March 9, 2012
SUPERSEDES: GIM 34 (Revised January 2005)
External support may be awarded under a wide variety of labels, including grants, contracts, subcontracts, purchase orders, funded collaboration agreements, master agreements, clinical trial agreements, consulting agreements, testing agreements, service agreements, task agreements, basic ordering agreements, corporate affiliate partnership programs, and other similar mechanisms.
This GIM describe the policies and standards used by the University for classifying external support as either a sponsored project or a gift. These guidelines also identify the appropriate administrative procedures for accepting and processing external support. Correct classification of external support assures the University’s ability to: (i) comply with requirements specified by the sponsor or donor; (ii) satisfy State of Washington reporting requirements; (iii) properly recover its costs, both direct and indirect; (iv) comply with Government Accounting Standards (GASB) and Financial Accounting Standards Board (FASB), Internal Revenue Service (IRS) and other financial reporting standards, and (v) assure compliance with applicable laws, regulations and University policies. This GIM is to be used to determine the proper classification of external support by all University campuses, colleges, schools, departments, and administrative units.
The Governmental Accounting Standards Board (GASB) establishes generally accepted accounting principles (GAAP) for state and local governments. The Financial Accounting Standards Board (FASB) sets financial accounting standards for nongovernmental entities. The standards for both vary due to the organizational differences between government and nongovernmental entities. As a governmental unit, with a nonprofit Foundation established, the University must determine external funding as a sponsored project or a gift in order to properly spend, track, report, and account for external funding. Likewise, determination of the funding is necessary due to accounting and reporting standards for sponsored project funding, including the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance).
Faculty, Staff, Office of Sponsored Programs (OSP), Advancement Services, Grant and Contract Accounting (GCA), the University Foundation, Internal Audit
Final determination of the classification of external support as a gift or sponsored program is made by the Assistant Vice Provost for Research and Director of the Office of Sponsored Programs in consultation with the Associate Vice President for Advancement Services. Classification of external support is an internal University administrative decision based on information conveyed to the University by the support source and the University operating unit after applying relevant legal and accounting principles.
The term “grant” does not determine the classification of an award as a sponsored project or gift. Some grants may be classified as philanthropic gifts (for example, a donation from a tax-exempt foundation that is operating a charitable giving program). Grants may also be awarded by a government or private organization and may be classified as “exchange transactions” (for example, grants from the National Institutes of Health, the National Science Foundation or a commercial organization). Grants requiring contractual performance commitments from the University may also come from certain charitable foundations, but must be processed through the Office of Sponsored Programs. Even though the donor is philanthropic in nature, the award itself may contain performance contractual terms and conditions requiring its classification as a sponsored project.
A sponsored project is any exchange transaction between the University and the sponsor that may occur in a number of forms. A University sponsored project is not a purchase or sale of goods or services or “work for hire” arrangement but instead is a mutual exchange involving the University and a sponsor. Sponsors may provide funding, equipment or other tangible items, such as goods or services, for research, training, education programs, analytical services or other rights or goods.
A project receiving either direct or indirect external support from any federal, state, local, foreign, or other governmental entity shall be classified as a sponsored project.
A project receiving external support from any entity other than a governmental entity shall be considered a sponsored project if the University is subject to any of the following:
The Office of Sponsored Programs reviews and processes sponsored projects.
A gift is the voluntary contribution of external support by a donor to the University, without any requirement for receipt of any economic or other tangible benefit in return beyond what any general member of the public would receive. The contributor of a gift is referred to as the “donor” and the donor’s intent must be philanthropic or charitable. The primary beneficiary of a gift is the general public and not the donor.
Gifts may be either unrestricted or restricted. A restricted gift does not imply that the donor benefits from the gift nor is there an implied quid pro quo. Valid restrictions pertain to the permitted use of gift funds rather than providing a result to the donor. Gifts shall normally meet the following criteria:
The University Advancement Office reviews and processes gifts.
Inclusion or exemption of F&A costs assessments shall not be a basis for determining whether an award is classified as a sponsored project or gift. Documentation stating the purpose and terms associated with a specific award, the award letter or notification and the proposal are required before any gift or sponsored project may be accepted and expended.
Exceptions to these policies and guidelines may be granted by the Assistant Vice Provost for Research and Director of OSP in consultation with the Associate Vice President for Advancement Services.
All regulatory requirements with respect to the conduct of research and other compliance matters must be followed regardless of whether the support is processed as a sponsored project or a gift, including but not limited to, Institutional Review Board for the Protection of Human Subjects, Institutional Animal Care and Use, Radiation Safety, Biosafety, and Disclosure of Significant Financial Interests.
A gift may be used as a match or for cost sharing in support of a sponsored project unless otherwise restricted by the donor of the gift or the sponsor of the project. In such instances, the gift funds may become held as restricted funds, e.g. when matching federal funds, gift funds must be accounted for as if they were federal funds.
In order to review a proposal for sponsored funding, or funding that has arrived that is determined to be sponsored project funding, OSP must receive the proposal package and/or award document via an eGC1. The eGC1 is an internal compliance form that documents details about the proposed use of the funding, associated compliance areas that may impact the project, budgetary information, personnel information, and required assurances for OSP review.
More information on how to begin and route an eGC1 is available on the OSP website.
Gift Processing processes all gifts to the University of Washington, the UW Foundation, and its agencies (Harborview Medical Center, Henry Art Gallery, and the Law Foundation). Team members maintain donor and gift records in the Advance database and generate donor receipts. The Gift Processing department also creates, communicates, and clarifies gift policy to donors, faculty and staff.
In order to process a gift, a gift transmittal form must be sent with the gift for processing.
Expenditures from gift accounts must comply with all applicable University policies, including but not limited to the Institutional Review Board (IRB) for the Protection of Human Subjects, Institutional Animal Care and Use Committee (IACUC), Radiation Safety, Biosafety, and Disclosure of Significant Financial Interests.
Occasionally, a single support source may seek to provide concurrent support for both a gift and a sponsored project for a similar program or project. Both Advancement and OSP will mutually determine whether this concurrent support is appropriate and will assure the proper division of the support in accordance with GIM 34.
A proposal initially prepared and classified as a gift that subsequently is found to contain disqualifying terms and conditions relating to the use of the support may require reclassification of the support as a sponsored project and the external funding will be transferred to the Office of Sponsored Programs for review and processing.
|Financial accounting standards for nongovernmental entities||FASB|
|Generally accepted accounting principles (GAAP) for state and local governments||GASB|
|Cost Accounting Standards for Sponsored Projects||CAS 502|
|Uniform Administrative Requirements, Costing Principles & Audit Requirements for Federal Awards||2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance|
|Sponsored Project Administration||OSPfirstname.lastname@example.org||(206) 685-8911|
|OSP and Advancement|
|Amendment No.||Date Amended||Purpose||Who/Title|