Sample Desk Review Letter

Although the board of directors had delegated the authority to approve proposals and accept awards and subsequent amendments to the associate vice president of sponsored programs, this delegation had not been prepared in writing. As a result of the desk review, the awardee drafted and implemented delegation of authority policies and procedures. These policies and procedures formally authorized the associate vice president of sponsored programs to make these types of approvals.

The awardee developed written policies and procedures to document existing processes for accounting for unallowable costs. The policies and procedures incorporated the following: 

• The title of the individual who identifies unallowable costs prior to incurrence.
• The title of the individual who identifies unallowable costs after incurrence and the process by which they make corrections if errors are identified. 
• The locations of where unallowable (both direct and indirect) costs are recorded. 
• The process used to account for conditionally unallowable costs. 
• Instructions regarding how unallowable indirect costs are segregated from unallowable direct costs so as to ensure that unallowable indirect costs are not included in the awardee's indirect cost rate calculation.

The awardee developed written policies and procedures for cost transfers that were prepared as a result of the desk review. These policies indicated: 

• The title of the individual who initiates cost transfer requests.
• The title of the individual who approves cost transfer requests (typically should not be the Project Manager/Principal Investigator/initiator of request).
• The title of the individual who processes cost transfer requests (typically should not be the Project Manager/Principal Investigator). 
• A deadline (90-180 days from expense incurrence) for processing cost transfer requests. 
• The requirements for a written justification needed to support the request and additional justifications required for cost transfer requests submitted after the standard deadline. 
• A list of the supporting documentation required to process cost transfer requests.

The awardee developed policies and procedures to provide guidance to employees responsible for the filing and management of supporting documentation for accounting transactions and record retention. The awardee based much of the text for its policy on 2 CFR 215.53, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations: Retention and access requirements for records,” which requires that “records pertinent to an award be retained for a period of three years from the date of submission of the final expenditure report,” but adapted some of the text to be specific to its needs. The policies and procedures included a listing of the documentation required to be maintained for each type of accounting transaction and a retention period for grant related documents.

The awardee developed a comprehensive set of policies and procedures (e.g., payroll, petty cash, accounts payable, accounts receivable) to provide written guidance to employees performing accounting functions. In most cases, the university documented existing practices. In other cases, it prepared new policies and procedures to provide more consistent guidance to its employees. While this awardee compiled the policies into a manual which was distributed to its accounting staff, please note that accounting policies do not need to be consolidated in a manual as long as accounting staff have access to them. Many awardees maintain online policies and procedures.

The awardee developed policies and procedures for expenditure approval as a result of the desk review. The university referred to the standards outlined in 2 CFR 215.44, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations: Procurement Procedures,” when writing its policies. Not only did these policies and procedures document existing practices, they also provided new consistent guidance to employees regarding: 

• The dollar thresholds for purchases with guidance about who is required to approve the expenditure at each level.
• The amount and type of bids required to be solicited for the different levels of purchases.

The awardee developed policies and procedures to provide guidance to assist employees responsible for administering federally-funded awards in determining the reasonableness, allocability, and allowability of costs charged to federally-funded awards. Although these policies were based on 2 CFR 220, “Cost Principles for Educational Institutions,” and, in many sections, were copied verbatim, the awardee tailored some portions of the policy to be more specific to its needs. The awardee also included a list of common unallowable costs. The policies and procedures were approved by management and distributed to all grants accounting employees. Note: Awardees should use the cost principles that apply to their organization.

The awardee developed policies and procedures to provide guidance to employees responsible for budget and expenditure monitoring. For the most part, these policies and procedures documented existing practices. The policies were approved by management and distributed to employees to promote consistency. The policies included: 

• The title of the individual who reviews grant expenditures for compliance with Office of Management and Budget cost principles. 
• The title of the individual who monitors project budgets to ensure that costs do not exceed project budgets and how frequently he/she is required to complete reviews (typically monthly). 
• The procedures for correcting cost overruns or any errors identified during reviews of project expenditures/budgets.

The awardee developed policies and procedures to provide guidance to employees responsible for preparing, reviewing, processing, and approving budget revisions. For the most part, these policies and procedures documented existing practices. The policies were approved by management and distributed to employees to promote consistency. These policies described: 

• The title of the individual who initiates budget revisions and any documents required to begin processing budget revisions. 
• The title of the individual who approves budget revisions. 
• The title of the individual who gets sponsor approval for the revision, if required. 
• The title of the individual who processes approved budget revisions within the accounting system. 
• The reasons a budget revision might be denied. 
• The process for initiating, reviewing, and processing budget revisions.