Managing an Award

1. What are the Principal Investigator's general financial responsibilities?
2. Who prepares and sends invoices to the sponsor?
3. How will the sponsor pay the Smithsonian?
4. How can the Principal Investigator issue a subcontract or consulting agreement under an award?
5. Who submits the technical and financial reports to the sponsor?
6. What if the project needs to be changed?

The Principal Investigator is the person ultimately responsible for all of the financial elements of the award. OSP assists with accounting procedures and provides advice on the financially managing the award. The Principal Investigator must ensure that the award is used only for expenses (costs) that are:

• approved by the sponsor
• in the award budget
• allowable

Allowable expenses are:

• reasonable
• necessary for the project
• allocable to the project
• incurred within the award period
• adequately documented
• consistent with the sponsor’s and the Smithsonian’s regulations, including any special conditions in the award agreement

For further information, please see: the PI Guide, chapter ten, “Financial Administration of Award,” and chapter eleven, “Procurement of Goods and Services,” and OMB Circular A-122, “Cost Principles for Non-Profit Organizations.” Please also contact your OSP preaward staff representative.

2. Who prepares and sends invoices to the sponsor?

OSP is responsible for preparing and sending invoices to the sponsor. In general there are two types of awards that require invoices: cost reimbursable awards and fixed-price awards. Under a cost reimbursable award, the sponsor will reimburse the Smithsonian for allowable project expenses (costs) charged to the award. Invoices for cost reimbursable awards are based on the information in the Smithsonian’s official accounting system. Under a fixed-price award, the sponsor will pay the Smithsonian for meeting requirements of the award, such as completing a project deliverable, task, or milestone. Most often invoices for fixed-price awards are based on the Principal Investigator confirming that certain award requirements have been met. OSP will work with the Principal Investigator and the Fund Manager to ensure that the invoices are accurate and submitted on time.

For further information, please see the PI Guide, chapter ten, “Financial Administration of Award,” and contact your OSP preaward staff representative.

3. How will the sponsor pay the Smithsonian?

Sponsors make payments through many mechanisms: check, wire transfer, letter of credit, etc. OSP requests, receives, and processes most payments. If the Principal Investigator or Fund Manager receives a payment from a sponsor, she/he should send the payment to OSP as soon as possible so OSP can process it.

For further information, please see the PI Guide, chapter ten, “Financial Administration of Award,” and contact your OSP preaward staff representative.

4. How can a Principal Investigator issue a subcontract or consulting agreement under the award?

The Office of Contracting (OCon) issues and administers subcontracts and consultant agreements to purchase standard goods and services from vendors. Vendors are organizations or individuals that

• provide the goods and services within normal business operations
• provide similar goods and services to many different purchasers
• operate in a competitive environment
• provide goods or services that are ancillary to the project
• are not subject to the terms and conditions of the award agreement

OSP issues and administers subcontracts and consultant agreements to transfer an integral or substantive part of the project work effort to another organization or individual. In these circumstances, the

• organization’s or individual’s performance is measured against the objectives or goals of the project
• organization or individual is responsible for programmatic decisions
• organization or individual is subject to the terms and conditions of the award agreement

A subcontract or consultant agreement issued by OSP must be described and justified in the proposal, or subsequently approved by the sponsor, and must refer to the prime award.

Contact OSP if subcontracts or consultant agreements are to be issued under the award. OSP will assist with determining whether OCon or OSP should issue and administer the agreements.

For further information, please see the PI Guide, chapter nine, “Program Administration of Award,” and contact your OSP preaward staff representative.

5. Who prepares and sends the technical and financial reports to the sponsor?

The Principal Investigator is responsible for preparing the technical reports, and OSP is responsible for preparing the financial reports. Either the Principal Investigator or OSP may send the reports to the sponsor. OSP will work with the Principal Investigator to coordinate sending the reports to the sponsor. If the Principal Investigator sends a report to the sponsor, she/he should send a copy of it to OSP. OSP maintains the official award file. Auditors review the official award file as a part of required annual audits. Consequently, OSP must have a copy of every report sent to the sponsor.

For further information, please see the PI Guide, chapter nine, “Program Administration of Award,” and contact your OSP preaward staff representative.

6. What if the project needs to be changed?

The Principal Investigator must contact OSP if one of the following elements of the project needs to be changed

• key personnel
• scope of work
• budget
• project period
• report due dates

OSP will review the terms and conditions of the award to determine if the sponsor needs to be contacted. OSP will coordinate contacting the sponsor and requesting approval for the changes.

For further information, please see the PI Guide, chapter nine, “Program Administration of Award,” and contact your OSP preaward staff representative.