4.4 Expenditure of the Funds
All expenses must meet the funder’s requirements for allowable costs as well as College policies in order to be charged to the grant. For federal grants, these costs must meet federal definitions as to whether they are allowable (see Allowable and Unallowable Charges to Federal Grants). These definitions include guidance on whether costs are:
- allocable to the grant,
- given consistent treatment, and
- allowable as to types or amounts of cost items.
A summary reference sheet will be provided for guidance related to federal grants.
Proper documentation must be included for all grant expenses. Documentation can include purchase orders, invoices, copies of competitive quotes, and justification for selecting a single vendor without competitive quotes. Macalester’s purchasing policies include information on acceptable receipts, reimbursable travel expenses and travel expense documentation, and when to use a purchase order.
The purpose for the expenditure must be clear at the time of the request. Therefore, you should provide justification as part of the documentation that you will complete and submit (invoice, description section of Pcard statement, check requisition, petty cash reimbursement). The justification should include information on who, what, where, why and should reference a budget line. Charges to federal grants which are not sufficiently documented will be disallowed.
As Macalester College is prohibited from contracting with or making subawards to parties that are suspended or debarred or whose principals are suspended or debarred by the federal government, all purchases and subcontracts with a value exceeding $25,000 related to a federal grant will be reviewed in advance to determine possible suspended or debarred standing of the third party vendor (https://www.sam.gov).
Macalester is exempt from the payment of sales tax under Minnesota law on purchases, rentals and leases of goods and services to be used in the performance of its educational functions. The exemption does not apply to purchases of airfare, lodging, rental vehicles or meals. When the College's tax exempt status has not been exercised and sales tax has been incurred, it is an unallowable expense and cannot be charged to a grant. Macalester's Minnesota Tax Exempt Form must be provided to vendors when making purchases.
When charging expenses to the grant, make sure to use the FOAPAL which appears on your Grant Data Form. You can locate the various forms necessary for the expenditure of funds on the Grants Accounting website. A complete list of account codes and descriptions is found on the Business Services website under forms (see expense codes and expense code descriptions). Grants may include a variety of expenses. Always select the most appropriate “account” number using the Expense Code Descriptions document. Information on some of the commonly used expense types is given below. Activity codes can also be used to categorize expenses in Banner according to budget lines. In some cases the use of these codes is required. Contact the Grants Accountant for more information.
The expenses allocated to any sponsored project are reviewed by Grants Accounting before processing to confirm that the expense is consistent with the terms and conditions of the award and to identify that sufficient documentation and justification is provided. One exception to this procedure is Pcard expenses, which are reviewed on a monthly basis by Grants Accounting before the expenses are posted to Banner. If the Grants Accountant determines an expense to be unallowable, the expense will be charged to a College fund.
IRS regulations require employees to submit original receipts for all business expenditures over $75. It is Macalester's practice, though, to request employees to submit receipts for all expenses, even those less than $75. This is because the College must adequately document and attest that no Federal dollars have been used for "unallowable expenses" such as alcohol, personal items, etc. There is no minimum dollar threshold on this accountability, so all receipts are essential. In some situations, receipts may be difficult or impossible to obtain. If you face that possibility, please contact the Grants Accountant for assistance before you travel or make a purchase. Similarly, if you are missing needed receipts, please contact the Grants Accountant for guidance.
In some cases, it may be necessary to request spending on an award in advance of its official start date in which case a Grant Revision Request Form should be completed (see Review/Approval of Grant Changes at Macalester).
You must make all expenditures to the grant before the end date of the grant.
4.4.1 Salaries and Wages
Principal Investigator Salary
Your grant may include a salary for you as Project Director/Principal Investigator. If you are a full-time faculty member, salary will compensate you for work performed during the summer or during a sabbatical leave. In order to receive your salary, contact the Assistant Provost to complete aFaculty Status Form. Keep in mind that your compensation is based on your actual salary rather than the amount budgeted.
The Assistant Provost will approve the payment and send it on to Employment Services so that it can be added to your paycheck(s). Send the request to the Assistant Provost no later than the 10th of the month in which you would like to be paid. Payments must correspond with the actual time worked.
If your grant supports staff, you will either hire an employee new to the College or will add hours to the appointment of a current Macalester employee who performs duties for the grant project as part of an appointment of 1.0 FTE or less. In either case, you must contact Employment Services before any staff are hired or reassigned. To initiate the process, the PI/PD will need to submit a job description and complete a Staff Status Form. Keep in mind that the rates given in your proposal budget represented an estimate. Actual pay scales will relate to job duties and will be determined by Employment Services.
If your grant supports students, contact the Academic Programs and Advising Office (summer) or Employment Services (academic year) to arrange for their employment. The type of payment students receive is determined by the nature of their work and will be decided at the time of proposal submission. Stipend amounts will be in line with standard Macalester stipend rates unless a different rate is specified by the funder. If your grant includes student researchers who will be eligible for summer on-campus housing, contact the Academic Programs and Advising Office.
The Immigration Reform and Control Act of 1986, as amended by the Immigration Act of 1990, requires all employers to verify the identity and employment eligibility of their employees--including students--before they begin working. All students you wish to hire who will be working for the College for the first time must report to the Student Employment Office, 77 Mac, and complete their I-9 Form before the end of their first day of work. Any hours put in prior to the date on which the I-9 Form is completed will be unpaid.
Benefits on salaries and wages will be based on actual amounts regardless of the amount estimated in the proposal budget. If the amount budgeted in the grant proposal for benefits is less than the actual cost of benefits, a portion of the funds to cover indirect expenses may be allocated to cover all actual costs. If the award does not include ?indirects,? Macalester will cover the gap in cost for the benefits.
4.4.3 Payments for Macalester Faculty Participants
Some grants contain a provision for payments to be made to Macalester faculty for participation in grant-related workshops or committees. Payment for participation by full time faculty during the academic year is limited to $3,500 per person, from all grant sources. To have the payment added to the employee’s payroll check, send a Faculty Status Form to the Assistant Provost. Payments may not be added before the participant has completed the activity. Payments are considered salary and must be paid through the payroll system.
4.4.4 Outside Participants and Consultants
If the project includes an independent contractor, their payment will be arranged with a Standard Engagement Contract for Non-Employee Services Form.
Tax or benefit deductions are not made on payments to independent contractors. Payments are considered compensation, and the College sends a 1099 form to the contractor so that the payment is included in the recipient’s annual taxable income. A completed Form W-9, which has been signed by the contractor, should be submitted with the Standard Engagement Contract. Independent contractors cannot be paid in cash.
If a contractor is not a United States citizen or lawful permanent resident and all of the services being performed are outside the United States, then the Statement of Services Performed Outside of the United States Form must be completed by the service provider before payment is made. Macalester will not withhold taxes on these payments or send a 1099 form to these service providers.
Individuals who serve as research participants and receive cash or a cash equivalent for their participation must provide their full name, address, and Social Security Number. Macalester will send a 1099 form to anyone who is paid $600 or more in a given year.
Equipment charged to the grant must be specific to your project. Equipment purchased with federal funds costing less than $5,000 and equipment purchased with non-federal funds costing less than $10,000 should be charged to accounts 700600-700606. Equipment costing $5,000 or more (for federal grants) and equipment costing $10,000 or more (non-federal funds) is considered major equipment and should be charged to accounts 750060-750120.
The College will tag new equipment and perform physical inventories once every year. The Grants Accountant should be notified when equipment is moved from its original location.
Most grants state that title to equipment acquired with grant funds is the property of the College; however in some cases, equipment remains the property of the funding agency. If any questions arise concerning ownership, please contact the Grants Accountant. Equipment cannot be sold, transferred or otherwise disposed of without instructions from the awarding agency. When the equipment is no longer required or usable, the PI/PD must consult with the Grants Accountant about its disposal (See the Equipment Sale/Donation/Disposal Policy).
4.4.6 Supplies (account #s: 700000-700012)
This category includes materials and supplies directly related to the project and should not include general office supplies. Computers purchased as part of a federal grant must be for specific needs related to the project rather than for general use. For federal grants, computers >$5,000 are considered equipment (>$10,000 for non-federal awards). See expense code descriptions for more accounts.
4.4.7 Books (account #: 700501)
Generally books may be charged to your federal grant only if they are specific to the funded project and not available in Macalester?s library (see Allowable and Unallowable Charges to Federal Grants). Contact the Grants Accountant for more information.
4.4.8 Computer Software (account #s: 700604 and 750070)
When purchasing software for your project, please note requests with an estimated acquisition cost >$10,000 are subject to internal review and require completion of the Software Acquisition Review Form.
Food can be associated with travel (704002 or 704202; see below) or with local grant-related activities (700005). Reimbursement will require an itemized receipt. For non-travel associated food charges, the food must be integral and necessary to the project; it should not be for entertainment. In most cases, local food is not allowed on federal grants. Alcohol must not be charged to federal grants. Contact the Grants Accountant if you have questions.
4.4.10 Travel (account #s: 704000-704206)
Travel costs must be separated into domestic and foreign trips. This can be done by using the foreign and domestic travel accounts available in Banner Finance (see the expense code descriptions). Typical costs eligible for reimbursement under a grant include round trip coach airfare, ground transportation, meals, rental cars and lodging. For federal grants, airfare needs to be on a US Flag Carrier. If a US Flag Carrier is not available, further research must be done to identify approved flights. Contact the Grants Accountant for assistance prior to booking travel.
When traveling outside the U.S., please contact the Grants Accountant who can provide tips and tools for you to use when foreign receipts may be difficult to collect.
Reimbursements are based on actual expenses incurred, not per diem rates. However, Macalester is piloting a program in which PI/PD's can request meal per diems for students traveling to meetings or conferences on grant funds. More information is available on the Policies, Guidelines, and Resources page of the Grants Accounting website under Grant Funded Travel Guidelines. Please contact the Grants Accountant if you have questions.
4.4.11 Participant Support
Participant support costs can include stipends, travel, and subsistence. For the costs associated with travel, use the account codes discussed above. Stipends for Macalester employees must be paid through payroll. Non-Macalester participants should be paid using the stipend account (#703202) when completing the Standard Engagement Contract for Non-Employee Services Form. The stipend rates under the participant support category are inclusive of fringe benefits. For federal grants, participant support costs must be separated in Banner Finance. This is accomplished by using activity code 7580 for all participant support costs. Contact the Grants Accountant for assistance.
If your grant includes subawards, it is the responsibility of the PI/PD to oversee the grant expenditures in addition to the research being performed, whether or not those activities are occurring at the College. Invoices from the subawardee institution will be submitted to the PI/PD for approval prior to payment. Invoices should only be approved if the work is satisfactory to the PI/PD. All payments to subrecipient institutions should use account number 717003 and will be reviewed by the Grants Accountant.
4.4.13 Awarded Indirect Funds
Indirect costs are calculated and charged to the grant periodically in association with the reporting cycle. If the investigators/directors are eligible to receive a portion of the awarded indirect funds, these indirect expenses will be placed in a separate Banner fund associated with the specific investigator after the grant has been charged. You will be given the FOAPAL number for the separate Banner fund on the Grant Data Form and can track your balance using Argos. These funds are intended to resemble Faculty Travel Research expenditures for costs of travel, research materials, student research stipends, staff stipends, and similar activities. Requests to use these funds for other purposes must have Line Officer approval. Awarded indirect funds cannot be used to fund faculty salary.