Expense Processing FAQs

When issuing payments to those individuals and entities who are neither U.S. citizens nor U.S. residents for services rendered. If the individual is a U.S. citizen or U.S. resident, then a Professional Services Contract (PSC) should be set-up through Purchasing.

Yes! All anticipated expenses should be included, so that there is a clear understanding of the total amount expected to be paid out of the project account for the consultant.

It depends. Lump sum payments are discouraged on federal and state funded RC accounts, as it is more difficult to demonstrate that the rate is reasonable (see Professional Services section located in the MSU Federal/State Cost Policy: cga.msu.edu/PL/Portal/134/FederalStateCostPolicy#profServices.) If the consultant is to be paid a lump sum, the NRAPSC should include justification of how the amount was calculated and determined to be reasonable as a best practice, regardless of funding source. Supporting documentation may include a quote, the consultant’s typical rate, the industry standards, Employee Biographical Data (EBD), etc.

• Cost Reimbursable: Typically, consultants should be paid on a cost reimbursable basis, which allows more flexibility to change the amount as the work is performed if unexpected variables arise.
• Fixed Price: A fixed price structure is more appropriate for work where there is a high degree of assurance that the deliverable(s) will be met. The final payment should always be upon completion of the final deliverable. A budget should be provided to show how the consultant developed the NRAPSC total cost, and there should be an understanding that if costs increase or currency fluctuations occur, the NRAPSC amount will remain the same.

• Please note, to be compliant with the Uniform Guidance, CFR 200.317-200.326, all federally funded purchases that equal $10,000 or more in value must be competitively bid or include justification for the exception to competition. This applies to all PSCs and NRAPSCs charged to RC accounts.
• Any NRAPSCs that are expected to be above $10,000 will require Purchasing’s approval and will need to be routed in KFS as a Requisition.
• Below are the updated best practices for NRAPSCs on RC accounts:
  1. Up to $10,000 on federal/state sponsored program awards – send via email to CGA (audit.compliance@cga.msu.edu) to review and sign if allowable.
     1. Please note, if the total anticipated amount (services plus expenses) of the NRAPSC is budgeted for, or expected to be over $10k for the project period, note 2 would apply
  2. $10,001 and over on federal/state sponsored program awards - to be compliant with 2 CFR 200, a Requisition should be processed.
  3. Up to $25,000 on Foundation/Other sponsored program awards – send via email to CGA (audit.compliance@cga.msu.edu) for review and signature if allowable.
  4. $25,001 and over on Foundation/Other sponsored program awards – route as a Requisition in KFS

As part of CGA’s NRAPSC review, including modifications to NRAPSCs, the individual is verified through visual compliance to have no debarment or exclusion restrictions. If there is a match/alert, the NRAPSC will be sent by CGA to Export Control for their review and approval, prior to CGA signature.

Modifications are necessary when the contract has a change in service dates, payment amount, scope of work, or allocation of MSU accounts.

• Invoices should include dates of services, total amount due and how that amount was calculated. Typically, the invoice includes signature by the consultant.
• Receipts should be included for all expense reimbursements in accordance with MSU policy (travel, supplies, etc.).

• The payment for services rendered and expense reimbursement (such as travel, supplies, etc.) should be on two separate accounting lines on the DV. If the award is federally funded, the object code for services is typically 6489, Contractual Services.
• The object code of honoraria (6415) is discouraged for a NRAPSC payment (as well as for a PSC payment), as its definition implies that the service is typically rendered without charge and therefore may be unallowable on federally funded awards.

It is the department’s responsibility to track current and cumulative payments with each payment request in KFS. To facilitate this reconciliation, the bottom portion of the NRAPSC should be completed and attached to each payment request. The department is responsible for making sure the maximum is not exceeded.

• Invoices are sent from the subrecipient to the Department Administrator. The Department Administrator should review the invoice, process a Disbursement Voucher using payment reason code Q Subcontract Payments, in KFS including the invoice, receipts (if required), and the MSU PI certification in the attachments.
• To be compliant with the Uniform Guidance, CFR 200.305 subpart b, “…the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.”

The correct object code must be used, so that F&A is charged correctly to the account.

• Object code 6593 is used for the first $25,000 paid on each subaward.
• Object code 6594 is used after the $25,000 threshold has been reached on each subaward.

The invoice must meet the requirements that are specified in the subaward. Typically this includes the subaward number, time period covered by the billed expenses, a current and cumulative breakdown by budget category, and a certification by an authorized official of the subrecipient. Receipts may also be required as part of the reimbursement process.

• Confirm that the invoice requirements as specified in the subaward have been met. Subawards are sent to the PI and/or the Department Administrator when they are fully executed for reference.
• Confirm that the time period of the expenses falls within the time period of the subaward. If a previous has not been paid, verify with the subrecipient before processing the current invoice.
• Confirm that the amount being requested does not create a cumulative amount that exceeds the subaward amount.
• Confirm that the budget categories/expenses on the invoice are allowable and support the subaward scope of work.
• Confirm that any receipts provided are appropriate, legible, allowable, reconcile to invoice, etc. When receipts are received in a language other than English, the receipts should be easily identifiable. It is recommended that a numbered list of receipts is provided (in English) with the corresponding number on each receipt. Questions regarding the receipts should be resolved with the subrecipient prior to the voucher submission in KFS to avoid delay in processing.
• Additional review may be necessary depending on the project and subaward.

The PI certification reads as follows:

"The services for which reimbursement is requested have been satisfactorily rendered and the costs thereof are proper and due in accordance with the terms of the agreement. If this payment is for an advance, it is in accordance with the terms of the agreement and necessary to further project objectives."

The PI should only certify the above statement when they have verified that the work was satisfactorily completed in support of the scope of work and the costs are appropriate. In an audit, sponsors will look to verify that work was performed satisfactorily, not just that expenses are appropriate. Approving an invoice for payment only covers the appropriateness of expenses noted on the invoice. Therefore, the certification statement which covers the programmatic work must be provided by the PI.

• Certification statement listed and signed by the PI on the invoice.
• Signed certification on a separate document and attached to the DV.
• The DV can be routed to the PI who adds the PI certification statement themselves as a note on the voucher and then approves the DV.
• The PI may certify via email. The administrator can provide invoice to the PI along with the certification statement, and the PI reply approving and certifying the statement. The full email string would then be attached to the DV.
  • Please note, an approval reply from the PI must make reference to the approval of the invoice AND certification that the work was satisfactorily completed in support of the scope of work
  • Although stating their approval shows that they support a payment to the subrecipient, it does not specifically address the verification that the programmatic work was performed as expected, which is an important component. The PI reply must include the certification statement or specifically reference that they concur with both the invoice and the PI certification language if both of these items are included in the email from the administrator.
• Other types of documentation are also acceptable, providing the approval and certification statement are present.

Subaward payments are tracked by the department administrator, but also by CGA in the Subaward tab in Account Explorer on the CGA website. It is recommended that Department Administrators use the Subaward tab as a reference when reviewing invoices to reconcile internal records and prevent any delays in processing.

Payment cannot be approved if the invoice does not comply with the terms of the subaward. If the MSU PI would like to obligate more funding or extend the end date of the subaward, a modification can by requested from the Office of Sponsored Programs (OSP) or CGA’s Awards Group (cga.msu.edu/PL/Portal/398/Subawards). The Department Administrator should not process the payment in KFS until the modification is fully executed.

• Occasionally it may be necessary to provide a subrecipient with an advance. Requests for an advance should be submitted to OSP or CGA’s Awards Group (cga.msu.edu/PL/Portal/398/Subawards) specifying the business purpose, how the advance amount was determined, and the planned reconciliation for the advance.
• If an advance is allowable and is determined to be appropriate, it should be included in the subaward, detailing the amount to be advanced and the reconciliation terms.

The risk assessment and audit expiration date can be found in the Subaward tab in Account Explorer under the applicable subaward. Expired risk assessments will delay payment processing so please work with CGA to update the assessment prior to initiating payment, when applicable.

• When charging a meal expense to RC accounts, the justification should relate to why the meal was necessary as part of the scope of work, i.e. why was it necessary to conduct the meeting over a meal?
• An agenda, participant list, and itemized receipt should also be included with the food or drink expense.

• Typically, MSU faculty and staff cannot be included in meal expenses on federal or state funded projects unless they are in travel status or are part of an extended meeting/conference where their attendance during meal time was expected as a facilitator or participant of the conference.
• Meals for an MSU employee participating in recruiting, when the employee is the decision maker, usually can be included in the cost of meals.

For RC accounts, only one MSU employee can be considered the decision maker.

No. Only in rare instances has specific agency approval allowed for reimbursement of alcohol with meals.

Salary transfers that are 60 or more calendar days retroactive are considered late cost transfers. A late transfer charging a RC account in SAP will route to CGA for approval.

Salary transfers moving salary to a federal or state funded RC account and are more than 90 calendar days retroactive require a Cost Transfer Form.

• If the RC account was recently created, a Cost Transfer From is required if the salary being transferred is more than 90 days retroactive.

The cost transfer form must include the account number, time frame, explanation of error, duties on account, and be signed by the PI. Chair signature is required for salary transfers greater than $10,000.

Days are calculated based on when CGA receives the SAP cost redistribution. Please take into consideration the time it will take the cost redistribution to route through all approvals prior to reaching CGA.

• How the trip supports the scope of work should be specified as part of the business purpose.
• When multiple accounts are charged, explain how the expense allocation was determined.

• Air travel can be booked by any means available, however regardless of price, air travel MUST comply with the Fly America Act (explained below) for federal accounts. The University recommended travel agency will confirm that the airfare is compliant with the Fly America Act when the flight is directly billed to a RC account.
• When a change to an airline itinerary results in a change fee, the project related business purpose must be provided. If the change was due to circumstances not related to the project, then the change fee is not typically allowable on the grant. However, extenuating circumstances will be reviewed on a case by case basis for allowability.

• The Fly America Act is a federal law that requires use of U.S. air carrier for all air travel and cargo transportation services funded by the U.S. Government.
• CGA’s website includes MSU’s implementation of the Fly America Act (cga.msu.edu/PL/Portal/346/FlyAmericaAct) as well as a useful tool to check airfare compliance.

• Items such as laundry, tips, etc. are not reimbursable as they are considered part of M&IE. Personal items such as movies, mini bar, etc. as well as meals charged to the room are also not reimbursable.
• Cost of lodging cannot exceed the maximum daily lodging rate for the international travel destination. Extenuating circumstances will be reviewed on a case by case basis when lodging exceeds the maximum rate. To identify the maximum lodging rate for the travel destination use the following website: aoprals.state.gov/web920/per_diem.asp

Expenses such as travel advance fees, international transaction fees, and short-term travel visas may be allowable when proper documentation is provided.

Yes, the agenda assists with establishing the business purpose and the time frame of the business travel. In addition, the agenda often indicates if meals were provided as part of the conference.

If CGA approval is required, we will already be in the approval route.

• If the cost of a computer is incurred because it is necessary to carry out the objectives of the award, the cost may be allowable. The department should specify how the computer being charged to the project account is necessary to support the project.
• If the computing device is not used exclusively for one RC account project or will be used for multiple purposes/projects, the allocation of cost should align with usage.
• The computing device, as with all other supplies/materials purchased with sponsored funds, must adhere to the Needed, Received, and Used policy: cga.msu.edu/PL/Portal/213/NeededReceivedandUsed

Explanations should include how the error occurred and how the expense benefits the project to which you are transferring.

Cost transfers moving expenses to a federal or state funded RC account and are more than 90 calendar days retroactive. More information can be found in CGA’s Cost Transfer process: cga.msu.edu/PL/Portal/139/CostTransfersApprovalDocumentation

• A DI is used for cost reallocations that are part of a typical business process, including transfers between a RC parent and child account and object code changes within the same account.
• A GEC is used for cost transfers (cga.msu.edu/PL/Portal/139/CostTransfersApprovalDocumentation), such as transfers between two RC accounts (except parent/child accounts) and transfers processed to correct mistakes.

When paying someone to participate in a study, object code 6596 (Research Participant) should be used most often. Object code 6590 (Non-Employee Stipend) may be an option if the account F&A base is Modified Total Direct Cost and participant payments are budgeted as exempt from F&A.

• Participant payments can be made in cash or by distribution of gift cards.
• Gift cards may be purchased in advance under specific circumstances. Please contact audit.compliance@cga.msu.edu if you want to utilize this option, as it will be considered on a case by case basis.
  • Any gift cards not used by the end of the project are not allowable on the project and must be removed.

• When gift cards are used, include the receipt as an attachment to the financial transaction.
• Attach a list of who received the gift card/cash payment, the day they participated and the participant signature to confirm that they received their payment.
  • The only exception to this documentation requirement is if the names of the participants are confidential. In that case, please indicate that the information is confidential and will be kept on file in the department.
• Any personal information about the participants (social security number, medical information etc.) should be omitted from the documentation attached to the transaction.

Any projects involving human subjects must have an up-to-date IRB approval on file for participant expenses to be approved by CGA.