Item.

Graphic: Add Items and Services entry for Line 1

Step 4: Enter line item 2 for remaining amount (over $25,000, based on fully executed agreement)

  1. Provide grant contract information for line item 2:
    1. Item Description (required): Enter F&A description and performance period.
    2. Price (required): Remaining balance of the award amount. Enter US dollars and decimal. Zeros after the decimal are system-supplied.
    3. Quantity (required): Always 1 for grant subcontract.
    4. Category (required): Make certain the Category for line 2 is Subcontracts > 25K.
    5. VendorID (required): Institution with which NU has established the subcontract. Hot Tip! Make sure you select the same Vendor ID and address row on both lines to ensure only 1 PO is created for the subcontract.
    6. Unit of Measure (required): Always EA for each.
  2. Click Add Item.
  3. Click Review & Submit.

Graphic: Add Items and Services entry for Line 2

Remember! Make sure you enter the same vendor ID (Vendor ID and Address line) on both lines to ensure one PO is created for this subcontract. Have the FEA (fully executed agreement) in hand to reference the vendor when creating the subcontract requisition. If you don't see listed, then submit an Add Vendor request for correct address.

Step 5: Provide Ship To and Chart String for F&A (line item 1)

Method 1 (basic)

Use for single line item requisition.

Graphic: Small Triangle icon for adding the Ship To code and chart string to an individual line.

Method 2 (advanced)

Use for multi-line item requisitions like a subcontract if same ship to and/or chart string applies to multiple line items. This method also allows you to add or overwrite a vendor to both lines simultaneously thereby ensuring the same Vendor ID and address are on both lines.

Quick Check: Do you have same vendor/address on both lines?

Caution: Did you update the second line for the correct account code?

Graphic: Modify Line/Shipping button to add Vendor, Ship To and Chiart string to multiple lines at once.

Method 1 (basic) continued

  1. Enter Ship To code (use magnifying glass to look up, if necessary).
  2. Enter Fund, Dept, Project, Activity and Account for the chart string. Project and Activity are required for grant chart strings. The Percent field should be 100.

Graphic: Enter Ship To and Chart String information

Note: For Account, enter 78640 (subcontract less than or equal to $25,000). If an F&A waiver is in place see the Appendix for waived F&A entry on a subcontract requisition.

Step 6: Provide Ship To and Chart String for remainder of subcontract (line item 2)

Repeat Step 5 for line item 2, using Account 78650 (subcontract greater than $25,000).

Step 7 (optional): Confirm grant subcontract created correctly

Graphic:  Review of Lines 1 and 2 for accurate entry.

Note: See Appendix on F&A charges on subcontracts for more detail.

Step 8: Hold PO from Further Processing

Select this checkbox to prevent the Purchase Order from being sent to the subcontractor. It is not necessary to send a PO to a subcontractor because there is a fully executed agreement in place.

  1. Click Hold PO From Further Processing checkbox.
  2. Enter a reason in the Requisition Header Comments box: Subcontract, do not send PO to vendor/subcontractor.

Graphic: Hold PO from Further Processing checkbox and reason entry


Step 9: Attach subcontract to requisition

For complete details on attachments and line comments, see Attachments and Comments on the FFRA website.

For grant subcontracts, attach the FEA agreement or the amendment containing signatures from both parties (OSR version).

If attaching a document, follow these steps:

  1. To the right of the line item, click the Comments bubble.
  2. Graphic: Comments bubble on Requisition Line

  3. Click Add Attachment.
  4. Click Browse.
  5. Browse for file to attach.
        • Ex. SSJ for amount over $25,000.
        • Ex. FEA (fully executed agreement) (PDF from OSR email notification) for back-up of subcontract amount.
      • Double-click the desired file name, or, single-click file name and then click Open.
      • File name displays in the Browse box.
      • Click Upload.
      • Attached file name displays in the Attached File box.
      • Add a comment (comments are required with attachments).
      • If you have more attachments, repeat previous steps.
      • Click OK when you are finished.

The comments bubble is no longer empty

Step 10: Check Budget

  1. Click Check Budget.
  2. Click OK (to allow system to save the REQ and check the budget).

If you get Valid as the result, you may continue. If you do not, click the Error link to investigate the issue.

Graphic: Check Budget button

Graphic: REQ Save message.

The Processing icon is in the upper right portion of the screen while the budget check is processing.

Graphic: Example of Valid Budget Check indicator

Graphic: Refer To iconREFER TO Resolve Budget Check Errors if budget check status is not valid.

Step 11: Save and Submit

Graphic: Save and Submit button

Requisition is submitted to workflow for approval. Upon approval, a unique purchase order number beginning with PUR is system-generated.

Graphic: Note iconIMPORTANT NOTES

In A Nutshell

Navigation:eProcurement → Create Requisition →Define Requisition

Step 1: Define requisition

  1. Enter requisition name as determined by school/department naming conventions (maximum 30 characters).
  2. Click Grant Subcontract.
  3. Click Continue.

Step 2: Add items and services

  1. Click Non-Catalog tab.
  2. Click Non-Catalog Item.

Step 3: Enter line item 1 for F&A ($25,000 or less).

  1. Enter item information.
    •   Item Description (required): Enter brief description to identify F&A and performance period. The first line item is for F&A amount ($25,000 or less).
    •   Price (required): $25,000 or less. Enter US dollars and decimal. Zeros after decimal are system-supplied.
    •   Quantity (required): Always 1 for grant subcontract.
    •   Category (required): Make certain the Category for line 1 is $25,000 or less. Type in or click look up button (magnifying glass).
    •   Vendor ID (required): Institution with which NU has established the subcontract. Type in or click look up button (magnifying glass).
    •   Unit of Measure (required): Type EA for each.

All other fields are optional.

  1. Click Add Item

Step 4: Enter line item 2 for remaining award (over $25,000)

  1. Enter item information.
    •   Item Description (required): Enter brief description for remainder of subcontract (over $25,000) and performance period.
    •   Price (required): Remaining balance of award amount over $25,000. Enter US dollars and decimal. Zeros after decimal are system-supplied.
    •   Quantity (required): Always 1 for grant subcontract.
    •   Category (required): Make certain the Category for line 1 is over $25,000. Type in or click look up button (magnifying glass).
    •   Vendor ID (required): Institution with which NU has established the subcontract(same as in Line 1). Type in or click look up button (magnifying glass).
    •   Unit of Measure (required): Type EA for each.

All other fields are optional.

  1. Click Add Item.
  2. Click Review and Submit.

Step 5: Provide Ship to and Chart String for F&A (line item 1)

  1. Click expand section button (triangle).
  2. Provide the following:
    •   Ship To
    •   Fund
    •   Dept
    •   Project
    •   Activity
    •   Account use 78640 for subcontracts less than or equal to $25,000.

Step 6: Provide Ship to and Chart String for remainder of subcontract (line item 2)

Repeat Step 5 using Account 78650 for subcontracts greater than $25,000.

Step 7 (optional): Confirm grant subcontract created correctly

  1. Click expand section button (triangle) to expand each line item.
  2. Confirm Account is 78640 for line item 1 and 78650 for line item 2.
  3. Confirm each line item contains Amount.

Step 8: Select Hold PO from Further Processing checkbox

Step 9: Attach subcontract to requisition

  1. Click Comments bubble.
  2. Browse for file to attach.
  3. Click Upload.
  4. Add a comment.
  5. Click OK.
  6. Comments bubble should indicate attachments.

REFER TO Training guide Attachments and Comments.

Step 10: Check budget

  1. Click Check Budget.
  2. Click OK to message.
  3. Budget Checking Status should display Valid.

REFER TO Training guide Resolve Budget Check Errors if budget check status is not valid.

Step 11: Save and submit

  1. Click Save & submit.

Confirmation page displays.

 

Appendix-F&A Charges on Subcontracts

What is F&A rate?

F&A stands for Facilities and Administration; it is the abbreviation for the costs incurred by an institution for the use of its facilities and administrative support of research. These are expenses that cannot be identified specifically with a sponsored project or other major function and are in addition to the actual cost to do the research project. F&A costs are sometimes referred to as indirect costs or overhead costs. Examples might be custodial services, building utilities, copy machine usage and administrative support compensation.

A Facilities & Administration (F&A) rate is the percentage rate used to calculate charges to sponsors for the reimbursement of the use of facilities and administrative support. The percentage rate is multiplied against the base dollar amount of actual costs and is listed on proposal budgets to the sponsor. For various federal agencies, a negotiated F&A rate reimburses the University for these indirect costs. Non-federal agencies may or may not apply the same negotiated rate; they may reimburse at a lower rate, by lump sum or not at all depending on the terms and conditions of the proposal. For subcontracts, sometimes there is an agreement to waive F&A reimbursement or the F&A is prepaid at another institution.

How is the F&A rate set?

For federal agencies, the University negotiates a rate every 3 to 4 years to be in place for the next time period.

Why is it important to Northwestern?

It is important for Northwestern to account for the University's own costs contributed to the sponsored research to be able request the most accurate reimbursement rate from federal agencies.

Sometimes F&A reimbursement is waived, meaning sometimes the University does not collect reimbursement for costs incurred for the use of facilities and administrative support. Nonetheless, the waived amount should be a part of the overall calculation when the F&A rate is being negotiated.

How is it related to subcontracts?

In general, sponsors allow institutions such as Northwestern to charge F&A costs for managing subcontracts on grants, but many times, it caps the amount allowed to be charge to the first $25,000 of the direct costs and sometimes the allowance for F&A charges is waived entirely. Even if the charges are waived, it is important for Northwestern to quantify the amount as part of the periodic negotiation for the F&A rate. In NUFinancials, we use account codes divide out the first $25,000 of subcontract direct cost which will earn F&A reimbursement, divide out the remaining subcontract direct cost which will not earn F&A reimbursement and to calculate the waived F&A on a subcontract.

Abbreviation

Full Name

Budget

Expense

A

SUBK<25K

Subcontracts up to $25000

78641

78640

B

SUBK>25K

Subcontracts over $25000

78651

78650

C

SUBWAIVED<25K

Subcontracts with Waived F&A

78643

78642

A word about account codes

When you are setting up a grant subcontract requisition in NUFinancials, on the chart string lines, you should divide the subcontract out by line into different Account codes to distinguish between subcontract costs that F&A can be charged on and subcontract costs above the $25K threshold where F&A cost is not charged. You may need to use a third Account code instead if the F&A has been waived.

Scenario: Subcontract with F&A on first $25,000, remaining amount with no F&A.

Graphic: Account code entry field

Graphic: Multi-line subcontract as seen in Manage Requisitions

There are times when F&A is waived on subcontracts. Northwestern still incurs costs associated with managing the subcontract but we are not reimbursed for the costs.

Scenario: Subcontract with waived F&A on first $25,000, remaining amount with no F&A

These Account codes assist with including waived costs in the calculation of total costs to the University for facilities and administrative support in the future negotiations. Use the chart below to identify the F&A type and the budget code procedure for F&A charges on the subcontract.

To use the budget codes:

Type*

Budget Code Procedure

TDC

Northwestern would normally charge F&A on the entire subcontract, both over and under $25,000. When F&A is waived instead, the entire subcontract amount should be put in the SUBKWAIVED<25K category.

MTDC

Northwestern would normally charge F&A on the first $25,000 and no F&A on the budget $25,000. The first $25,000 should be put in the SUBKWAIVED<25K budget category and the remainder of the subcontract in the SUB>25K category as normal.

TRAIN

Same as MTDC

NOFA

(no F&A) Northwestern would normally not charge F&A on anything. Use the normal SUBK<25K and SUBK>25K categories

MANL

Same as NOFA

STIP

Northwestern would normally not charge F&A on subcontracts. Use the normal SUBK<25K and SUB>25K categories

*Type can be found in NUFinancials by navigating to Grants > Awards > Project Activity. In the F&A Rates tab, review the Funded FA Base.

Graphic: No F&A indication on the Project Activity page