Managing project costs is a core element of research administration. While the research is underway, the project is being administered and monitored. Expenditure reports are reviewed and reconciled. Effort committed and salaries paid are certified and reconciled. Activities such as procurement of materials and supplies and sub-award setup and monitoring need to be performed during the course of the project.
When authorizing expenditures to be made to a sponsored project award, the PI is certifying those expenses are appropriate, necessary, and directly related to the approved scope of work relevant to that project. It is critical that the PI understand this responsibility. Charges made to a sponsored project account that are not directly related to the scope are not allowable and will be rejected or removed. Not carefully monitoring expenditures can result in increased audit risk to the entire university and disallowed expenditures that have to be reimbursed to the sponsor and covered by the university.
Expenditure reports should be reviewed every month to ensure that unallowable/incorrect expenses are removed on a timely basis. Compare supporting documents on hand - payroll records, requisitions, invoices, work orders, travel reimbursements, and journal entries - to the expenditure reports for agreement. Review the expenditure report for obvious errors and problems such as:
- Incorrect or unallowable expenditures
- Purchase orders or work orders completed but still listed as open
- Budget category or bottom-line is overspent
- Salary charges are consistent with personnel working on the project