Gifts, Grants, Contracts and Sponsored Projects—Awards Defined

Awards may come to the University in many forms: Gifts, Grants, Contracts or Sponsored Projects. Each type of award has different fiscal and legal responsibilities—both for the University and for the Project Director—attached to it. Here are the standard definitions, taken from the Council for Advancement and Support of Education (CASE www.case.org —the commonly accepted reporting standards for Colleges and Universities. If you have any questions about a project or award, please contact the Grants Office/UDO (MurrayW@newschool.edu).

Gifts & Grants: What is the Difference?

A GIFT is defined as any money from private sources, whether solicited or not, for which the donor does not retain any reversionary interest or cannot be expected to receive any material, unique, or preferential benefit from the act of donating funds. This definition follows guidelines established by the Internal Revenue Service as well as practices of other universities and nonprofit organizations. A gift is further defined as a contribution received by an institution for either unrestricted or restricted use in the furtherance of the institution for which it has made no commitment of resources or services other than, possibly, committing to use the gift as the donor specifies.

A “gift” is usually from an individual. The contribution is a nonreciprocal transfer in that there is no implicit or explicit statement of exchange, purchase of services, or provision of exclusive information. If the donor receives benefits in return for the contribution, the amount of the gift recorded and reported is reduced by the fair market value of all benefits given, according to U.S. Internal Revenue Service regulations. The institution has no obligation to report to the donor how the gift is used or invested, but institutions are not prevented from providing such reports as part of donor stewardship and an institution may determine that what a donor calls a grant is, for internal record-keeping, a gift.

A GRANT is an award of funds received by an institution for either unrestricted or restricted use in the furtherance of the institution that typically comes from a corporation, foundation, or other organization, not an individual. Grants are the customary means of funding research, testing, and prototyping; for this reason, they are discovery-oriented rather than outcome-oriented. In the case of grant-funded scientific research, for example, the outcome of a scientific experiment cannot be guaranteed, and a negative result is no less desirable than a positive one. The terms of the award will usually require some kind of report—narrative, financial or both. The relationship between a sponsor and a grant recipient has not explicitly been defined by law; however, a grant should be treated with the same respect as a contract. A grant generally is construed to allow greater discretion than a contract in the conduct of the research and to provide less specificity in the definition of the intended outcome of the research.

Non-specific “Grants” that come from institutions—family or community foundations, for example—but where the money is actually controlled or directed by an individual or specific group of individuals are usually treated as GIFTS. However, if the grant comes from such an institution and the University commits resources or services as a condition of the grant, and the grantor requests an accounting of the use of funds and of results of the program or projects undertaken, it is properly considered a GRANT.

Contracts: An Agreement Based in Law

A CONTRACT is an agreement that has been defined by law as being between the institution and another entity to provide an benefit for compensation. The agreement is binding and creates a quid pro quo relationship between the institution and the entity. ( Note: This definition is not intended to address gift annuity contracts or similar charitable instruments.) A contract is a legal document and requires the delivery of specific goods and services according to an agreed-upon deadline.

Sponsored Projects

Sponsored projects are established when grants are awarded to the University by external institutional sources in support of research, instruction, training, or service under an agreement that includes any one of the following:

• The award instrument is an agreement that binds the University to a set of terms and conditions and requires endorsement.
• The agreement obligates the investigator to a line of scholarly or scientific inquiry that typically follows a plan, provides for orderly testing or evaluation, or seeks to meet stated performance goals. The agreement establishes an understanding of how funds will be used or includes a line item budget that identifies expenses by activity, function, or project period.
• The agreement requires fiscal accountability as evidenced by the submission of financial reports to the sponsor, an audit provision, or the return of unexpended funds at the conclusion of the project.
• The agreement creates an obligation to report project results or dispose of tangible or intangible properties resulting from the project. Examples of tangible properties include equipment, records, technical reports, theses, or dissertations. Intangible properties include rights in data, copyrights, or inventions.
• The agreement seeks considerations such as indemnification or imposes other terms that require legal accountability.

Grants and Sponsored Projects are both charged indirect costs, whether identified in the award or not, unless the funding agency has a written policy that precludes such recovery and the University has accepted the award with this restriction. The applied indirect cost rates will be consistent with University policy – please refer to Section III, 3.1 for details of this policy. The Executive Vice President, after consideration of the proposed award, may choose to accept an alternative indirect cost arrangement. No agreement is binding upon the University unless endorsed by Executive Vice President.

How Can I Tell the Difference Between a Grant & Contract?

Generally, the essential difference in the grant vs. contract question is control. Who has control over the project's activities and outcomes. Is there compensation involved, i.e. are we or someone else being paid to deliver something? Who owns the results of the work?

Grants
A grant to an investigator/university is generally made without formal stipulations as to the direction of the research/project, except in accordance with the proposal submitted. Payment is generally made to the university in advance and the university can expect:

- No limits on publication
- Ownership of intellectual property
- No transfer of results to the sponsor
- Usually, though not always, no confidentiality agreement is necessary.

Spending may be flexible, i.e. amounts budgeted on one expense line may move to another with little or no permission needed.

Payment is usually without a requirement for deliverables, but may have stipulations, such as interim reports in multi-year projects.

Contracts
A contract is legally binding and has three major elements: offer (what is going to be done, i.e. the statement of work), acceptance (a formal acceptance, including specific names of responsible parties) and payment (the amount agreed upon for the specific outcomes as defined in the SOW). In the case of a research contract, the sponsor agrees to finance an investigator to do - and often complete - research under written terms and conditions.

Freedom within the project will be constrained. The nature of the work may not be altered without permission. Spending must correspond to the agreed budget. Funds are often attached to a specific outcome and can be retracted for failure to deliver. Publication may be deferred or require the approval of the sponsor for some time.

You will often be required to sign a confidentiality agreement, especially if the sponsor is allowing you access to proprietary data or knowledge. Ownership of intellectual property has to be negotiated and usually ends up with the sponsor.

Payment is usually on a fixed schedule and the acceptance of deliverables may be required – failure to meet the deliverables may result in legal action or money being returned (if payments prior to final acceptance are part of the contract).

Government grants are often structured like contracts and are usually treated as such for accounting purposes.

If there are questions about determining the difference, please contact the Grants Office (MurrayW@newschool.edu) for further explanation.

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Preparing and Submitting Your Proposal: University Policies and Procedures

In order for the University to accept legal and fiscal responsibility for an award (a requirement of many, if not all, external funders) the project must first be authorized at various levels of the University. This authorization process is facilitated and monitored by the Office of Grants & Sponsored Projects/UDO. All of the necessary forms and templates can be accessed via the FORMS & TEMPLATES link to the left. Please call or email the GRANTS OFFICE (MurrayW@newschool.edu) for assistance or if you have questions.

Proposal Initiation

Before you initiate the official authorization process, you should discuss your project with your Department Chair and Dean before proceeding. Significant projects that impact the University's programs and academic mission must be reviewed by the Office of the Provost as well as your Dean . Grant proposals, in effect, constitute an offer by faculty or staff to perform specified tasks for an outside funding agency and it is extremely important that all proposed commitments are carefully evaluated in consultation with the appropriate divisional and University officials. If the project receives a green light, you should contact both your divisional development office and the Grants Office/UDO . Your Development Office and the Grants Office can:

• Answer your questions about Grants, Contracts & Sponsored Projects
• Provide prospect research to identify potential funders
• Support grant proposal writing/development
• Assist with budget preparation
• Identify potentially useful relationships
• Coordinate the entire submission process, including internal authorizations and endorsement letters

Internal Authorization

In addition to academic review, the internal authorization process necessitates addressing several University requirements and securing the appropriate signatures. All forms are found at FORMS & TEMPLATES, or contact the Grants Office (MurrayW@newschool.edu) directly.

The Proposal Authorization form requires you to address the following University requirements on:

• Project-related expenses, including Personnel and Other Than Personnel (OTP) Direct Costs.
• Indirect recovery
• Project space requirements

The signatures required are:

• Project Director
• Divisional Budget Director
• Divisional Dean
• Office of Grants & Sponsored Projects
• Senior Vice President of Development
• Executive Vice President & COO

Many funders also require that an official of the University sign the application or proposal itself. This signature must be the Executive Vice President, who is the “authorizing official” of the University.

The Project Director is usually responsible for submission once the authorization has been received, but the Grants Office will be pleased to assist where needed.

Please be aware that any proposal submitted without the proper authorization may be refused by the University if awarded. In the instance that a proposal has been submitted without appropriate authorization, the authorization process must still take place and all of the above requirements met.

Allow five business days to process the form.

Budget Preparation & Requirements

Contact your divisional Budget Director or the Grants Office for assistance in developing your grant budget so that it adequately covers projected costs related to the grant proposal including indirect costs and fringe benefits. The budget is the most significant part of the proposal—no amount of compelling narrative will make up for an inadequate budget! Your proposal budget may reflect all or part of the total cost of your project, but it should be realistic—not only as to the project's costs, but as to the cost of the project to the University! Some points to consider:

• Direct salaries—management, administrative, support, summer salary
• Fringe benefits—use the Grant Fast Facts to determine the appropriate fringe rate, or contact your divisional budget office
• Indirect rates
• Cost sharing
• Revenue, including other external support
• Space needs
• Equipment
• Communication expenses, including public relations, advertising, etc.
• Travel, per diem, honoraria, etc.
• Contracts, Subcontracts, Subawards

The Grant Fast Facts will provide you with rates, identifying numbers, the formula for calculating Summer Salary, etc. Please refer any questions to the Grants Office or your Divisional Budget Director.

Indirect Cost Recovery: University Requirements

Private Funding or Sponsoring Agencies/ Institutions
The indirect cost rate of 15% should be applied to the entire direct cost of the project and listed as an indirect cost line item. It should be indicated that this indirect cost rate is in accordance with New School University policy, as required. Some private institutional funders will not allow any indirect to appear as a line item, or will only accept a lower rate . Please contact your Budget Director or Grants Office to discuss this issue when it occurs as it must be addressed during the authorization process. Other terms for indirect recovery are administrative costs, overhead, etc.

Public Sponsoring Agencies or Institutions
You must calculate indirect costs for all direct salaries and wages (including vacation, holiday, sick pay, and other paid absences but excluding all other fringe benefits) for federal projects.  You must apply a different indirect cost rate to salaries and wages paid out in different fiscal years.  For salaries and wages paid in fiscal year 2008 (7/1/07 to 6/30/08), the rate is 56%.  For salaries and wages paid in fiscal year 2009 (7/1/08 to 6/30/09), the rate is 58.4%.  These rates have been negotiated between The New School and the Department of Health and Human Services, and they are valid with all federal grants where applicable. Some grants, notably dissertation support, will not allow indirect recovery at all; in addition, some awards may allow only 8% recovery—this 8% is still applied to direct salaries and wages. Always use the rates listed above unless specifically told not to. For municipal or state projects, review the guidelines of each funding agency to determine what is acceptable to them.

Hiring and Compensation Matters

Please work with your Budget Director to determine appropriate salary expenses, including fringe, for your project. Human Resources can also assist you in and can help manage the search process for new employees once the grant is awarded.

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Grant-related Contracts and Subcontracts

General Information

Grant-Related Contracts and Subcontracts fall into two general types: awarded to New School or by New School . For example, another University/Non-profit Institution may receive an award or contract and wishes us to perform work on that project. Or, New School University may have received an award and wishes to outsource project work thus necessitating a subcontract. Finally, it may be necessary to have a vendor supply goods or services in order to accomplish the goals of an externally funded project.

Because of the complexity of contractual agreements, particularly with federal awards, it is advisable to contact the Grants Office as soon as possible—starting with the proposal stage— in order to assure a clear understanding of the responsibilities involved to all parties: the project director, the University and the other parties involved.

Some institutions – the United Nations, for example— issue contracts or “funding agreements” for projects that would otherwise be considered grants—please contact the Grants Office for clarification as needed in these circumstances.

Due to the complexities and legal requirements involved, it is preferable to receive a grant award instead of a contract.

Authorization Procedures for Contracts & Subcontracts

All grant-related contracts and subcontracts need to be processed using three steps after having been authorized at the Divisional Level : The Grants Office, The Office of General Counsel and the Office of the Executive Vice President . All such instruments must be registered or drafted in the Grants Office, examined and authorized by the Office of General Counsel and signed by the Executive Vice President. Any agreement not signed by the Executive Vice President is NOT legally binding on the University. There are no exceptions to this rule.

The following chart will clarify the procedures:

Master Subcontracting Agreement with the Federal Government

The University has signed a Master Subcontracting Agreement. Copies of the agreement are available from the Grants Office.  The agreement mandates that subcontracts under federal awards and contracts be made available to certified small businesses, women-owned businesses, minority-owned businesses, veteran-owned businesses, and other specifically identified groups.  Please contact the Grants Office for further information.

Government and Private Awards Compared

Government awards (grants or contracts for federal, state and city agencies) have the most rigorous requirements often requiring competitive bidding for subcontracts, monitoring, recordkeeping and adherence to allowable cost and federal audit standards. The Grants Office can answer your questions or refer you to the Office of General Counsel, if needed.

Under federal guidelines, an awardee/contractor may issue subawards to subrecipients (government entity, college, university, or non-profit organization) and subcontracts to vendors (competitive providers of goods and services) provided that all requirements are adhered to—such awards or subcontracts may be subject to government approval and are definitely subject to government oversight. Federal law is the controlling authority.

If New School is the awardee/contractor then the responsibility for both its own and the subrecipient's/subcontractor's compliance rests primarily with The New School, with the partner bearing responsibility as well. Standard contract clauses flow down to the subcontract from the prime contract. Conversely, if New School is the subrecipient, although the prime responsibility does rest with the prime awardee/contractor, New School is responsible for adhering to the flow down clauses of the original prime contract.

Private subcontracts, whether issued by a prime grantee to New School, or issued by New School as the prime grantee to another institution/individual with grant money received are subject to the legal standards set for contract law, i.e their provisions are legally enforceable in the courts—usually as a civil matter in state court.

Both government and private grant-related subcontracts must be processed through the Grants Office for authorization by the Office of General Counsel and Executive Vice President. There are no exceptions to this – no instrument may be signed by anyone other than the Executive Vice President.

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Award Administration and Compliance

Forwarding Award/Decline Letters and the official Notice of Award

Please forward all award/decline letters to the Grants Office/UDO. The Grants Office/UDO will issue and official AWARD NOTICE to notify relevant parties of the award—it is this NOTICE that triggers the official entry of the award into the University systems. The AWARD NOTICE is routed to the Dean, Project Director, Divisional Budget Director, Development Office, Accounting, the Budget Office and any relevant parties along with appropriate documentation. . A new account will NOT be created by Accounting unless the Grants Office issues the Award Notice and the Award Notice will NOT be issued unless there is satisfactory confirmation of the award.

Institutional Authorization of Award Letters, Letters of Agreement, and Contracts/Sub-Contracts.

Award letters and Letters of Agreement requiring a signature must be authorized by the Office of the Executive Vice President. Such instruments MUST be sent to the Grants Office for processing; the Grants Office will have the award or other document signed by the appropriate official and return the signed agreement to the granting agency with a copy to the Principal Investigator and the appropriate administrative offices.

Contracts should also be forwarded to the Grants Office. Contracts or Sub-Contracts must be reviewed by the Office of the General Counsel—no exceptions will be made . No contract/sub-contract will be signed without the authorization of the General Counsel's Office. You may request the assistance of the Grants Office in drafting contracts and sub-contracts-see Grant Related Contracts, Subcontracts & Awards above. All contracts/subcontracts will be forwarded by the Grants Office to the Office of General Counsel . After review and approval, the contract or sub-contract will be forwarded to the Office of the Executive Vice President for signature. The contract/sub-contract will then be returned to the Grants Office for submission to the parties to the contract. Please contact the Grants Office if you have questions about this procedure.

Acknowledgment Letters

For private grants, it is strongly recommended that you and/or your Dean write a thank-you letter to the granting agency’s awarding program officer. The Office of Development will automatically respond to the granting agency with an official University Acknowledgment Letter from the President.

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Grant Accounting

Restricted Account Creation

All award letters and agreements must be forwarded to the Grants Office prior to opening a new university account—only official Notice of Award from the Grants Office will trigger the creation of a new account. It is the Principal Investigator or Project Director's responsibility to arrange for the creation of a restricted account for the grant through the divisional Budget Director—the Grants Office will coordinate with the Accounting Office and the Divisional Budget Office to ensure prompt creation of the account.

Financial Management

Financial record-keeping is the responsibility of the Principal Investigator and the Divisional Budget Director . Consult your divisional Budget Director about keeping expenditure records in a format that will help you meet your reporting requirements.

The Senior Grants Accountant (John Valetta, 212.229.5660 x3682, valettaj@newschool.edu) can assist you in financial reporting to granting agencies. However, since you are responsible for filing all reports, you should maintain a complete file documenting the financial management of your grant.

It is the responsibility of the Principal Investigator to manage grant funds properly, and the responsibility of the appropriate Dean to oversee grant expenditures.

Award Payments

Checks from the granting agency are sent to the Accounting Office (80 Fifth Ave., 4th Fl.) or to Katherine Hutter, Director of Advancement Services (79 Fifth Ave., 17th Floor).

The Accounting Office will credit the funds to the appropriate grant account.

For government grants payment will be requested as a reimbursement for actual expenses – no advance payments are made, except in certain pre-defined circumstances. The Accounting Office handles such payment requests.

For contracts and subcontracts, payment is usually made by scheduled invoice or upon satisfactory acceptance of deliverables as specified in the countersigned contract or subcontract.

Issuing Payments for Project Expenses

Your Budget Director will assist you with payments and can provide you with the necessary forms, including Check Disbursement Forms or Payroll Authorizations. Use the appropriate restricted account number on all forms necessary for the management of the grant.

The Dean or the Associate Dean of your division must countersign all forms submitted to the Accounting Office for payment.

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Grant Reporting

Report Preparation

The Principal Investigator or project director is responsible for preparing all interim and final reports.

Granting agencies generally require both narrative and financial reports for each reporting period. Reporting guidelines are outlined in the award letter or grant agreement. In most cases, the granting agency provides specific financial reporting deadlines and guidelines. Note that these guidelines may differ from the University accounting format. Some reports require the signature of a Financial or Authorizing official of the University—see Report Authorization and Submission, below.

Consult your divisional Budget Director about keeping expenditure records in a format that will help you meet your reporting requirements.

Report Reminders

It cannot be overstated that timely report submission is integral to good award administration and impacts both the University's academic reputation and future funding potential. The Grants Office sends out reminders about due dates at regularly scheduled intervals. PIs, Budget and Development Directors will receive emails at 30, 15 and 1 day prior to date due intervals. If a report is not submitted on time, the Grants Office will contact relevant parties to determine if an extension is required, or if further action on the part of the University is required. If an extension is required, or if any compliance problem arises, please do not hesitate to contact the Grants Office to facilitate a solution as soon as possible. If an extension is obtained by anyone other than the Grants Office, please notify the Grants Office so that our records and reminder schedule may be adjusted.

Report Authorization & Submission

Reports must be authorized in the same way as proposals are. Submit your report with the Grant Report Authorization Form, available at FORMS & TEMPLATES, signed by the Project Director, Divisional Budget Director and Dean to the Grants Office for processing. Also note that some funding agencies require the report itself be signed by an Officer of the University. Prior to submission to the grant-making agency, all reports must be reviewed and counter-signed by the University officers listed on the routing form. Note the following:

Allow at least five full working days to complete the routing process.

Someone in the Grants Office will contact you once the report is approved and inform you of any changes that need to be made prior to submission.

You are responsible for submitting the report to the granting agency and for providing a copy of the final submitted version to the Grants Office. A copy of the signed routing form will be sent to you for your files.

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