The UNC
Policy Manual
500.5
Adopted
03/06/02
Purpose.
The University of North Carolina receives reimbursement of Facilities and
Administration (F&A) costs related to grants and contracts and is expected
to allocate these funds within the appropriate state and federal
guidelines. Pursuant to the provisions
of Senate Bill 1005, Section 31.14 (2001), the UNC Board of Governors is
required to report to the Joint Legislative Education Oversight Committee by
March 1, each year, the amount of overhead receipts for the University System
and the use of those receipts.
Background.
F&A costs (sometimes called indirect or overhead receipts) are calculated
for such items as facilities maintenance and renewal, libraries, salaries of
technical, compliance and administrative personnel, equipment, scholarly
development, and facilities support.
F&A rates are set by negotiation between the federal government and
each university. Lower rates are often
established statutorily or by policy by certain programs and sponsors.
Under federal OMB Circular A-21 indirect costs generally reimburse
for costs of the grants and contracts operations of the institution and other
overhead expenses of the university in a manner consistent with the formulae
under which the funds were recovered.
Internal university controls pertaining to the compliance requirements
for sponsored project expenditures under OMB Circular A-133 are designed to
provide reasonable assurance regarding the achievement of the following
objectives:
1. Transactions
are properly recorded and accounted for in order to permit preparation of
reliable financial statements and reports and maintain accountability over
assets.
2. Transactions
are executed in compliance with laws, regulations and provisions of federal and
state laws and in accordance with sponsored agreement terms.
3. Funds,
property, and other assets are safeguarded against loss from unauthorized use
or disposition.
Requirements
1. UNC
institutions determine expenditure of F&A receipts. The chancellor of each constituent
institution shall expend F&A funds only to support scholarly development of
its faculty, staff and students or to ensure that the campus infrastructure is
supported to enhance such scholarly activities.
2. In
a format to be provided by the Office of the President, each campus will report
by December 1, the amount of F & A funds received, amount expended by
purpose, and uncommitted balance. A
report will be made to the Board of Governors at the February board meeting.
3. Chancellors
shall formulate and submit a copy of an administrative procedure for the use
and reporting of F&A funds to the President, consistent with Board of
Governors’ guidelines for the expenditure of F&A funds.