National Science Foundation 

Division of Institution & Award Support 

Updated: June 2005

Post Award Monitoring & Business Assistance Program Site Visit 

Review Guide 

This document, Site Visit Review Guide, is a component of the BFA Award Monitoring and 

Business Assistance Program (AMBAP). It is prepared at the trainee level to provide detailed 

guidance on how to prepare for an On Site Post Award Monitoring and Business Assistance 

(Advanced Monitoring) visit, conduct the review, prepare the NSF report, and prepare the 

letter that will be sent to the NSF awardee institution after the review is completed. It applies to 

all NSF awards excluding contracts and awards specifically covered by the Facilities 

Management and Oversight Guide 

The AMBAP reviews assess awardee capability, performance, and compliance against the 

applicable elements that make up each award. For example, 

o Administrative regulations and public policy requirements; 

o Special and general terms and conditions, including those contained in the NSF program 

announcement/solicitation and grant or cooperative agreement; and the award letter. 

This document defines the roles and responsibilities of BFA employees assigned to award 

monitoring activities and identifies core and targeted review areas. On-site review modules are 

included in the guide for each core and targeted review area. Each review module contains five 

sections as follows: 

o Introduction 

o Reference Documents 

o Objective of Review 

o Areas of Concern 

o Detailed Procedures 

Procedures in the modules are to be used by all staff members who conduct on site post award 

monitoring and business assistance reviews. This will ensure equitable treatment of all NSF 

awardees and consistent data collection. This consistent, equitable approach will assist NSF in 

using information to benchmark existing practices, establishing new policy, and evaluating 

employee performance. 

This document is to be used in conjunction with other NSF policy and procedure documents 

such as the Grant Policy Manual (GPM), the Grant General Conditions and FDP General Terms 

and Conditions. The latter two documents contain detailed information on the terms and 

conditions of NSF awards with references and links to OMB circulars and NSF on-line guidance 

located at: http://www.inside.nsf.gov/bfa/dias/policy/start.htm. 
2

National Science Foundation 

Division of Institution & Award Support 

Post Award Monitoring & Business Assistance Program Site Visit Review 

Guide 

Table of Contents

Page 

I. Roles and Responsibilities.........................................................................................................4 

II. Pre-Site Visit Activities and Procedures.....................................................................................6 

Award Monitoring Site Review Content................................................................................... 8 

Award Documentation............................................................................................................. 9 

Consultation with Program Officials ...................................................................................... 10 

Preparation for Entrance and Exit Meetings ......................................................................... 11 

Site Visit Planning ................................................................................................................. 12 

III. On-Site Review Modules

 Core Review Modules: 

General Management ........................................................................................................... 13

Accounting and Financial System Review ............................................................................ 15 

FCTR Reconciliation ............................................................................................................. 18 

 Targeted Review Modules:

Time and Effort Records for Personnel................................................................................. 21 

Fringe Benefits...................................................................................................................... 26 

Travel .................................................................................................................................... 28 

Consultants ........................................................................................................................... 31 

Cost Sharing ......................................................................................................................... 33 

Participant Support Costs ..................................................................................................... 36 

Indirect Costs ........................................................................................................................ 38 

Procurement.......................................................................................................................... 41 

Sub-awards & Sub-recipient Monitoring................................................................................ 43 

Property & Equipment...........................................................................................................48 

Final Project Report .............................................................................................................. 51 

IV. Post Site Visit Activities............................................................................................................53

Site Visit Report Review Process.......................................................................................... 53 
3

Monitoring Follow-Up ............................................................................................................ 53 

V. Correspondence Appendices

Appendix A - Site Visit Notification Letter (For Use Beginning in FY 2006) 

Appendix B - Site Visit Confirmation Letter......................................................................... 54 

Appendix C - Site Visit Report ............................................................................................ 56 

Appendix D - Post Site Visit Letter...................................................................................... 58 

Appendix E - Delinquency Letter ........................................................................................ 60 

VI. Worksheet Appendices 

Appendix 1 - DGA / CAAR Consultation............................................................................ 61 

Appendix 2 - Program Office Consultation ........................................................................ 63 

Appendix 3 - Pre-Visit Risk Assessment ........................................................................... 64 

Appendix 4 - Entrance Conference.................................................................................... 65 

Appendix 5 - Exit Conference............................................................................................ 66 

Appendix 6 - Award Brief................................................................................................... 68 

Appendix 7 - FCTR Reconciliation..................................................................................... 70 

Appendix 8 - General Management Survey....................................................................... 71 

Appendix 9 - Accounting System Survey........................................................................... 73 

Appendix 10 - Cost Sharing Reconciliation ......................................................................... 75 

Appendix 11 - Expenditure Testing & Verification ............................................................... 76 

Appendix 12 - Participant Support ....................................................................................... 77 

Appendix 13 - Workpaper Index .......................................................................................... 78 

Appendix 14 - Follow Up Form ............................................................................................ 79 
4

Post Award Monitoring and Business Assistance Program Site Visit Review 

I. ROLES AND RESPONSIBILITIES

The Division of Institution and Award Support (DIAS) is leading the Award Monitoring and 

Business Assistance Program (AMBAP) effort within the Office of Budget, Finance, and Award 

Management (BFA). DIAS will collaborate with other NSF divisions, particularly with the 

Division of Grants and Agreements (DGA), the Division of Contracts and Complex Agreements 

(DCCA) and the various program divisions when developing and planning on-site financial, 

administrative, and business assistance reviews. 

Implementation and Oversight 

Within DIAS, the Cost Analysis and Audit Resolution (CAAR) Branch Chief, the Special 

Assistant, and the Team Leader for Monitoring will have principal responsibility for overseeing 

the award monitoring and business effort. Working together, these senior advisors will develop 

the annual review schedule and consult with DGA management to staff the reviews. 

The CAAR Branch Chief serves as the principal resource for BFA staff members for advice and 

guidance in the performance of reviews and any follow-up deemed necessary. The CAAR 

Branch Chief monitors the annual schedule to ensure that reviews are taking place and reports 

the status of the award monitoring activity to BFA senior managers. 

The Special Assistant will perform the annual risk assessment and coordinate the annual 

outreach to the program divisions. 

The Team Leader for Monitoring will review all post award monitoring and business assistance 

reports and files for consistency and compliance with the Guide. The Team Leader for 

Monitoring, working with the CAAR Branch Chief, will establish the dates for the on site reviews. 

In addition, the Team Leader for Monitoring will maintain the following: 

• A database indicating the status of each visit, review team members, status of the 

reports and correspondence, and initial follow-up. 

• A notebook of site visit reports and post site visit letters issued each fiscal year. 

• A file for each Post Award Monitoring & Business Assistance review performed that 

includes supporting documentation. 

Post Award Monitoring and Business Assistance Program Site Visit Review Teams 

Teams of two to four BFA staff members typically conduct a Post Award Monitoring and 

Business Assistance review. The standard team configuration is a Cost Analyst serving as the 

team leader of the site visit review team and a Grant and Agreement Specialist. Additional team 

members may be other CAAR Cost Analysts or DGA Grant and Agreement Specialists serving 

in a training capacity. As appropriate, a Program Officer may accompany the team as a 

technical representative. 

The CAAR Cost Analyst

The CAAR Cost Analyst is the leader of the site visit review team; this includes making the final 

decision with regard to which targeted areas will be addressed. The cost analyst is responsible 

for reviewing the CAAR file and bringing any significant concerns or issues that should be 

addressed during the site review to the attention of the Grant and Agreement Specialist and 
5

other team members prior to the visit. The cost analyst has responsibility for leading the 

discussion and conducting the review while on site including reviewing relevant data. The cost 

analyst also has responsibility for writing the site visit report (a template for the report is included 

under Appendix B) and drafting the post site visit letter (a template is provided under Appendix 

C) for the Grant & Agreement Specialist’s signature. The cost analyst will also ensure that all 

NSF individuals listed as receiving copies of the site visit report and the post visit letter receive 

their copy. 

The cost analyst will work with the grant specialist to ensure that any follow-up issues are 

resolved. 

The cost analyst will rely on the grant technician to prepare travel orders, assist with travel and 

logistical arrangements, and work with the DIAS Administrative Officer with regard to the 

budgetary aspects of travel. 

The Grant and Agreement Specialist

The Grant and Agreement Specialist is responsible for ensuring that the pre-visit activities are 

managed appropriately. Pre-visit activities include the following: 

• Gathering data and files 

• Performing a desk review of appropriate information in the award files 

• Making appropriate arrangements for the review team to meet with the program staff 

• Filling out Appendix 2, Program Office Consultation

• Making timely contact with the awardee organization to set up the parameters for the site 

visit 

• Sending a confirmation letter to the awardee organization articulating what will be 

reviewed and requesting that the awardee provide any necessary pre-visit 

documentation in a timely manner (a sample letter is provided under Appendix A) 

• Sharing observations and concerns gathered from the desk review with other team 

members prior to the visit 

The DGA specialist plays a key role as a participant in the site visit. They are responsible for the 

discussion of the terms and conditions of the award, as appropriate, and will serve as the scribe 

during the on-site meetings. 

After the visit, the specialist is responsible for reviewing the draft post site visit letter provided to 

them by the Cost Analyst. Once the specialist and analyst agree on the letter’s content, it 

should then be signed and sent to the awardee (a sample letter is provided under Appendix C). 

If the post site visit letter articulates any issues requiring follow-up with the awardee, the 

specialist should monitor the situation to ensure that the awardee responds to the letter within 

30 days. The specialist must provide a copy of the awardee’s response to the cost analyst. 

The specialist will work with the analyst to determine whether the response is sufficient and 

adequate. 

If the awardee does not respond within 30 days, the specialist should place a call to the 

awardee requesting a written response within 10 days. If there is still no response, a 

delinquency letter should be mailed to the awardee (a sample letter is provided under Appendix

D). 

The specialist assigned by DGA must be available to travel on the dates established by CAAR 

for the on-site review. DCCA and DGA are responsible for assigning a specialist to fully 

accomplish the roles and responsibilities of the Grant and Agreement Specialist. In cases 
6

where the grantee is unable to meet on the established dates, the visit will be rescheduled to 

mutually agreeable dates. 

The DGA Grant and Agreement Specialist will rely on the established DGA procedures for 

preparing travel orders, assisting with travel and logistical arrangements, and working with the 

DIAS Administrative Officer with regard to the budgetary aspects of travel. 

II. PRE-SITE VISIT ACTIVITIES & PROCEDURES 

The Grant and Agreement Specialist is responsible for ensuring that the following activities take 

place and procedures are followed prior to going out on the site visit. 

A. NOTIFICATIONS AND ARRANGEMENTS

1. Notification to Awardee Institution 

2. Written confirmation and request for documentation 

3. Notification to NSF program officials 

4. Final confirmation immediately before the site visit. 

1. Notification to Awardee Institution 

Contact with an awardee should be initiated with the Authorized Organizational Representative 

(AOR) who signed the proposal. The initial contact should be made with the AOR because the 

AOR assumes certain legal responsibilities with respect to ensuring proper project execution 

and control of Federal award funds. As such, correspondence should be addressed directly to 

the AOR. Once this contact is made, that individual may put the site visit team in contact with 

other personnel at the organization who are qualified to provide the type of information that will 

be necessary to ensure a successful site-visit. In such a situation, the site visit team may need 

to coordinate with these individuals to schedule and coordinate the site visit. 

The confirmation/documentation request letter should be prepared before the initial telephone 

notification so that it is substantially ready to be sent immediately after the conversation. This 

verbal notification should normally be made approximately 4 weeks before the target date of the 

review. The individual should identify himself or herself as calling from the National Science 

Foundation’s Office of Budget, Finance and Award Management. The individual should inform 

the AOR (or designated contact) that the purpose of the call is to schedule a site visit with their 

institution. The following information should be conveyed: 

 the review is part of NSF’s award monitoring and business assistance activities. The 

review is not an audit but rather an assessment of the institution’s systems as they relate 

to the administration of NSF funds. 

 the purpose of the review is to evaluate the effectiveness and efficiency of the policies 

and procedures that the organization has in place to manage federal funds, and in 

particular NSF funds. 

 the areas that will be included in the review (e.g., core review areas including general 

management, accounting and financial system review, FCTR reconciliation, and any 

targeted review areas). 
7

 the review will allow for a two-way exchange of information. It will provide an opportunity 

for the NSF reviewers to answer financial or administrative questions and to provide 

business assistance. 

2. Confirmation letter and request for documentation 

Send the letter to the AOR to confirm arrangements made by telephone and to request 

documentation needed during the review. Use the sample letter contained in Appendix A. 

Courtesy copies should also be sent to the NSF Program Officer(s) and all site visit team 

members including the analyst / cost analyst. This will serve as the notification to NSF Officials 

and keep the review team apprised of progress toward preparing for the visit. 

3. Final Confirmation 

One week prior to departure for the site visit, the specialist should call the AOR or his/her 

designate for final confirmation and discuss the following: 

 Ask if they have any questions 

 Advise the awardee if any documentation requested has not been received and that a 

sample of disbursements will be reviewed 

 Advise the awardee that supporting documents (invoices, receipts, etc.) should be 

readily accessible 

 Confirm that awardee personnel will be present throughout the visit to assist, if needed 

 Confirm meeting time and place and obtain directions and any other logistical 

requirements 

B. PRE-VISIT DESK REVIEW

The pre-visit desk review consists of gathering data and files; performing a review of appropriate 

information in the award files; and obtaining information by consulting with NSF program 

officer(s), CAAR Cost Analysts, and other NSF and BFA officials. More detailed information on 

documentation to be gathered can be found in the Award Documentation Section of this Guide. 

In addition, reviewing the modules contained in Section III of this Guide will allow for familiarity 

with the kinds of questions that will need to be answered during the review. 

C. FINAL PRE-VISIT POINTERS

The team should meet prior to the visit to coordinate travel arrangements, exchange cell phone 

numbers in case of emergency and assign review modules. In general, the core review modules 

should be performed by the cost analyst. Depending upon the experience and expertise of the 

DGA specialist, the specialist can perform a number of the targeted modules independent of the 

cost analyst. Suggested modules for the specialist are Consultants, Sub-recipient Monitoring, 

Property & Equipment and Final Project Reports. 
8

AWARD-MONITORING SITE VISIT REVIEW CONTENT 

BFA has identified core review areas required to be included in all site visit reviews to ensure 

that consistent standards are applied to all awardees and to provide consistent data elements 

for assessment of findings. In addition, targeted review areas will be identified by the review 

team based on the Annual Risk Assessment and input from program officers, grants specialists, 

cost analysts and other NSF officials. The CAAR cost analyst serving as the leader of the 

review team is the final decision maker with regard to which targeted areas will be addressed. It 

is an important distinction that the core review areas will be included in all site visit reviews while 

the targeted review areas will be performed only when identified by the AMBAP team that is 

performing that particular site visit. Core and identified targeted review areas will be 

documented on the Pre-Visit Risk Assessment (see Appendix 3). 

Core Review Areas for Award Monitoring Site Visits 

(Included in all site visit reviews) 

General Management 

Accounting & Financial System Review 

FCTR Reconciliation to the Accounting System

Targeted Review Areas for Award Monitoring Site Visits 

(Performed when identified by the AMBAP team) 

Time & Effort Records for Personnel

Fringe Benefits

Travel

Consultants

Cost Sharing

Participant Support Costs

Indirect Costs

Procurement

Sub-awards & Sub-recipient Monitoring

Property & Equipment

Final Project Report 
9

AWARD DOCUMENTATION 

Obtain and review the documentation described below. Identify the relevant targeted areas that 

pertain to each award in the review. Record questions or issues that come to mind so that they 

can be discussed with the site visit team members, NSF program officer(s), and other NSF 

officials before the site visit, and the cognizant awardee officials during the site visit. This 

information should be recorded on the DGA / CAAR Consultation worksheet, (Appendix 1). 

Obtain basic information for the organization to be reviewed 

 Identify the organization by name and address. Include the Authorized Organizational 

Representative (AOR) and the Federal Cash Transaction Report (FCTR) Contact as listed 

in DFM records. Include telephone, fax and email addresses. This should be recorded on 

the General Management worksheet, (Appendix 8) and the Accounting & Financial 

System Review, (Appendix 9). 

 Begin gathering background information regarding background information on the 

organization. All organizations selected for site visits should have current NSF awards. A 

good starting point, therefore, is DGA and DIAS/CAAR files. A review of NSF files will 

allow the reviewer to determine whether any reviews were performed and whether any 

issues were identified previously. 

 Note that NSF requests information from all new awardees (see the Checklist in 

Prospective New Awardee Guide). The data collected includes information on the 

organization’s structure, management, accounting system, financial statements, indirect 

cost rates, as well as a listing of current or recent federal awards. 

Identify the organization by type 

The reviewer should determine whether the applicant is a commercial (for-profit) organization; 

state, local, or Indian tribal government; hospital; educational institution; or a nonprofit 

organization. The necessity of identifying the type of organization is important because the cost 

principles and administrative requirements are not the same for all organizations. 

Determine the type of operation in which the organization is involved. This may include such fields 

as research, school district, college or university, education specialist, film production, 

manufacturing, services, construction, etc. For an established organization, the accounting 

system is usually designed to fit its particular needs. Usually, construction and research 

organizations will have operational job order cost accounting systems. Manufacturing and 

services organizations, unless already involved in Government work, will usually operate without a 

project cost accounting system. 

This information should be recorded on the General Management worksheet, (Appendix 8).
10

CONSULTATION WITH PROGRAM OFFICIALS 

The specialist should discuss the award(s) to be reviewed with the NSF program officer(s). 

These are the awards identified in the Annual Risk Assessment performed by CAAR. While we 

have narrowed the focus to these awards, the primary purpose of the review is to assess the 

overall systems, policies and procedures, and practices regarding the recording and reporting of 

costs. Specifically, the incurrence of costs in the targeted elements on these awards provides 

the entry point to review the awardee’s systems. 

The specialist and other team members will discuss the organization’s performance with the 

Program Officer(s) to determine whether there are any areas of concern from his/her 

perspective that warrant further review before or during the site visit. This discussion should be 

in person. However, if the team is unable to meet with the program officer, the form may be emailed to program officer. In general, the one-on-one meeting will give a better overall 

impression of the organization. The Program Office Consultation worksheet should be used to 

document these discussions (Appendix 2). 
11

 PREPARATION FOR ENTRANCE & EXIT MEETINGS

Before going on-site, it is important to become familiar with what takes place at the entrance 

and exit meetings and to be aware of the information needed to ultimately complete the site visit 

report. This is important because it is more easily obtained while at the awardee’s location 

rather than after you have returned to the office. 

Entrance Meeting 

The grant specialist will introduce the team members and advise the awardee of the objectives 

of the award monitoring and business assistance site visit. This will include a discussion of the 

steps that will be taken to complete these objectives. This is basically an opportunity to have a 

face-to-face conversation about the information conveyed in the Site Visit Notification Letter. 

The cost analyst will explain that the team is available to answer any financial or administrative 

questions that the awardee may have and to provide any business assistance needed. The 

cost analyst will conduct the review using the review modules as outlined in Section III. The 

entrance meeting will be documented using Appendix 4, Entrance Conference. 

Exit Meeting 

The cost analyst will lead the exit conference. The cost analyst or designated team member will 

briefly describe each issue noted during the site visit to the awardee. Each issue will be 

discussed along with the related recommended corrective actions necessary for satisfactory 

resolution. The awardee should be afforded the opportunity to ask questions about these 

issues, and the awardee should be advised that all issues identified are being identified 

preliminarily and are subject to change based on any additional information that may be 

obtained subsequent to the site visit. The awardee should also be advised that they will receive 

an official letter, Post Site Visit Letter, Appendix C, that details each issue noted during the 

visit, and, if applicable, recommendations outlining the steps necessary to resolve the issue. 

The cost analyst should let the awardee know that a written response to this letter will be 

requested within 30 days. Finally, it is important to thank the awardee for its cooperation and 

assistance during the site visit. The exit conference will be documented using Appendix 5, Exit 

Conference. 

Also, the grant specialist should record any business assistance provided to the awardee during 

the site visit. This includes, but is not limited to, assisting the awardee in properly completing 

financial status reports, requesting award funds, interpreting policies and procedures, and 

providing needed information to various offices within NSF. 
12

SITE VISIT REPORT PLANNING 

As discussed in Section I, Roles and Responsibilities, the final draft of the report will be written 

by the cost analyst. Throughout the review, the team leader, along with other team members, 

will take notes, obtain and retain any necessary supporting documentation for their assigned 

modules. In addition, be sure to record the names and titles of the awardee personnel who are 

present at the entrance and exit meetings and the personnel met with during the course of the 

review (obtain business cards if available). 

Make note of any policies, procedures, and/or practices employed by the awardee that the team 

considers to be especially good and that could be considered a “best practice” and shared for 

the benefit of other awardees. Obtain permission from the awardee to share the information. 

The analyst will need to prepare the report according to the site visit report format contained in 

Appendix B. As notes are taken and the review progresses, it is helpful to keep in mind that 

the report will ultimately need to account for all of the core and selected targeted review 

areas and will need to include adequate documentation to support any necessary follow-up 

issues. 
13

III. ON-SITE REVIEW MODULES 

CORE REVIEW MODULES

General Management 

Introduction 

This section reviews and assesses activities related to the general management of the 

organization. An organizational structure provides for the proper assignment of authority and 

responsibility among departments, individual officers, and employees so as to furnish the 

necessary segregation of duties and responsibilities. Duties of the management staff must be 

allocated so that the responsibilities for operations, custodianship, and reporting are separate and 

distinct and can be immediately subjected to the challenge and scrutiny of the chief executive 

officer and board of directors. This is accomplished and documented through the system of 

internal controls. The system of internal controls includes all coordinated methods and measures 

adopted by an organization to safeguard its resources, assures the accuracy and reliability of its 

accounting and cost data to promote operational efficiency, and encourages adherence to 

established management policies and procedures. 

Reference Documents 

OMB Circular A-110, “Uniform Administrative Requirements for Grant and Agreements with 

Institutions of Higher Education, Hospitals and Other Non-Profit Organizations” 

OMB Circular A-102, “Grants and Cooperative Agreements with State and Local Governments” 

Guide GPM, Section V, “Grantee Standards” 

Objective of Review 

The organization should have in place a structure that enables the efficient and effective 

performance of the award ensuring compliance with regulations and requirements established by 

NSF and the Federal Government. In addition, there should be evidence that a system of internal 

control is in place that constitutes the methods followed by an organization to: 

• Protect assets 

• Protect against the incurrence of improper liabilities 

• Assure the accuracy and reliability of all financial and operating information 

• Judge operating efficiency 

• Measure adherence to established policies and procedures 

Areas of Concern 

As previously discussed, there should be clear evidence that the organization has implemented 

all five elements of an effective organizational structure. In smaller institutions, there is 

tendency to combine the elements without implementing additional safeguards and 
14

crosschecks. This will cause a weakness in internal control and provide the opportunity for 

errors, waste and possible fraud. 

Detailed Procedures 

Obtain basic information concerning the organization under review by completing the 

Organizational Survey, Appendix 8. This should be filed as worksheet Q in the site visit file.
15

Accounting & Financial System Review 

Introduction 

This section provides guidance for conducting financial management systems reviews of any 

organization regardless of its type (e.g., commercial firms; State, local, and Indian tribal 

governments; and educational, hospital, and other nonprofit). 

Financial management systems reviews involve the overall examination of the financial 

management policies, procedures, and controls maintained by an organization, which affect the 

incurrence of costs. Generally, the incurrence and levels of costs are the result of management 

decisions in choosing between alternative methods of accomplishing the organization's objectives. 

Management decisions, which affect the organization’s levels and controls over costs, relate to 

such matters as organizational structure, accounting systems, policies and procedures, budgeting, 

purchasing, personnel, internal controls. 

Reference Documents 

OMB Circular A-110, §. 21, “Standards for Financial Management Systems” 

45 CFR Ch 6 § 602.20, “Standards for Financial Management Systems” 

GPM, Chapter V , “Grantee Standards” 

Objective of Review 

The objective of a financial management systems review is to provide those responsible for 

awarding and administering Government projects with information and advice concerning the 

adequacy of grantees' financial management practices affecting the incurrence and control of 

costs. 

This section reviews and assesses activities related to the budget and finance systems of an 

organization and includes a review of the accounting policies and procedures and a sampling of 

transactions to check for accuracy and completeness. 

The organization should have a system that provides for the following: 

a. Accurate and complete disclosure of the financial results of Federal 

awards; 

b. Records that identify the source and application of funds; 

c. Effective control over and accountability for all funds, property and 

other assets; 

d. Written procedures to minimize the time elapsing between the transfer 

of funds to the recipient from the U.S. Treasury and the use of those 

funds by the recipient for program purposes; (if cash advance basis) 

e. Written procedures for determining the reasonableness, allocability 

and allowability of costs; and, 

f. Accounting records that are supported by source documentation. 

Areas of Concern 

The following is a list of problem areas, which may be encountered while reviewing the adequacy 

of a financial management system. The existence of any of these deficiencies does not 

necessarily mean that an award cannot be processed, suspended or terminated. It does indicate, 
16

however, that corrective or remedial action on the part of the organization is necessary to assure 

adequate accountability and control of costs incurred under a Government project. 

A. Absence of a Financial Accounting System - This situation may occur with new 

organizations, which are beginning business. It is extremely important that all 

organizations doing work for NSF have an operational accounting system. 

Otherwise, the task of administering and accounting for costs and funds under the 

Government project(s) cannot be relied upon, to the probable detriment of the 

program(s). An operational accounting is a standard method of collecting, 

recording, and reporting data as it relates to the control of assets, liabilities, 

revenues and expenses, and the results of transactions within an organization. 

B. Absence of a Project Cost Accounting System - Generally, this occurs within 

established organizations that are commencing business with Government 

agencies. Organizations which deal with commercial entities often find a general 

cost accounting system sufficient for the conduct of business because there is no 

need to report on costs incurred to their clients/customers. Rather, their chief 

concern is to deliver the product or service sold at a stipulated price. 

Under Government cost-type contracts or grants, however, the Government 

reimburses the contractor or grantee for the costs actually incurred - up to a 

specific amount - for delivering the agreed to services or products. A project cost 

accounting system is the standard method of collecting, recording, and reporting 

costs incurred by individual projects. 

C. Absence of Written Accounting Policies and Procedures - Under these 

circumstances, a lack of uniformity in accounting practices exists. This situation 

results in inconsistent treatment of similar costs incurred for like purposes under 

different projects. Consequently, certain projects are unfairly burdened with costs 

attributable to other projects. 

D. Absence of Personnel Policies and Procedures - This deficiency may lead to unfair 

compensation practices which may result in inequities and inconsistencies in 

accounting for personnel costs (e.g., fringe benefits which are paid only to 

employees working on Federal projects). 

E. Absence of Time and Effort Reporting Requirements - Where time and effort 

reporting requirements are not observed, there is considerable doubt as to the 

accuracy of recorded and claimed labor costs. 

Detailed Procedures

Obtain basic information concerning the organization under review by completing the 

Organizational Survey, Appendix 8. This should be filed as worksheet Q in the site visit file. 

Comments

 Reasonableness - a prudent person would have purchased this item and paid this price; 

 Allocable - costs can be assigned to the activity on some reasonable basis; 

 Allowable - costs that are allowed under public laws and regulations, and under the 

award agreement; 

 Consistent - costs must be consistently treated: like costs must be treated the same in 

like circumstances, as either direct (e.g., salaries) or indirect (facilities and 

administrative). 
17

An organization doing business under Government projects may have the following books of 

account and journals: general ledger, project cost ledger, cash receipts journal, cash 

disbursements journal, payroll journal, sales journal, purchases journal and the general journal. 

a) General ledger - This ledger contains all financial data accounts, classified in detail, 

summarizing all the transactions affecting assets, liabilities, and equity of an organization. 

This is a required ledger. 

b) Project cost ledger - This is a subsidiary ledger containing data by cost element (e.g., labor, 

materials, equipment, and travel) for each project. This ledger is required for all Government 

cost-reimbursable type awards. 

Costs recorded in the project cost ledger should tie in with those recorded in the operating ledger 

and other accounting records. 

The organization should have knowledge of those costs, which are expressly unallowable in 

accordance with the applicable laws and regulations. For example, entertainment, donations, and 

interest expenses are unallowable under Government projects. Accordingly, the organization 

should exclude such items in recording and claiming costs under Government projects. Such 

unallowable costs should be accounted for separately. 
18

FCTR Reconciliation to the Accounting System

Introduction 

The acceptance of a grant from NSF creates a legal duty on the part of the grantee organization 

to use the funds made available in accordance with the conditions of the grant. In fulfilling that 

duty the awardees are required to maintain accounting records that provide adequate support for 

the expenditure amounts and any other information reported on the Federal Cash Transaction 

Report, (FCTR). The billing system should provide reasonable assurance that billings, (FCTR’s) 

applicable to federal awards are prepared in accordance with applicable laws and regulations, 

and award terms & conditions; and that material misstatements are prevented, or detected and 

corrected in a timely manner. 

Payments may be made in advance of work performed or as a reimbursement for work performed 

and/or costs incurred by the grantee. However, payments may not be made in advance of a grant 

being signed by the grants official for the project period. Grantees may receive payments from 

NSF in advance of cost incurred provided that the following conditions exist: 

1. Funds for the project period have been obligated by a Grants Officer in the form of 

a signed grant; 

2. The grantee has established or demonstrated to NSF the willingness and ability to 

establish written procedures that will minimize the time elapsing between the 

transfer of funds from the U.S. Treasury and their disbursement by the grantee; 

and 

3. The grantee’s financial management system meets the standards for fund control 

and accountability prescribed in Section .21 of OMB Circular A- 110. 

Advances to a grantee shall be limited to the minimum amount needed and shall be timed to be in 

accordance with the actual, immediate cash requirements of the grantee in carrying out the 

purpose of the approved program or project. The timing and amount of cash advances shall be 

as close as is administratively feasible to actual disbursements for direct program costs and the 

proportionate share of any allowable indirect costs. 

The grantee’s designated official (Accounting Officer, Business Officer, Treasurer, etc.) must 

submit their cash requests for payment by using either the ASAP or FastLane Cash Request 

systems. Grantees submit requests on a periodic basis (monthly, biweekly or other regular cycle) 

depending on their normal disbursement patterns. As previously discussed, such requests should 

be limited to the minimum amounts needed and be timed to meet the anticipated cash 

requirements for allowable charges to active NSF projects. 

Reference Documents 

Grants Policy Manual Chapter IV, “Financial Requirements & Payments.” 

Objective of Review 

The objective of the review of FCTR Reconciliation is to ascertain that: 

• Awardee organizations have procedures that reconcile the expenditure amount per the 

FCTR to the project cost summary by award. 

• The organization has procedures that will minimize the time between drawdown and 

disbursement 
19

Areas of Concern 

The following is a list of problem areas relative to the reconciliation of the FCTR. The existence of 

any of these items does not necessarily indicate that an award cannot be processed. It does 

suggest, however, that a problem may exist and that further investigation is warranted. 

These problem areas include: 

• FCTR does not reconcile to the accounting books & records 

• Failure to file an FCTR for the quarter 

Detailed Procedures 

The following procedures are intended to serve as a guide in the review of the FCTR 

reconciliation for the selected quarter. 

Steps 

1. At least 30 days, prior to the on-site visit 

obtain a copy of the latest FCTR submitted 

by organization. Have the organization 

prepare a reconciliation of the “Net 

Disbursement Reporting Qtr” reported by 

award to their project cost ledger.

Comments 

1. Depending on the accounting system this 

information will be accumulated by 

individual award, at a minimum or by 

funding agency. 

(a) If the information is accumulated by 

funding agency, have organization 

provide the reconciliation for all NSF 

awards. 

(b) If the information is not accumulated 

by funding agency, have the 

organization provide a reconciliation 

for each award. If more than 10 

awards are active, judgmentally select 

10 to trace to the accounting records. 

2. Review the reconciliation for accuracy 

and completeness. Have the AOR explain 

any reconciling item that is not self-evident. 

Any un-reconcilable difference should be 

questioned and adjusted on the next FCTR.

2. FCTR requests submitted by the 

organization do not normally reflect award 

costs as recorded in the basic accounting 

records. Normal reconciling items include 

both timing differences and permanent 

differences. Some of these items include: 

(a) Unallowable costs as required by the 

OMB Circulars, FAR, and/or grant 

terms 

(b) Incurred costs that are nonbillable 

because the costs do not meet 

specified criteria for inclusion in the 

FCTR requests (e.g., accrued costs 

that ordinarily will not be paid prior to 

submission of the next FCTR request 

to the government). 

(c) Costs in excess of indirect rate 
20

ceilings. 

3. While on-site, trace the amounts on the 

schedule to the books & records, (project 

cost ledger or summary). Document the file 

for any necessary follow-up. Notify DFM of 

any required adjustment.

3. The awardee should be able to 

demonstrate that FCTR requests are 

prepared directly from the cost accounting 

records or from other records, which are 

reconciled to the cost accounting records. 

FCTR request prepared from subsidiary 

ledgers and/or memorandum reports must be 

reconciled to the general ledger by element of 

cost.

 

4. Review policies & procedures for 

preparing FCTR requests and drawdowns. 

Evaluate whether the procedures minimize 

the time between drawdown and 

disbursement. 

4. Special controls and processes must be 

established to assure that these 

differences are properly removed from 

FCTR requests. The awardee's billing 

system should include processes for:

a. Segregating and excluding 

unallowable costs as required by the 

OMB Circulars, FAR, and/or grant 

terms. 

b. Segregating incurred costs that are 

nonbillable because the costs do not 

meet specified criteria for inclusion in 

the FCTR requests (e.g., accrued 

costs that ordinarily will not be paid 

prior to submission of the next FCTR 

request to the government). 

c. Withholding costs that are appropriate 

adjustments to the request (e.g., costs 

in excess of indirect rate ceilings). 

d. Withholding costs subject special 

approval requirements or other grant 

limitations such re-budgeting of 

participant support costs. 

5. Reconciliation of FCTR to Accounting 

Records
21

Time & Effort Records for Personnel

Introduction 

This section provides guidance for conducting a review of labor costs at any organization. 

There is detailed information describing variations by type of awardee institution. 

Reference Documents 

Cost Principles contained in: 

OMB Circular, A-21, Subparagraph J.10, “Compensation for Personal Services” 

OMB Circular, A-122, Attachment B, Item 8, “Compensation for Personal Services” 

OMB Circular, A-87, Item 8, “Compensation for Personal Services” 

Objective of Review 

The objective of the review is to determine if labor costs are allowable, allocable, and 

reasonable. It is important to determine if the awardee institution maintains a system to 

document and support salary charges to NSF awards. 

Areas of Concern 

The following is a list of problem areas relative to the charging of salaries & wages. The existence 

of any of these items on a particular project does not necessarily indicate that an award cannot be 

processed. It does suggest, however, that a problem may exist and that further investigation is 

warranted. 

These problem areas include: 

A. Lack of written policies & procedures 

B. Lack of or inadequate time and effort records to support the salaries & wages 

C. Where budgetary estimates are, failure to confirm the validity of the estimate and make 

necessary adjustments. 

Detailed Procedures 

 Steps

 1. Determine the types of personnel 

records that the awardee institution 

maintains. 

 Comments

 1. Examples should include: 

 Name 

 Title 

 Job Description 

 Salary Information and Rate of Pay 

 Personnel actions 

 Tax records 

 W-2 and Withholding Forms 

 Evaluations 

 Records of Absences and Available 

Leave Balances 

2. Determine whether the awardee has 

an effort reporting system as opposed to 

2. Time and attendance records indicate 

that a particular employee was present 
22

time and attendance records. for duty or out on vacation, sick, or 

annual leave. Time and effort reports 

indicate what particular project or job 

number the employee was working on for 

how many hours or what proportion of his 

or her effort. 

 Obtain a list of salary charges to an 

NSF award from the project cost 

summary by employee name. 

 Select a sample of direct labor 

charges to review. 

 Determine what payroll period the 

employee(s) in the sample charged 

labor or salary as a direct charge (or 

as cost sharing) to the award being 

reviewed. 

 Where possible select a mix of 

employees (i.e. scientific, 

administrative, exempt and nonexempt). 

 Verify that the time and effort reports 

match the payroll period that the 

salary was charged to the NSF 

sponsored project. 

Please note that some time and effort 

systems may be automated or kept on a 

computer and it may be necessary to utilize 

printouts or work on-line. 

3. Verify the elements that appear on the 

time and effort reports reviewed. 

3. The following elements should appear on 

the time and effort reports reviewed in the 

sample (timecard or electronic version): 

 Employee name and/or identification 

number 

 Project Number or account code 

 Hours or percentage of effort charged 

 Total effort for that pay period 

 Employee signature and/or 

supervisory (with first hand 

knowledge about the employees 

activities) signature. 

4. There are several differences in time and 

effort reporting and documentation 

requirements by OMB Circular or by type of 

awardee institution. 

4. The following requirements apply to the 

organization depending on the type of 

institution being reviewed. 

OMB Circular A-21 – Colleges & 

Universities 

The payroll distribution system must meet the 
23

following criteria: 

 Incorporated into official records of 

institution and generally match the 

quarter or semester academic periods 

of the awardee institution. 

 Reasonably reflect the activities for 

which the employee is compensated 

 Encompass both sponsored activities 

and all other activities on an 

integrated basis but may include the 

use of subsidiary records 

 May initially bill based on budgeted 

amounts but must recognize an after 

the fact confirmation that budgeted 

costs represent actual costs 

 Significant changes must be identified 

 Confirmed by employee or 

responsible person 

 Must be prepared at least semiannually 

 Awardees systems will provide for 

periodic internal independent 

evaluations 

Acceptable methods for Universities include: 

 Plan confirmation 

 After the fact activity reports, and 

 Multiple confirmation records. 

Each of these acceptable methodologies or 

systems has variations in the Federal 

requirements. For additional information see 

OMB Circular A-21 Attachment B Section 8 – 

Compensation for personal services 

OMB Circular A-122 – Non-Profit 

Organizations 

Charges based on documented payroll 

approved by a responsible official and based 

on Personal Activity Reports (PARS) that 

meet the following criteria: 

 Maintained for employees who charge 

time to awards either in whole or in 

part and either as a direct charge or 

as part of an indirect cost pool 

 Reflect an After-the-fact determination 

of actual activity of each employee 

(estimates determined before services 

are performed do not qualify as 

supporting documentation). 
24

 Account for total effort for which 

employees are compensated 

 Signed by employee or supervisor 

 Prepared at least monthly and 

coincide with one or more pay periods 

OMB Circular A-87 – State and Local 

Governments and Indian Tribes 

State and local documentation requirements 

depend on the types of charges and 

employees efforts being charged to Federal 

awards: 

 No further documentation if employee 

works in single indirect cost function 

 If employee works 100% of their time 

on only one Federally sponsored 

project they may use semi-annual 

certifications signed by that employee 

or their supervisor 

 If employee works on more than one 

Federal project, on other non-federal 

projects, indirect and direct activities 

Charges to Federal award for salaries and 

wages either direct or indirect will be based 

on documented payrolls approved by a 

responsible official that meet the following 

criteria: 

 Reflect an After-the-fact determination 

of actual activity of each employee 

 Account for total activity for which the 

employee is compensated for 

 Prepared at least monthly and 

coincide with one or more pay periods 

 Signed by the employee 

 Budget estimates may be used for 

interim accounting purposes but do 

not qualify as supporting 

documentation 

 Comparisons of actual costs to 

budgeted amounts must be made at 

least monthly and should be revised 

at least quarterly. 

5. Effort Reporting Checklist Answers to the following questions should be 

obtained and documented: 

 Does the awardee institution have 

time and effort reports as opposed to 

time and attendance records? 
25

 Does the awardee organization 

charge time based on actual incurred 

cost or based on budgeted amounts 

as approved by the sponsoring 

agency? 

 Does the organization have written 

policies and procedures for filling out 

and completing the time and effort 

reports? 

 Do the time and effort reports comply 

with the Federal requirements as 

outlined in the appropriate OMB 

Circular by awardee institution type? 

 Do the time and effort reports contain 

at a minimum; employee name or 

identification number, project name or 

account code, hours worked or 

percentage of effort for that period, 

and a signature? 

 Do the time and effort reports account 

for 100% of the effort? 

 Is there an after the fact verification 

process and are time card changes 

documented in writing? 

 What is the awardee organization 

process for ensuring that time and 

effort reports are complete and 

accurate? 

 What internal procedures or reviews 

has the awardee institution put in 

place or conducted on the 

organizations time and effort reporting 

system? 

 Based on the sample that has been 

selected and utilizing professional 

judgment does it appear the charges 

to the NSF sponsored project are 

adequately documented? 
26

Fringe Benefits 

Introduction 

Fringe benefits are allowances and services provided by the organization to its employees as 

compensation in addition to regular wages and salaries. Fringe benefits are appropriate charges 

to the extent such benefits are: 

• In accordance with an established, written policy of the organization. 

• Required by employer/employee agreement or law. 

• Treated consistently. 

Reference Documents 

Cost Principles contained in: 

OMB Circular, A-21, Subparagraph J.10, “Compensation for Personal Services” 

OMB Circular, A-122, Attachment B, Item 8, “Compensation for Personal Services” 

OMB Circular, A-87, Item 8, “Compensation for Personal Services” 

Objective of Review 

The primary objective of the fringe benefits review is to determine that the benefits claimed are 

reasonable, allowable and allocable. 

Areas of Concern 

The following is a list of problem areas relative to the charging of fringe benefits. The existence of 

any of these items on a particular project does not necessarily indicate that an award cannot be 

processed. It does suggest, however, that a problem may exist and that further investigation is 

warranted. 

These problem areas include: 

A. Charging fringe benefits applicable to Government awards directly while charging all other 

fringe benefits of the organization indirectly. 

B. Applying the rate to an incorrect base. 

C. Lack of written policies & procedures 

D. Excessive fringe benefits for executives. 

Detailed Procedures 

The following procedures are intended to serve as a guide in the review and evaluation of fringe 

benefits. 

Steps

1. Determine whether the organization has 

a negotiated fringe benefits rate with the 

HHS Division of Cost Allocation (DCA) or 

other federal agency. 

a. If not, was a rate negotiated for the 

award and documented in the 

award? 

Comments 

1. For most universities with HHSdetermined rates, there will not be a 

separate for fringe benefits. Fringe 

benefits are specifically identified to each 

employee and are charged individually 

as direct costs. 

a. The organization may not have a 

need for a negotiated fringe benefit 

rate. For example, the organization 
27

 may have a single award with a rate 

established for that award only. 

Consequently, there is no need to 

establish a Federally Negotiated Rate.

2. If a fringe rate has been identified, 

compare the claimed rate to the 

negotiated or award rate. If the rate 

reconciles, then proceed to Step 4. 

a. For rate difference, discuss with the 

controller or AOR. 

b. Obtain information on the treatment 

of the over/under-recovery. 

Determine whether the organization 

has a written policy for handling 

over/under-recoveries of the fringe 

benefit rate. 

2. The organization must have a written 

policy consistently applied for handling 

over/under-recoveries of the fringe 

benefit rate. Examples are: 

a. Adjusting the current provisional fringe 

benefit rate to the actual rate. 

b. Incorporating over/under-recoveries 

into the indirect cost pool. 

c. Incorporating over/under-recoveries 

into the fringe benefit rate of the 

following year. 

3. If fringe is treated as a direct cost, then 

judgmentally trace the fringe charge for a 

few employees for the job cost ledger to 

the payroll ledger and personnel file. 

3. A written policy on the type and makeup of 

fringe benefits paid by class of employee 

is needed. Organizational handbook 

issued to new employees may contain this 

information. 

4. Determine that the organization has 

written policies & procedures for fringe 

benefits. 

4. A written policy on the type and makeup of 

fringe benefits paid by class of employee 

is needed. Organizational handbook 

issued to new employees may contain this 

information. 
28

Travel 

Introduction 

Travel costs include expenses for transportation, lodging, subsistence, food, taxi, tolls and other 

incidental expenses incurred by employees and outside consultants in travel status. 

Travel is allowable as a direct cost to a particular sponsored project where it provides a direct 

benefit to that activity and is necessary and reasonable expense. Where travel is charged to an 

individual award there should be documentation (such as a travel authorization) describing the 

travel and explaining how/why this trip is directly related or will help accomplish award 

objectives. The awardee should also have a reasonable basis for the allocation of travel costs if 

they are charged partially to two or more awards. 

Travel costs are allowable as indirect cost pool expenses where it occurs in the normal course 

of business of the awardee or benefits more than one particular project. 

NSF has waived the cost principal requirements for Agency prior approval of travel costs. 

Reference Documents 

Cost Principles contained in: 

OMB Circular, A-21, Subparagraph J.53, “Travel Costs” 

OMB Circular, A-122, Attachment B, Item 51, “Travel Costs” 

OMB Circular, A-87, Item 43, “Travel Costs” 

Objective of Review 

The objective of the travel review is to determine if the awardee institution has acceptable 

written travel policies and procedures in place. Travel costs need to be adequately 

documented, allocable to NSF sponsored projects, and be reasonable based on award terms 

and conditions and the applicable OMB circular or FAR regulations. 

Areas of Concern 

The following is a list of problem areas relative to the charging of fringe benefits. The existence of 

any of these items on a particular project does not necessarily indicate that an award cannot be 

processed. It does suggest, however, that a problem may exist and that further investigation is 

warranted. 

These problem areas include: 

Government published per diem rates 

The Federal government publishes a set of per diem rates for most national and international 

travel locations. These daily or per diem rates are broken down into a lodging portion and a 

meals portion. Transportation and incidental expenses are not included in the per diem rates. 

The per diem rates provide a basis for looking at the reasonableness of travel costs claimed. 

Most NSF awardee institutions may charge at actual costs where such costs exceed per diem. 

However, this should be consistent with the institutions policies and applicable circular. An 
29

appropriate organizational official should approve such exemptions in advance on a case-bycase basis. 

In Travel Status – local meals and entertainment expenses are not considered allowable by 

classification as travel costs. NSF does not normally allow employees not in travel status or in 

an official business meeting to charge local meal expenses to NSF awards. 

US Flag Air Carriers – Where available, NSF awardees are required to make use of US Flag air 

carriers even if foreign air carriers are cheaper or more convenient. Foreign flag air carriers 

may be used under certain circumstances identified in Grant General Conditions GC-1 (article 

10 Travel): Basically, the allowable situations for use of a foreign air carriers involve: nonavailability of US air carrier; intra-foreign country travel, connecting times at a foreign 

interchange, and total trip time by the foreign air carrier. The awardee should document at the 

time of travel which exemption applied. In certain situations, US Air Carriers may also enter into 

a code-sharing arrangement with a foreign air carrier that will still classify the flight as US Air 

Carrier. 

Premium Airfare - First Class and Business Class airfare should not be charged to NSF awards. 

Awardee organizations should charge airfare to NSF at Coach or economy rates. Upgrades 

may be taken to use frequent flyer miles or other promotions but the rate charged to the Federal 

award should be made at the Coach rates. Length of travel or position within the awardee 

organization (Executive Director), and /or size of the traveler are not acceptable excuses to use 

First Class airfare. 

Detailed Procedures 

 Steps

 1. Review the awardee’s travel policies and 

procedures and look at supporting 

documentation for travel costs. 

 Comments

 1. If the approved budgets of any awards to 

the awardee indicate that travel costs are 

authorized. Review procedures maintained 

by the awardee to control these types of 

activities. Note that a recipient may follow its 

own established travel policies and 

procedures, as long as they are reasonable in 

accordance with Federal cost principles. If the 

awardee does not maintain documented 

travel procedures, they must comply with 

Federal travel guidelines. In these cases, 

any travel paid for with Federal funds must be 

consistent with the Federal travel guidelines. 

Typically as supporting documentation one 

would expect to find:

 A travel authorization document that 

approves the travel in advance and 

explains the purpose of the travel and 

its relation to award objectives. 

 An after the fact expense report 

detailing the types of travel expenses 

claimed and showing advances if any 

and liquidation of that amount. 
30

 Original receipts should be maintained 

with travel records to reduce the 

possibility of claiming the same 

expense for reimbursement on more 

than one award or to 3rd party 

sources. 

Reviewers should select a sample of travel 

transactions to determine if the awardee 

institution consistently follows its procedures. 

If not, are exemptions to travel policies 

approved in writing in advance by a 

responsible official within the awardee 

organization. Transactions sampled should 

also be reviewed to determine if costs 

claimed for travel necessary, reasonable, and 

allocable to the NSF award.
31

Consultants 

Introduction 

Consultants are identified as persons (i.e., individuals) who are members of a particular 

profession or possess a special skill. Although a consultant agreement is technically a type of 

contract, under NSF awards, consultants are categorized differently than subaward agreements 

for the following reasons: 

Generally, consultant services are provided by individuals to give technical advice and 

support to the awardee organization. Consultants work under the awardee organization’s 

direction to achieve the goals of the project. Typically, consultant agreements do not bind the 

consultant to a finite deliverable. 

In contrast, subaward agreements are typically made to organizations and not to individuals. 

The agreements are generally more formal with stated deliverables and deadlines. Unlike 

consultants, subawardees are contracted to accomplish a piece (or pieces) of the project 

independent or with very little direction from the primary awardee. 

Reference Documents 

Cost Principles contained in: 

OMB Circular, A-21, Subparagraph J.37, “Professional Service Costs” 

OMB Circular, A-122, Attachment B, Item 37, “Professional Service Costs” 

OMB Circular, A-87, Item 32, “Professional Service Costs” 

FAR Part 31.205-33, “Professional and Consultant Service Costs” 

GPM Section 616, “Consultant Services” 

Objective of Review 

The primary objective of the review is to determine that the claimed costs are reasonable, 

allowable and allocable in accordance with the cost principles and the Grant Policy Manual. 

Areas of Concern 

The awardee must limit the amounts paid to consultants under NSF awards. Recovery for 

personal compensation of consultants is limited to the daily equivalent of the rate paid to an 

Executive Schedule Level IV federal employee (exclusive of indirect cost, travel, per diem, 

clerical services, fringe benefits and supplies). The limitation is statutorily imposed and included 

in NSF’s annual appropriation. 

In light of the above, during a monitoring visit, NSF should ensure that the applicable allowable 

daily rate limit for consultant pay was not exceeded. For maximum allowable rates, see Award 

and Agreement Conditions at: http://www.nsf.gov/home/awards/awards_gac.htm

Other problem areas include: 

A. Lack of written policies & procedures 

B. Lack of or inadequately documented consulting agreements which fully disclose the rate 

of pay 

C. Consultant agreements that do not contain a statement of work. 

Detailed Procedures 
32

 Steps

 1. Request a listing of consultants being 

charged to the identified awards. 

Judgmentally select a sample of the 

consultant agreements for further review. 

Verify that the “rate of pay” does not exceed 

the NSF consultant limit. 

 Comments

1. Ensure the agreement contains the 

following items: 

 Name of the consultant 

 Rate of pay 

 Period of performance 

 Description of services to be provided

 Other data (e.g., cost information on 

indirects, travel, per diem & supplies)

2. Request to review a couple of paid 

invoices. Review the invoice for compliance 

with the agreement. Is there enough 

information contained on the invoice to 

indicate that the work performed relates to 

the NSF award.

2. The consultant invoice should contain 

enough information to make it possible to 

calculate a daily rate paid. In essence, the 

salary portion of the invoice should be 

separate and distinct from all other costs 

and should be reflected in dollars per hour 

or day. 

 Ensure that the consultant was not 

paid over the NSF allowable limit. 

Keep in mind the period of the 

services provided and the applicable 

limit at the time of the service. 

 Ensure the rates in the applicable 

agreement are comparable to the 

rates charged on the invoice. 
33

Cost Sharing

Introduction 

Cost Sharing (or matching) is that portion of allowable project costs that are not borne by the 

Federal Government. Required cost sharing under NSF awards may be expressed as a 

percentage of project costs and is reflected on Line M of the Form 1030, Award Budget. 

Reference Documents 

OMB Circular A-110, Section .23, “Cost Sharing or Matching” 

45 CFR Ch 6 § 602.24, “Matching or Cost Sharing” 

Grant Policy Manual Section 330, “Cost Sharing and Matching” 

Objective of Review 

To assess the awardee’s system for documenting and accounting for claimed cost-sharing 

amounts. Cost sharing must meet all of the following criteria: 

1. Are verifiable from the recipient's records. 

2. Are not included as contributions for any other Federally assisted project or program. 

3. Are necessary and reasonable for proper and efficient accomplishment of project or 

program objectives. 

4. Are allowable under the applicable cost principles. 

5. Are not paid by the Federal government under another award, except where authorized by 

Federal statute to be used for cost sharing or matching. 

6. Are provided for in the approved budget. 

7. Conform to other provisions of OMB Administrative Circulars, as applicable. 

Areas of Concern 

The following is a list of problem areas relative to the claimed cost sharing. The existence of any 

of these items on a particular project does not necessarily indicate that an award cannot be 

processed. It does suggest, however, that a problem may exist and that further investigation is 

warranted. 

These problem areas include: 

A. Cost sharing must be accounted for in the same manner as NSF-funded costs. 

Specifically, accounting records for cost sharing must be maintained in accordance with 

OMB Circular A-110, Section .21, “Standards for Financial Management Systems.” 

B. Lack of written policies & procedures 

C. Lack of or inadequately documented support for the claimed cost-sharing amounts. 

D. Cost sharing records not documented by the Accounting office. 
34

Detailed Procedures 

The following procedures are intended to provide guidance in the review of cost sharing 

contributions. 

 Steps

 1. Ascertain whether cost sharing is 

required on the identified awardees. This 

should be documenting using Appendix

10 and will be filed as worksheet R in the 

file.

 Comments

 1. Review award letter for cost sharing 

provisions and amendments. Line M 

reflects required cost sharing.

 

 2. Determine if annual cost sharing 

certifications have been submitted.

 2. If cumulative cost sharing on Line M is 

$500,000 or more, a cost sharing 

certification is required as part of the 

annual report. These reports should be 

printed for use on site.

3. Review Cost Sharing Policy 3. Policy should include: 

 Allowable costs in accordance with 

OMB Circular A-110 and applicable 

cost principle. 

 Requirement for accounting for cost 

sharing as part of the accounting 

records (by project) and maintenance 

of source documentation. 

 Monitoring procedures to ensure that 

required cost sharing is met. 

 

4. Determine the propriety of cost sharing 

categories of cost.

 4. Discuss with organization how it intends to 

meet is cost sharing requirement. 

Determine that proposed cost sharing is 

necessary and reasonable for the proper 

and efficient accomplishment of the 

project. Document any variances between 

how the organization originally proposed 

meeting its cost-sharing requirement and 

how it is actually being met.

5. Determine the propriety of cost sharing 

records.

a. Organization Contributions 

5. 

a. Expenses funded by the organization and 

paid for from non-Federal sources. 

Accounting records must be 

maintained in the same manner as 

NSF funded expenses. For example,

personnel activity reports are required 
35

to support labor contributions. 

b. Third-party in-kind contributions. b. The value assigned to effort contributed by 

third-party sources should be 

commensurate with the salary costs which 

otherwise would be paid to the individual or 

individuals involved. If the data are not 

available, a comparison with salaries paid 

by other organizations doing similar work in 

the same geographic location may prove 

useful. 

 

The valuation of real or tangible personal 

property donated by third parties should be 

based on their fair market value. 

 

6. Determine level of risk that the 

organization will not meet its required cost 

sharing.

6. Discuss with organization and determine its 

ability to meet required cost sharing.
36

Participant Support Costs 

Introduction 

Participant support costs are direct costs for items such as stipends or subsistence allowances, 

travel allowances and registration fees paid to or on behalf of participants or trainees (but not 

employees) in connection with meetings, conferences, symposia or training projects. 

Funds provided for participant support may not be used by grantees for other categories of 

expense without the specific prior written approval of the cognizant NSF Program Officer. 

Therefore, awardee organizations must account for participant support costs separately. 

Reference Documents 

Grant Policy Manual Section 618, “Participant Support Costs” 

OMB Circular A-122, Attachment B, Item 33, “Participant Support Costs” 

Objective of the Review 

The objectives of the review of costs for participant support costs are to ascertain that: 

1. Awardee organizations are accounting for participant support costs separately through the 

use of separate accounts, sub-accounts, sub-task or sub-ledgers. 

2. Whether the organization has re-allocated proposed participant support cost to other cost 

categories. If so, was prior written approval obtained for the NSF program Officer. 

3. Participant support costs have been excluded from the allocation base of the indirect 

rate(s). 

Areas of Concern 

The following is a list of problem areas relative to participant support costs. The existence of any 

of these items does not necessarily indicate that an award cannot be processed. It does suggest, 

however, that a problem may exist and that the cost analyst should act accordingly. 

These problems areas include: 

A. Failure to properly document that proposed participant support costs have only been 

expended for this purpose. 

B. Lack of written policies & procedures for documenting these costs. 

C. Failure to document the attendance of participant at workshops, symposium, etc. 

Detailed Procedures 

The following procedures are intended to serve as a guide in the review and evaluation of 

participant support costs. 

 

Steps

 1. Determine that the organization is 

accounting for participant support costs 

separately through the use of separate 

accounts, sub-accounts, sub-task or subledgers.

Comments

1. In order to adequately review the 

accumulation of participant support costs, 

certain background information should be 

supplied. The following list is not intended 

to be all inclusive, but rather, to be used as 

a guide in determining the basic 

information needed to perform the review. 

a. A schedule of participant support costs 
37

proposed by category. 

b. The policies & procedures used by the 

organization to record the costs. 

c. The actual costs to date as record in the 

project costs ledger and any subsidiary 

ledger or account used to segregate 

participant support costs from other cost 

categories. 

d. Any other types of data necessary to 

make an informed judgment.

 2. Determine that the organization has not

transferred the budgeted cost from this 

category to other cost categories.

 2. Compare actual participant support cost to 

proposed costs. If there actual expense is 

significantly lower than the proposed 

costs, the organization should be asked to 

explain the reason(s) for the 

discrepancies. Perhaps, there will be 

additional costs incurred in the out years. If 

so, there should be budget for those 

expenses. If the organization is unable to 

explain the reason, ascertain whether the 

NSF program officer has been notified and 

given written approval to re-budget the 

cost.

 3. Determine that participant support costs 

have been excluded from the allocation 

base.

 3. This should be accomplished during the 

review of indirect. As the calculation is 

verified for accuracy, this cost should be 

subtracted from total costs to get the 

MTDC base.
38

Indirect Costs 

Introduction 

1. Indirect costs are those costs not readily identified with a project or any other organizational 

activity, but rather incurred by an organization for the joint benefit of the project and other 

objectives. Such costs are usually grouped into common pools and charged to benefiting 

objectives through an allocation process. 

In theory, all costs might be charged directly. Practical difficulties, however, preclude such an 

approach. Accordingly, an indirect cost rate is established as a device for determining fairly 

and expeditiously the proportion of such general expenses that each project shall bear. 

The indirect cost rate is the ratio between the total indirect expenses of an organization and 

some direct cost base. Common direct cost bases are salaries and wages, total direct costs, 

or some modification thereof. 

2. Award actions may contain indirect cost rates and bases that do not agree with the 

organizations negotiated rate agreement. The organization may choose to cost share some 

of the indirect cost or for some other reason may choose to propose an indirect cost rate that 

is different from their negotiated cost methodology. NSF will generally incorporate the 

proposed rate and allocation base in the award action if it results in lower costs to NSF. 

As with other areas, the award / contract terms determine what costs can be claimed. The 

organization’s accounting system should still identify and allocate costs in accordance with its 

prescribed accounting methodology (see Negotiated Indirect Rate Agreement), however, the 

organization will only be allowed to bill or claim costs in accordance with the terms of the 

award / contract. 

The difference between the incurred indirect cost allocable to an award (based on the 

accounting system) and the billable or claimed indirect cost represents an under (loss) or over 

(windfall) recovery of Indirect Costs. These differences must be properly identified and 

accounted for. 

Reference Documents 

Guidance contained the circulars: 

OMB Circular, A-21, Paragraphs A through H 

OMB Circular, A-122, Attachment A 

OMB Circular, A-87, Attachments A, C, D and E 

FAR Part 31.205, “Selected Costs” 

GPM 630, “Indirect Costs” 

Objective of Review 

The objectives of this review is to ascertain whether: (a) the organization has a current rate 

established with NSF or another Federal agency, (b) the organization is accounting for indirect 

costs in accordance with the established rate methodology (see Negotiated Rate Agreement), 

and (c) the organization is claiming indirect costs in accordance with the terms and conditions 

contained in the Grant. 
39

Areas of Concern 

The following is a list of problem areas relative to the charging of indirect costs. The existence of 

any of these items suggests that a problem may exist and that further investigation is warranted. 

These problem areas include: 

A. Direct charging of normal indirect costs (e.g., business office manager, comptroller, rent). 

B. Inconsistent treatment of certain items as direct or indirect costs (e.g., fringe benefits, toll 

charges on long distance calls, equipment purchases). 

C. Applying the indirect cost rate to an incorrect allocation base (e.g., applying an indirect 

cost rate developed on a salaries and wages base to the total direct costs of a project). 

D. Applying the indirect cost to awards based on contract / grant terms rather than actual 

indirect cost methodology. 

Detailed Procedures 

 The following procedures are intended to serve as a guide in the review and evaluation of 

indirect costs. 

 Steps Comments

1. Determine whether the institution has a 

currently effective indirect cost rate 

established with NSF or another Federal 

agency. 

Note: The Organization may not require a 

negotiated indirect cost rate. For example, 

the organization may have an award with a 

rate established for that award only and 

there is no need to establish a Federally 

Negotiated Indirect Rate. If a negotiated 

rate agreement exists the HHS web site 

(http://rates.psc.gov/new_search.html) can 

be accessed to determine the currently 

approved indirect cost rate and the basis 

used to calculate indirect costs.

1. Based on the review of the organization 

under “Planning for a Site Visit” are any NSF 

awards impacted by the organization not 

having a current Negotiated Indirect Cost 

Rate? 

Is NSF the cognizant agency responsible for 

negotiating an indirect cost agreement with 

this organization on behalf of the Federal 

Government? 

If either of the above applies, discuss with the 

organization the requirements for them to 

submit indirect cost proposals and work on a 

schedule to get the organization up to date. 

2. Determine whether the organization is in 

compliance with the items identified in the 

comments column. 

2. Consistently treating the costing of such 

items as fringe benefits, equipment, materials, 

long-distance toll calls, ADP, etc. 

Determine that the organization can identify 

and segregate unallowable costs. 

Does the organization have policies and 

procedures in place identifying whether costs 

are to be treated as direct or indirect? 

Does the organization have controls that 

identify and segregate unallowable cost?
40

3. Based on the mix of awards being 

reviewed, select one or more awards for 

indirect cost review. (One billing from each 

award selected.) 

3. Determine whether the organization is 

accounting for indirect costs in accordance 

with the established rate methodology (see 

Negotiated Rate Agreement) 

Determine that the organization is claiming 

costs in accordance with the terms and 

conditions contained in the Grant Letter. 

Based on the above sample, are indirect costs 

booked to the project in accordance the 

established accounting methodology? 

Using the sample identified above, determine 

that costs are claimed, through the FCTR, 

based on the terms and conditions of the 

award letter. 

4. Is the organization properly identifying the 

over and under recovery of indirect cost? 

4. Under absorbed indirect cost may be used 

for cost share. 

Recovery of indirect costs above actual 

expenditures can be used to fund additional 

award activity. 

Under/over recovery of indirect costs should 

be shown as other income / loss on the 

financial statements. 

Any cost allocable to a particular award or 

other cost objective may not be shifted to 

other Federal awards to overcome funding 

deficiencies. 

Under recovery of cost is not an expense and 

should not be included in the indirect cost 

pool.
41

Procurement 

Introduction 

Procurement relates to the purchase of supplies and other expendable property, equipment, real 

property, and other services, including subcontracts and consultants. OMB Circular A-110 makes 

a distinction between subawards and contracts. OMB Circular A-133 Section 210 further defines 

subrecipients (subawardees) and vendors (contractors). The procurement standards of A-110 

apply to vendor relationships. OMB Circular A-133 Section 210 Subparagraphs (c) & (d) defines 

goods and services received by vendors as follows: 

Payment for goods and services. Characteristics indicative of a payment for goods and 

services received by a vendor are when the organization: 

1. Provides the goods and services within normal business operations; 

2. Provides similar goods or services to many different purchasers; 

3. Operates in a competitive environment; 

4. Provides goods or services that are ancillary to the operation of the Federal program; 

and 

5. Is not subject to compliance requirements of the Federal program. 

Use of judgment in making determination. There may be unusual circumstances or exceptions 

to the listed characteristics. In making the determination of whether a subrecipient or vendor 

relationship exists, the substance of the relationship is more important than the form of the 

agreement. It is not expected that all of the characteristics will be present and judgment should 

be used in determining whether an entity is a subrecipient or vendor. 

Reference Documents 

OMB Circular A-110, Section 2, “Definitions” 

OMB Circular A-110, Sections 40 through 48, “Procurement Standards” 

45 CFR Ch 6 § 602.3, “Definitions” 

45 CFR Ch 6 § 602.36, “Procurement” 

OMB Circular A-133, Section 210, “Subrecepient and Vendor Determinations” 

Objective of Review 

This section reviews and assesses activities related to the procurement of supplies and other 

expendable property, equipment and other services with Federal funds. The focus is on 

whether the organization has a purchasing manual with written policies and procedures, 

ensuring that procurements are conducted competitively, and that files and detailed records are 

maintained documenting the basis of all procurements and purchases. 

Areas of Concern 

The following is a list of problem areas relative to the review of procurement systems. The 

existence of any of these items on a particular project does not necessarily indicate that an award 

cannot be processed. It does suggest, however, that a problem may exist and that further 

investigation is warranted. 

These problem areas include: 

A. No clear distinction between a procurement award and a subaward. (See introduction 

above.) 
42

B. Lack of written policies and procedures. 

C. Inadequate separation of duties. 

D. Inadequate documentation in procurement files, including inadequate support for 

reasonableness of price. 

Detailed Procedures 

 Steps

1. Review organizational environment:

 Comments

1. Verify the following:

a. Clear lines of authority are delineated.

b. Procurement, receiving, and finance 

functions (accounts payable/disbursing) 

are adequately segregated.

c. Controls are in place to ensure that 

delegations are not exceeded and that 

policies are followed.

d. Approval level for sole source 

procurements is appropriate.

e. Written Standards of Conduct are 

maintained as required by OMB Circular A110 .42.

 2. Review policies and procedures: 2. OMB Circular A-110 .44 requires written

procurement procedures. Of particular 

concern are: 

a. Maximum competition. (The FAR requires 

competition for purchases over $2,500.)

b. Review procedures for other than full and 

open competition to ensure that 

competition is sought to the maximum 

extent practical.

c. Some form of cost and price analysis is 

required in every procurement file (A-110 

.45).

d. Required flow down provisions are 

included in the contracts/agreements.

 3. Transaction Tests 3. Accounting documentation should be 

traced from the check back to the receiving 

report, award document, and requisition. The 

procurement pre-award file should be 

reviewed to verify that procurement policies 

were followed, competition was sought, and 

the awarded amount is justified by an 

adequate cost and price analysis. 

 
43

Sub-awards & Sub-recipient Monitoring 

Introduction 

Determine if the awardee institution or the NSF award being reviewed contained subcontract(s) 

with other organization(s) to perform a substantial portion of the work or research under the 

NSF award. Please note that a differentiation should be made between sub-recipient and a 

vendor (see OMB Circular A-133 section 210 for guidance on determining if a sub-awardee is a 

vendor or a sub-recipient). A vendor provides goods or services in a competitive environment 

as its normal course of business (example - selling computers). A sub-recipient has 

programmatic decision making responsibilities for performance in carrying out a portion of the 

research or project (example – sub-awardee conducts testing and evaluation of chemical 

compounds or materials). 

Sub-recipient monitoring requirements do not apply to vendors. However, prime awardee 

organizations are required to have in place a system to monitor the sub-awards issued by that 

prime on Federally sponsored projects. If the organization being reviewed has sub-awards (and 

is not just purchasing items from vendors to use on the project), they are responsible for 

monitoring the activities of those sub-recipients. 

Reference Documents 

OMB Circular A-110, Section 2, “Definitions” 

45 CFR Ch 6 § 602.3, “Definitions” 

OMB Circular A-133, Subpart B, Section 210, “Subrecepient and Vendor Determinations” 

OMB Circular A-133, Subpart D, “Federal Agencies and Pass-Through Entities” 

General Grant Conditions (GC-1) 

Objective of Review 

Prime awardees are responsible for certain pre-award and post award monitoring of their subrecipients. Exactly what steps are taken and how closely awards are monitored depends on the 

type of subaward, the sub-awardee institution, dollar value or complexity of the subaward, and 

other factors. In addition, the prime awardee may have a plan to target review based on risk. 

Areas of Concern 

The following is a list of problem areas relative to subawards and sub-recipient monitoring. The 

existence of any of these items on a particular project does not necessarily indicate that an award 

cannot be processed. It does suggest, however, that a problem may exist and that further 

investigation is warranted. 

These problem areas include: 

A. Distinction between a procurement award and a subaward. (See introduction above.) 

B. Inadequate pre-award documentation as detailed below. 

C. Subaward agreement missing some, or all, required flow down provisions. 

D. Judgmental nature of adequate monitoring (See A-133 Compliance Supplement on 

Subrecipient Monitoring.) 
44

Detailed Procedures 

Selection, sole sourcing justification, competition, and other additional requirements appear in 

the module on procurement. This section module is limited to the administrative steps taken by 

the awardee as part of the sub-recipient monitoring plan. 

 Steps

1. Sub-recipient Monitoring 

Requirements 

 Comments

1. The prime awardee is responsible for 

determining that the amount to be paid the 

sub-awardee organization is reasonable for 

the work to be performed. 

 Reviewers should note that some 

form of Cost or Price Analysis should 

be performed by the prime awardee to 

document that the amount 

subcontracted for is reasonable in 

relation to the work to be performed. 

The depth of the analysis should be 

related to the dollar amount of the 

subaward. 

 Cost analysis is the review of the 

different items of cost being 

proposed in the subawardees 

budget. If cost analysis is used the 

prime should review the 

subawardees indirect cost rate 

agreement or may need to develop 

an indirect cost rate for that subawardee.

 Price analysis is the comparison of 

different offers from different subawardee organizations where 

multiple proposers provide adequate 

competition.

 

2. Pre-award Review 2. The prime awardee should perform certain 

procedures before making a substantial 

subaward to a sub-recipient. This requires 

that the prime awardee ensure the following 

with regard to the sub-awardee: 

 Ability to perform (both technically and 

administratively) 

 Adequate accounting system (a 

project cost accounting system) 

 Financial capability to perform 

 Appropriate indirect cost rate and 

application base 

 Not been debarred or suspended from 

receiving Federal grants or contracts 
45

3. Making the Subaward 3. Certain compliance requirements on 

Federal awards also apply to subawardees 

under those awards. These are called “flow 

through” provisions. Prime awardees are 

responsible for including these provisions in 

sub-awards using Federal funds. Provisions 

that should be in sub-awards beyond 

statement of work, payment, and deliverables 

include: 

 Audit & access to records 

 Prime awardees right to perform site 

visits both technical and 

administrative 

 Cost Principles (OMB Circulars A-21, 

A-87, A-122, or FAR Part 31) and 

Administrative Requirements 

(procurement in OMB A-110) 

 Non-performance and termination or 

other legal remedies 

 Statutory or regulatory – such as 

Conflict of interest, non-discrimination, 

drug free workplace, animal rights, 

human subjects, and a number of 

grant terms and conditions. (See CG1 Article 8 – Significant Project 

Changes for a list of CG-1 Articles 

that must be included in subaward 

instruments). 

Prime awardees should also consider if there 

is a need to include any special award 

conditions such as the following: 

 Advance or periodic payments, 

 Attaching payment to milestones 

 Reimbursement after performance 

 Progress or technical reporting 

requirements 

 Financial or business reporting 

requirements, and 

 Other special award conditions 

4. Post Award Monitoring 4. Prime awardees are responsible for 

certain post award monitoring of their subrecipients. Exactly what steps are taken and 

how closely awards are monitored depends 

on the type of subaward, the sub-awardee 

institution, dollar value or complexity of the 

subaward, and other factors. In addition, the 

prime awardee may have a plan to target 

review based on risk. However, the following 

is a list of activities prime awardee entities 
46

should be taking on sub-awardee 

organizations through application of the site 

review plan: 

 Some form of risk analysis and 

classification of sub-awardee entities 

or by subaward 

 Evaluate and document performance 

through progress and/or other 

technical reports 

 Receive OMB Circular A-133 reports 

(if over $500,000/year in Federal 

funds) 

 Resolve audit report findings and 

questioned costs if the prime awardee 

is responsible 

 Additional audit work or financial 

reviews may be appropriate 

 Notify Federal government of 

significant developments 

 It may also be necessary to review 

and approve indirect cost rates in 

certain circumstances 

 Payment provisions & liquidation of 

advances 

 Satisfactory progress both technically 

and administratively has been 

documented 

 Close out the award 

5. Sub-recipient Award Monitoring 

Checklist 

5. Answers to the following questions should 

be obtained: 

 Does the prime awardee have a plan 

in place for monitoring subawardees? 

 Does this plan include a risk 

assessment to target certain subawardee organizations for more 

detailed review? 

 Is there documentation that the subawardee monitoring plan is being 

implemented? 

 Does the prime awardee just pay 

invoices as they are submitted or is 

there a technical or business review of 

the invoices prior to payment? 

 Does the prime awardee perform 

technical or business site visits to 

monitor progress? 

 Are copies of such site visit reports 

available? 

 Has the prime awardee insured that 

required A-133 reports are received 
47

and findings in those reports 

pertaining to the subaward are 

followed up on? 

 Does the prime ever require back up 

supporting documentation prior to 

approving an invoice? 

 Has the prime performed audits or 

financial reviews on sub-awardee 

organizations? 

 Are required reports (monthly status, 

annual progress, or final technical) 

being received in a timely manner? 

 What are the prime’s closeout 

procedures when the subaward is 

completed? 

 Are there any other sub-awardee 

monitoring activities undertaken by 

the prime awardee (example – PI site 

visit to sub-awardee site to meet with 

and discuss progress). 

 Select a subaward and check the file 

to determine if documentation exists 

to show the prime awardee is doing 

an adequate job of monitoring? 
48

Property & Equipment

Introduction 

Many NSF award budgets provide for the purchasing of equipment to accomplish grant 

objectives. Awardee institutions that purchase equipment with NSF funds are required to 

maintain adequate property records, maintain an inventory listing of all property, and maintain 

safeguards against loss, theft, and damage. 

Equipment is defined by the US Government as non-expendable property costing more than 

$5,000 and having a useful life of more than one year. Awardee institutions can define the 

equipment threshold using more restrictive terms in their own internal policies and procedures 

(i.e. $3,000 and two years useful life) but, must be consistent in application. Only a few NSF 

awards provide for the acquisition of real property (land) and these cases are mainly limited to 

facilities and MREFC projects. 

Reference Documents 

Administrative Requirements contained in: 

OMB Circular A-110, Section 2, “Definitions” 

OMB Circular A-110, Sections 30 through 37, “Property Standards” 

45 CFR Ch 6 § 602.3, “Definitions” 

45 CFR Ch 6 § 602.36, “Procurement” 

Grant Policy Manual Section 540, “Property Management Standards” 

Cost Principles contained in: 

OMB Circular A-21, Subparagraphs J.14, “Depreciation and Use Allowances” and J.18, 

“Equipment and Other Capital Expenditures” 

OMB Circular A-122, Attachment B, Items 11, “Depreciation and Use Allowances” and 15, 

“Equipment and Other Capital Expenditures” 

OMB Circular A-87, Attachment B, Items 11, “Depreciation and Use Allowances” and 15, 

“Equipment and Other Capital Expenditures” 

Objective of Review 

To assess whether the claimed equipment purchased with Federal funds are being accounted 

for in accordance with Federal rules and regulations. Also, to ascertain whether equipment 

purchased using NSF funds are for scientific purposes, not general office equipment. 

Areas of Concern

The following is a list of problem areas relative to the charging of property and equipment. The 

existence of any of these items on a particular project does not necessarily indicate that an award 

cannot be processed. It does suggest, however, that a problem may exist and that further 

investigation is warranted. 

These problem areas include: 

A. Inadequate documentation of Federally funded equipment. 

B. Failure to exclude Federally funded equipment from the depreciation schedule or indirect 

cost pool. 
49

C. Failure to exclude claimed direct equipment from the allocation base. 

D. Failure to document and demonstrate the allocability of “normally general office 

equipment” to the NSF award. 

Detailed Procedures 

 Steps

1. Documentation to be obtained 

 Comments

1. Copies of the following should be obtained:

 Awardee policies and procedures 

regarding equipment and inventory 

 Most recently completed inventory

2. Title to Equipment 2. For most NSF awardees (colleges and 

Universities and Non-profits) title to 

equipment vests with the awardee 

organization upon completion of the award or 

after the equipment is no longer needed. 

For commercial organizations and large 

research facilities, NSF typically either retains 

title or maintains a reversionary interest in the 

property (these awardees should notify NSF 

after expiration of the award to obtain 

disposition instructions). 

Awardees are not to use NSF purchased 

property to provide services to outside 

organizations at a fee that is less than private 

companies charge for equivalent services. 

Property purchased with NSF funds should 

be first used on that project, then on other 

NSF projects, and then on other Federally 

sponsored projects. User charges shall be 

treated as program income. 

3. Property Records 3. The awardees property management or 

inventory system for Federally purchased 

equipment should be accurately maintained 

and should include the following information: 

 Description of the item of equipment 

 Manufacturer’s serial number or other 

identification number 

 Source of equipment and award 

number that the funding came from 

 Acquisition date 

 Share of Federal participation if 

awardee also provided funds to 

purchase the equipment 

 Location of Equipment 
50

 Condition of the equipment 

 Unit Acquisition cost 

 Disposition data if the equipment is 

disposed of or sold 

 Detail if Federally owned or if title 

vests with the awardee 

4. Additional Review Steps: 4. Obtain answers to the following questions: 

 Does the organization have 

procedures in place to insure that only 

equipment that is necessary for the 

sponsored activity is purchased? Is 

there a check to see if such 

equipment is reasonably available 

within the institution prior to 

purchasing it? 

 Is equipment purchased with NSF 

funds of a scientific nature and 

purpose or is it general office 

equipment? This can be particularly 

tricky as far as computers go because 

they can have multiple uses and the 

current use may be difficult to 

determine. If in doubt, then consult 

with the program officer or see if it 

was approved in the original approved 

budget. 

 Does the awardee undertake a review 

and inventory of equipment at least 

every two years? What was the date 

of the most recent inventory? 

 Do the awardee inventory records 

contain all the information or data 

fields identified above? 

 Do the awardee accounting system 

and property records show what 

equipment was purchased with 

Federal funds and exclude that 

portion from depreciation or use 

allowances claimed in calculating 

indirect costs? How is this done? 

 What is the institution's policy with 

respect to the use of equipment 

purchased after it is no longer needed 

on the NSF project? What if it is only 

needed intermittently? 

 If time permits and the awardee has 

purchased a number of items of 

equipment with NSF funds, the site 

reviewers may want to select a 

sample of equipment from the 
51

inventory records and have the 

awardee institution take site reviewers 

to “touch” the property. Inventory 

serial numbers should be verified to 

equipment on location. 

Final Project Reports 

Introduction 

NSF requires technical project reports for all assistance awards. Information from these reports is 

used in annual reports to Congress to demonstrate the Foundation’s performance as mandated 

by the Government Performance and Results Act (GPRA) of 1993. These reports also provide 

NSF Program Officers and administrative offices with information on the progress of supported 

projects and the way these funds are used. Information in these reports may be made available 

to the general public through the Freedom of Information Act (FOIA). 

Reference Documents 

OMB Circular A-110, Section 51, “Monitoring and Reporting Program Performance” 

45 CFR Ch 6 § 602.40, “Monitoring and Reporting Program Performance ” 

GPM Sections 342, “Final Project Reports” and 812.3, “Release of Project Reports” 

Objective of Review 

Within 90 days following expiration of the grant, a final project report must be submitted 

electronically via the NSF FastLane system. In addition, the grantee also shall provide to the 

cognizant NSF program officer, within 90 days following the expiration of the grant, any unique 

reports or other end items specified in the award letter (e.g., special cost sharing reports), 

including any report requirements set forth in any NSF brochure, guide, solicitation, etc., 

referenced in the award as being directly related to either the award or the administration of the 

award. 

The primary objective of the review is to determine whether the institution has a system in place to 

assure that final project reports are submitted in a timely manner. 

Areas of Concern 

The following is a list of problem areas relative to the charging of final project reports. The 

existence of any of these items on a particular project does not necessarily indicate that an award 

cannot be processed. It does suggest, however, that a problem may exist and that further 

investigation is warranted. 

These problem areas include: 

A. Failure to submit the final project report 

B. Lack of written policies & procedures regarding the submission of the final project 

reports. 

C. Inadequate grant closeout policies and procedures. 

D. Inadequate exit interview procedures for principal investigators leaving the institution. 

Detailed Procedures 

 Steps Comments
52

1. Request a list of outstanding final projects 

reports from the DIAS Special Assistant for 

Risk Assessment. Present the list to the 

organization. 

1. Inform the AOR and Sponsored Research 

Office of their responsibility to ensure that 

final project reports are timely submitted and 

of the increased emphasis by NSF to make 

sure that these reports are filed. 

• NSF Program Officers are responsible for 

ensuring that Final Project Reports on 

prior, expired grants have been submitted 

by PI/PDs before new grants are made to 

those PI/PDs. 

• Failure to provide final technical reports 

on a timely basis will delay NSF review 

and processing of pending proposals for 

all identified PIs and co-PIs on a given 

award. 

2. Request a copy of policies & procedures 

for submission of Final Project Report. Also 

discuss whether these policies have been 

incorporated into the grant and / or award 

closeout procedures.
53

IV. POST SITE-VISIT ACTIVITIES 

SITE VISIT REPORT REVIEW PROCESS

As soon as is practical upon the completion of the award monitoring site visit, the Team Lead / 

Cost Analyst should submit the draft site visit report and the draft post site visit letter to the 

CAAR Team Leader for Monitoring for review and approval. 

The CAAR Team Leader for Monitoring should: 

 Review the report and letter for completeness, 

 Ensure that adequate documentation is included for follow-up issues, and 

 Indicate that they have reviewed and approved the report. 

Beginning in FY 2006 site visit reports and letters should be issued within 30 days of the 

completion of the site visit. 

MONITORING FOLLOW-UP 

If the post site visit letter articulates any issues requiring follow-up with the awardee, then the 

Grants and Agreement Specialist should monitor the situation to ensure that the awardee 

responds to the letter within 30 days. The Grants and Agreement Specialist must then provide 

a copy of the awardee response to the Cost Analyst / Team Lead. The Grant and Agreement 

Specialist will work with the Cost Analyst to determine whether the response is sufficient in 

terms of follow-up. 

If the awardee does not respond within 30 days, then the Grant and Agreement Specialist 

should place a call to the awardee requesting a written response within 10 days. If there is still 

no response, then a delinquency letter should be mailed to the awardee (a sample letter is 

provided under Appendix E). 

The Team Leader for Audit Resolution & Follow-up will continue to work with the organization to 

ensure that issues are resolved. The Team Leader will document the continued follow-up effort 

on the Follow-up Form, Appendix 14
54

APPENDIX B: Sample Confirmation Letter 

 NATIONAL SCIENCE FOUNDATION 

 4201 WILSON BOULEVARD 

ARLINGTON, VIRGINIA 22230

(Fill in Date Here) 

(Fill in Name of Individual Here)

Authorized Organizational Representative 

(Fill in Name of Organization Here)

(Fill in Street Address Here)

(Fill in City, State and Zip Code Here) 

Dear (Fill in Name of Individual Here): 

This is to confirm the arrangements regarding the NSF site visit to (Fill in Name of Organization Here), 

to be held (Fill in Date and Time Here). A representative from our Division of Grants and 

Agreements (DGA), (Fill in Name of Grant and Agreement Specialist Here), and Cost Analysis and Audit 

Resolution (CAAR) representative (Fill in Name Of Cost Analyst Here), will participate in the review. 

This site visit is part of NSF's award monitoring and oversight of business, management, and 

administrative activities at our awardee institutions. The purpose of the review is to evaluate the 

effectiveness and efficiency of the policies and procedures that your organization has in place to 

manage federal funds, and to provide an opportunity for NSF to offer business assistance. 

NSF is increasing its post-award monitoring activities at awardee institutions to ensure that federal 

funds, particularly those provided by NSF, are appropriately expended and are well managed. Please 

understand that we are not conducting an audit, but rather we will assess your organization's systems 

as they relate to the administration of NSF funds. In particular, we will: (Please note that the targeted 

areas should be based on the areas identified in the Annual Risk Assessment for this institution. The list will be 

further refined during the pre-visit discussions with the program office, DGA and CAAR. The bulleted items below 

should be tailored by the specialist to focus on the targeted areas so that the organization will be prepared when NSF 

arrives to do the monitoring visit.) 

•

•

•

•Answer any questions you may have for NSF 

If you have any questions, give me a call. Feel free to invite any other employees whom you feel 

may need to join us. Please e-mail me directions to your office. We are looking forward to meeting 

with you. 
55

Sincerely, 

(Fill in Name Grant and Agreement Specialist Here)

NSF Grant and Agreement Specialist 

Phone: (Fill in Phone Number of Grant and Agreement Specialist Here)

Fax: (703) 292-9142 

Email: (Fill in E-mail Address of Grant and Agreement Specialist Here) 

cc: (Fill in Name of NSF Program Manager Here), NSF Program Manager 

(Fill in Name of Additional DGA Reps Here), NSF Grant and Agreement Specialist 

(Fill in Name of Team Lead / Cost Analyst Here), NSF Cost Analyst 

(Fill in Name of Additional Cost Analysts Here), NSF Cost Analyst 
 

SITE VISIT REPORT

Prepared by: Name of Lead CAAR Analyst 

Reviewed by: 

Site Visit Date: Date through Date 

Awardee Organization: Name 

City, State 

Organizational Contacts & Phone 

Numbers: 

AOR Name, Organizational Title 

Telephone Number 

NSF Participants: Name & Division 

Organizational Participants: All other participants other than AOR 

Award(s) Reviewed: Please limit to awards identified in the risk assessment model. 

Purpose of Visit: [ ] Standard Award Monitoring Visit from DGA Annual Schedule 

[ ] Initiated by the Cost Analysis and Audit Resolution Branch 

[ ] Requested by the NSF Program 

[ ] Other: 

_______________________________________________ 

Program Manager or Contact: Name, Directorate/ Division 

Program Observations: Brief summary of program’s assessment 

Pre-visit Observations and Risk 

Factors: 

A general statement that articulates pre-visit risk assessment including 

targeted areas to be reviewed. 

General Observations: Overall assessment of the site visit. (optional) 

Core Review Areas: For the following areas, the analyst should provide a brief summary of each 

core review area. It can be a description of the actual practices and the 

analyst’s assessment of the practice. The summary assessment should either 

state that “no exceptions were noted” or “ exceptions were noted in the 

following areas”. If any recommendation is made, it should be highlighted 

with “bolding”. Also, for any area of concern or exception, please be sure 

to include the appropriate citation. 

APPENDIX C: This document is formatted as a TABLE instead of a simple report. It is 

suggested that users “turn on the table gridlines” to complete your report. It makes it 

easier to line up your comments with the headings. Also, if the paragraphs don’t align, use 

“Format/ Paragraph/Spacing” to adjust the spacing before and / or the entry. Finally, don’t 

forget to delete this textbox before saving the report and turn the gridlines off. 
57

General Management 

 Accounting & Financial System 

 FCTR Reconciliation 

Targeted Review Areas: For the following areas, the analyst should provide a brief summary of 

each targeted review area. It can be a description of the actual practices 

and the analyst’s assessment of the practice. The summary assessment 

should either state that “no exceptions were noted” or “ exceptions were 

noted in the following areas”. If any recommendation is made, it should 

be highlighted with “bolding”. Also, for any area of concern or exception, 

please be sure to include the appropriate citation. Finally, if the area was 

not targeted for review and not reviewed, it should be deleted from the 

report. 

Time and Effort Reporting 

 Fringe Benefits 

 Travel 

 Consultants 

 Cost Sharing 

 Participant Support Costs 

 Indirect Costs 

 Procurement 

 Sub-recipient Monitoring 

 Property & Equipment 

Other Matters to be Reported: Other grant issues not included in the AMBAP Guide. Not a required 

entry. 

Follow-up: Not a required entry. However if there are findings that require follow-up, 

we should include a statement that a letter will be sent to organization about 

the issue and action to be taken by the organization. It is expected that the 

organization will reply within 30 days. 

Attachments/Supporting 

Documentation: 

Not a required entry. 

Copy to:  _______, Program Manager, Directorate/Division 

 _______, Branch Chief, BFA/DGA 

 _______, Cost analyst, BFA/DGA 

 _______, Grant and Agreement Specialist, BFA/DGA 

 Monitoring Chron File, BFA/DIAS/CAAR 
58

APPENDIX D: Sample Post Site Visit Letter 

 NATIONAL SCIENCE FOUNDATION 

 4201 WILSON BOULEVARD 

ARLINGTON, VIRGINIA 22230

Division of Grants and Agreements (DGA) 

Room 480 

(703) 292-8210 

(703) 292-9143 (Fax)

(Fill in Date Here) 

(Fill in Name of Individual Here, Organizational Title)

Authorized Organizational Representative 

(Fill in Name of Organization Here)

(Fill in Street Address Here)

(Fill in City, State and Zip Code Here) 

Dear (Fill in Name of Individual Here): 

This letter follows-up the recent NSF site visit to your organization on (Fill in Dates Here). (Fill in Name of 

Team Lead / Cost Analyst Here) and I appreciate the time and effort that your staff expended during our 

review of your organization’s policies, procedures, and practices used for Federal grant administration. The 

site visit was productive and useful from NSF’s standpoint, and I hope your organization benefited as well. 

 

Although no major exceptions were noted in our review, we discussed the following recommendations with 

representatives of your organization: 

(1) (Describe recommendation here) 

(2) (Describe recommendation here) 

(3) (Describe recommendation here) 

(4) (Describe recommendation here) 

(5) (Describe recommendation here) 

(6) (Describe recommendation here) 
59

Please respond to me within 30 days from the date of this letter on the status of actions you have taken or 

plan to take regarding our recommendations. 

We would like to extend a special thanks to (Fill in Names of Primary Organizational Participants Here) and 

all the other staff members that we met with over the course of the site visit. 

 

Sincerely, 

(Fill in Name of Grant and Agreement Specialist Here) 

Grant and Agreement Specialist 

cc: _______, Program Manager, NSF/Directorate/Division 

_______, Branch Chief, NSF/BFA/DGA 

_______, Cost analyst, NSF/BFA/DGA 

_______, Cost Analyst, NSF/BFA/DIAS 

Monitoring Chron File, BFA/DIAS/CAAR 
60

 APPENDIX E: Sample Delinquency Letter 

 NATIONAL SCIENCE FOUNDATION 

 4201 WILSON BOULEVARD 

ARLINGTON, VIRGINIA 22230

Division of Grants and Agreements (DGA) 

Room 480 

(703) 292-8210 

(703) 292-9143 (Fax)

(Fill in Date Here) 

(Fill in Name of Individual Here, Organizational Title) 

Authorized Organizational Representative 

(Fill in Name of Organization Here)

(Fill in Street Address Here)

(Fill in City, State and Zip Code Here) 

Dear (Fill in Name of Individual Here): 

We sent a letter dated (Fill in Date Here) requesting that you provide a response to me within 30 days. The 

due date for your response was (Fill in Date Here). When we did not receive your response, I followed up 

verbally with you on (Fill in Date Here) and requested that you provide a response within 10 days. We still 

have not received a response. 

We now consider your response to be delinquent, and your response is required on the status of actions you 

have taken or plan to take regarding our recommendations. Please respond to me within 10 days from the 

date of this letter in order to avoid possible actions that may affect your current awards. If you have 

questions or need assistance, please feel free to contact me. 

Sincerely, 

(Fill in Name of Grant and Agreement Specialist Here) 

Grant and Agreement Specialist 

cc: Program Manager, NSF/Directorate/Division 

Team Lead / Cost Analyst, NSF/BFA/DIAS/CAAR 

Branch Chief, NSF/BFA/DGA 

Cost analyst, NSF/BFA/DIAS 

Monitoring Chron File, BFA/DIAS/CAAR 
61

APPENDIX 1: Sample DGA/CAAR Consultation 

Grantee Name 

City, State 

Review of the CAAR Files

Audit Resolution Issues: 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

Cost Analysis/ Indirect Rate: 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

Cognizant Federal Agency Issues: 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 
62

APPENDIX 1: Sample DGA/CAAR Consultation 

Grantee Name 

City, State 

Consultation with DGA

DGA Branch Chief: ____________________ 

DGA Team Leader: ____________________ 

Areas of Concern 

On-Going Issues: _______________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

Flags in the system & reasons: _____________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

Business Assistance Needed: ______________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 

______________________________________________________________________ 
63

APPENDIX 2: Sample Program Office Consultation 

Grantee Name 

City, State 

Consultation with Program Officials

Program Officer ________________________ Division ______________________ 

Award No. _______________

How well does the project, as implemented, reflect the goals, objectives, activities and services 

described in the proposal? 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

Is satisfactory programmatic progress being achieved? 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

Are there definitive programmatic milestones? 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

Have the Annual Reports been submitted? ____________ Received on Time? ____________ 

___________________________________________________________________________ 

Other Concerns: 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 

___________________________________________________________________________ 
64

APPENDIX 3: Sample Pre-visit Risk Assessment 

Grantee Name 

City, State 

Pre-site Visit Risk Assessment

Based on discussion with the program officer(s), DGA and the review of our files, we will cover 

the following areas during our site visit. These sections are in addition to the areas determined 

to be mandatory for all reviews of General Management, Accounting System, and FCTR 

Reconciliation: 

Targeted Review Area Concern(s):

 Time & Effort Reporting 

 Fringe Benefits 

 Travel 

 Consultants 

 Cost Sharing 

 Participant Support Costs 

 Sub-recipient Monitoring 

 Indirect Costs 

 Procurement 

 Property & Equipment 

 Final Project Reports 

 Other Areas of Concern 
65

APPENDIX 4: Sample Entrance Conference 

Grantee Name 

City, State 

Entrance Conference Notes

Date: ____________________________________ 

Attendee Name Title Telephone No.

 

Notes: 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 
66

APPENDIX 5: Sample Exit Conference 

Grantee Name 

City, State 

Exit Conference Notes

Date: ____________________________________ 

Attendee Name Title Telephone No.

 
67

APPENDIX 5: Sample Exit Conference 

Concerns & Issues 

Review Area Comments/ Concerns/ Recommendation 

 

 

 

 

 

 

 

 

 

Technical Assistance 

Briefly describe below any technical assistance provided to the grantee during the site visit. This 

includes, but is not limited to, assisting the grantee in properly completing financial status 

reports, requesting grant funds, and providing needed information to various offices within 

NSF. 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

____________________________________________________________________________________ 

Best Practices 

Record any potential best practices found during the visit. 

 

 

THANK THE AWARDEE FOR COOPERATION. 
68

APPENDIX 6: Sample Award Brief 

Grantee Name 

City, State 

Grant Brief

Award No. ___________________________________________________________________ 

Purpose of Award: ____________________________________________________________ 

______________________________________________________________________________ 

______________________________________________________________________________ 

Indirect Rate Clause: ________________________________________________________ 

Key Personnel Clause: _______________________________________________________ 

Program Income: ____________________________________________________________ 

Other Special Clauses: _______________________________________________________ 

Period of Performance: 

Original Award Exp. Date 

(Amend No. 

_____)

Exp. Date 

(Amend No. 

_____)

Grantee 

No Cost 

Extension

Exp. Date 

(Amend 

No. _____)

_________ to _________ 
69

APPENDIX 6: Sample Award Brief 

Original 

Award #001 #002 #003 #004 #005 Grand Total

Salaries & Wages 41,17 $ 80,60 5 $ 0 $ - $ - $ 10,95 - $ 132,731 6 $ 

Fringe Benefits 12,044 19,40 0 - - - 34,64 3,204 8

Subtotal 53,21 $ 100,00 9 $ 0 $ - $ - $ 14,16 - $ 167,37 0 $ 9

Equipment

Travel 15,680 750 - - 3,87 - 20,30 8 8

Participant Support Costs 336,000 10,500 - 134,00 0 83,10 - 563,607 7 

Other Direct Costs 71,440 3,660 - - 30,03 - 105,137 7 

Indirect Costs - - - - - - -

 -

Total Costs 476,33 $ 100,00 9 $ 14,910 0 $ $ 134,000 $ - $ 856,431 131,182 $ 

Cost-Sharing Requirement $ 45,00 321,923 $ 0 $ - $ 73,583 $ - $ 526,37 85,869 $ 5

admin only

Amendment Number

Grantee Name

City, State

Grant No. XXX-123456

COMPUTATION OF CUMULATIVE AWARD AMOUNT
70

APPENDIX 7: Sample FCTR Reconciliation 

Comments: 

Is it systemic? 

Disposition -- Adjusting Journal Entry (w/p ) 

Grant No. XXX - 9999999

(A) Net Disbursements per FCTR 306,300 $ 

(SF272A, Column 5)

Cost per Project Cost Ledger per dated 

(Fund No. 2497)

Jan-04 66,326 $ 

Feb-04 50,450 

Mar-04 120,673 

(B) 237,449 $ 

Difference (A-B) 68,851 $ 

Reconciling Items

Unreported disbursements for the quarter 

ended 12/31/03 $ 68,851

Un-reconcilable difference (0) $ 

Grantee Name

City, State

Reconciliation of FCTR to Accounting Books & Records

Quarter ended 3/31/04
71

APPENDIX 8: Sample General Management Survey 

Survey of Awardee’s Organization and General Management System 

Part A -- Basic Organization 

 _ 

(Lead Reviewer) 

________________ 

(Date Updated) 

 Grantee Name 

 Address 

 Tel: 

1. Type of Organization 

 College or University 

 Non-Profit 

 State or Local Government 

 Commercial 

2. Principal Officers 

 (Name) President or Head

 Sponsored Research Head (Title) 

 (Chief Financial Officer) & Authorized Organizational Representative 

 

3. Incorporated in State of __ 

4. Date of Incorporation __ 

5. Type of Operation: 

 Educational Research Services Other ______ 

Description of Principal Services or Products Manufactured __________________________ 

__________________________________________________________________ 

6. Number of Employees: Direct __________ Indirect __________ 

7. Annual Revenue Volume $: _____________ FYE: ____________ 

Breakdown of Revenue -- % or $ 

 Private or Commercial Federal Government Total

 ____ ______ 100% or $ 

8. Plant and Facilities: Owned Leased Other explain 

 If leased, any relationship between the lessee and lessor? 

Yes ( ) No ( ) File Ref ______ 

9. Cognizant Oversight Agency Cognizant Audit Agency 

 

Name of Outside Auditors 
72

APPENDIX 8: Sample General Management Survey 

 YES NO N/A COMMENT 

B. General Information 

Does the organization have a Board of 

Directors with specific functions and 

responsibilities (By-laws)? Obtain list of 

officers. 

Are minutes of the Board of Directors' 

meetings maintained? (Review minutes for 

items related to financial management 

systems issues). 

 

Is there an organizational chart or similar 

document establishing clear lines of 

responsibility and authority? (Obtain a 

copy). 

 

Are duties for key employees of the 

organization defined? (Obtain a list of key 

employees). 

 

 

C. Budgetary Controls 

Does the organization use an operating 

budget to control project funds? 

 

Are persons in the organization who 

approve budget amendments authorized to 

do so by the proper officials? 

 

Are there budgetary controls in effect to 

preclude incurring obligations in excess of 

total funds available for an award? 

 

Are there internal controls that preclude a 

principal investigator from re-budgeting 

cost without prior approval? 

 

Are re-budgeting approvals in writing? 

Are re-budgeting requests ever denied? 

Are the budgets revised accordingly? 

Are the approval actions in compliance with 

NSF policy, especially regarding participant 

support? 

 

 

D. Grant Fund Expenditure Approval 

System 

 

Does the organization have an expenditure 

approval process established? 

 

Are these procedures describing the process 

in writing? 

 

Are approval actions in compliance with 

NSF policy? 

 

Who is authorized to request NSF funds? 

To whom does this person(s) report? 

Additional Notes: 
73

APPENDIX 9: Sample Accounting System Survey 

Grantee Name 

City, State

Accounting System Survey

Accounting Period, FYE: ______________________ 

NSF participation: ___________________________ 

[Government Revenue ÷ Total Revenue] = % of participation 

Cognizant Federal Agency ___________________________________________________ 

Cognizant Government Audit Agency _________________________________________ 

Name of Outside Auditors ___________________________________________________ 

Accounting Software: ___________________________ 

Inventory of Books of Account

Generic Name Institutional Report Name Institutional Report No. 

General Ledger 

Project Cost Ledger 

Payroll 

T&E Reporting 

Other Ledgers & 

Journals:

 

Accounting Manuals

Does the organization have written policies & procedures? __________ 

Last Update _______ 

(Attach a copy of the Table of Contents or Listing of Manuals) 

Is there a Chart of Accounts? 

 Last Update ________ Description of Accounts ___________ 

Are there written procedures for the determining reasonableness, allocability and allowability? 

Are there written procedures for the filing and maintenance of supporting documentation of 

transaction into the accounting system? 

Does the Project Cost Ledger identify source & application of Federal Funds? 
74

APPENDIX 9: Sample Accounting System Survey 

Please explain the treatment of Unallowable costs: 

 Direct or Project Costs: ________________________________________________ 

 _____________________________________________________________________ 

 _____________________________________________________________________ 

 _____________________________________________________________________ 

Indirect Costs: ________________________________________________________ 

 _____________________________________________________________________ 

 _____________________________________________________________________ 

 _____________________________________________________________________ 

Concerns Noted: 

 _____________________________________________________________________ 

 _____________________________________________________________________ 

 _____________________________________________________________________ 
75

APPENDIX 10: Sample Cost Sharing Reconciliation 

Grantee Name 

City, State 

Cost Sharing Reconciliation 

 

Award No. 

 

Awardee Cost Sharing Report No. 

Annual Report Filed 

 

Required Cost Sharing Amount 

 

Cost Sharing Provided-to-Date 

( per the Annual Report) 

 

 

Outstanding Cost sharing Amount 

 

Questioned Cost Sharing 

General Nature of Cost Sharing 

Provided: 

 

 

 

Description of Cost sharing 

Documentation: 

 

 

 ` 

 
76

APPENDIX 11: Sample Expenditure Testing & Verification 

Award No.

Category 

Tested

Transaction Type & 

Identification No. 

Account. 

No. Item Description

Trans. 

Amount

Questioned 

Cost Due To:

Expenditure Testing

Grantee Name

City, State
77

APPENDIX 12: Sample Participant Support Analysis 

Grantee Name 

City, State 

Participant Support Cost Analysis 

 

Award No. 

 

Budgeted Participant Support Cost 

 

Actual Particpant Support Cost 

Provided-to-Date 

 

 

Unexpended Participant Support Cost 

 

Questioned Participant Support Cost 

General Nature of Participant 

Support Cost Provided: 

 

 

 

Description ofParticipant Support 

Cost Documentation and 

Accounting Treatment: 

 

 

 ` 

 
78

APPENDIX 13: Sample Workpaper Index 

SITE VISIT & MONITORING INDEX

Grantee: 

Address: 

Representative’s Name and Title: , Executive Director

Phone Number:999-999-9999 FAX Number: 999-999-9999 

ASSIGNMENT DESCRIPTION: Monitoring Site Visit ASSIGNMENT NO: A-XX

Cost Analyst: 

W/P REF. DESCRIPTION 

Tab I Site Visit Summary 

A Site Visit Report 

B Post Site Visit Letter 

C Disposition of Findings 

 

Tab II Correspondence 

D Exit Conference 

E Entrance Conference 

F Site Visit Notification Letter 

G Misc. Correspondence 

Tab III NSF Data 

H FCTR dated _______ w/ Reconciliation 

J Award Brief / Grant Letter & Mods / Cooperative Agreement 

 

Tab IV Grantee Data 

K Project Cost Ledger & other financial data 

L Annual Cost Share Report for Program Year ______ 

 

Tab V Risk Assessment 

M Pre- Visit Risk Assessment 

N Program Office Consultation 

O DGA / CAAR Consultation 

 

Tab VI Core & Targeted Reviews 

P General Management 

Q Accounting & Financial System Review 

R Targeted Modules 

-1 

-2 

-3 
79

APPENDIX 14:Sample Follow-up Form 

CAAR Follow-up Analysis 

Organization Name 

City, State 

Site Visit No. _________ 

Issues & Concerns Organization's Response

*Reference *References Adequate Inadequate

Time & Effort Reporting Policies 

& Procedures, Tab B Letter 

dated September 27, 2004

X

Subrecipient Monitoring Polices 

& Procedures, Tab B Letter 

dated September 27, 2004

X

Cost Sharing Policies & 

Procedures, Tab B Letter dated 

September 27, 2004

Organization did not provide policies and 

procedures as requested in DGA letter dated 

6/16/04. A 2nd request was sent by this office on 

1/1/05. The Award system was flag, until an 

adequate response is received.

X

CAAR Determination

*References located in CAAR Site Visit Files

_______________________ 

Tamara Bowman, Cost Analyst 

______________________ _____________ 

Alex Wynnyk, Team Leader Date 

CC: Rosalind Jackson-Lewis, DIAS Team Leader Monitoring & Business Assistance 

 ________________, DGA Grant Specialist 

 ________________, DGA Branch Chief 

 ________________, directorate, Program Officer