CRA Financial Management & Budgeting 3 — Questions and Answers
Question 1: What does the term 'carryover' mean in the context of federal grant management?
- Transferring personnel from one project to another
- Spending unobligated balances from one budget period in a subsequent budget period (Correct answer)
- Rolling over unexpired subcontracts
- Carrying indirect costs forward to a new rate negotiation
Correct answer: Spending unobligated balances from one budget period in a subsequent budget period
Carryover refers to the authorized use of unobligated funds remaining at the end of one budget period in a subsequent budget period.
Question 2: Under 2 CFR 200, which of the following is a characteristic of an allowable cost?
- It must be incurred solely for the benefit of the federal award
- It must be allocable, reasonable, consistent with institutional policies, and conform to award terms (Correct answer)
- It must be approved in writing by the program officer before being incurred
- It must appear as a line item in the original approved budget
Correct answer: It must be allocable, reasonable, consistent with institutional policies, and conform to award terms
Uniform Guidance establishes that allowable costs must be necessary, reasonable, allocable, consistent with institutional policies, and conform to applicable award terms.
Question 3: A subrecipient under a federal pass-through award is BEST described as:
- A vendor providing goods or services under a procurement contract
- An entity that receives a subaward to carry out part of a federal program's substantive scope of work (Correct answer)
- A consultant hired by the PI for technical advice
- An institution providing equipment to the prime recipient
Correct answer: An entity that receives a subaward to carry out part of a federal program's substantive scope of work
A subrecipient is an entity receiving a subaward to perform substantive programmatic work under the federal award, as distinguished from a contractor/vendor.
Question 4: What is the primary purpose of effort reporting in federally sponsored research?
- To document hours worked for payroll purposes
- To certify that the proportion of effort charged to a grant matches the actual effort expended (Correct answer)
- To track overtime hours for sponsored project staff
- To report the number of publications produced per effort unit
Correct answer: To certify that the proportion of effort charged to a grant matches the actual effort expended
Effort reporting certifies that salaries charged to federal awards correspond to the actual proportional effort devoted to those projects.
Question 5: When must an institution obtain prior approval before incurring pre-award costs on a federal grant?
- Never; pre-award costs are always the institution's financial risk
- Only when the costs exceed $25,000
- When required by the terms of the award or the federal agency's regulations (Correct answer)
- Always; all pre-award costs require written sponsor approval
Correct answer: When required by the terms of the award or the federal agency's regulations
Pre-award costs may be incurred up to 90 days before the award when the non-federal entity accepts full financial responsibility, but some agencies require prior approval per their specific terms.
Question 6: In a modular NIH grant budget, what is the maximum allowable amount per module?
- $10,000
- $25,000 (Correct answer)
- $50,000
- $100,000
Correct answer: $25,000
NIH modular budgets are structured in modules of $25,000 each, up to a maximum of $250,000 direct costs per year for qualifying mechanisms.
Question 7: Which of the following best describes 'float' in the context of research administration financial management?
- Unexpended balances at the end of a project period
- The time difference between when costs are incurred and when they are posted to the ledger (Correct answer)
- Funds transferred between different sponsored projects
- The difference between direct and indirect costs
Correct answer: The time difference between when costs are incurred and when they are posted to the ledger
Float refers to the lag time between when expenditures are incurred and when they are actually posted to the financial accounting system.
CRA Financial Management & Budgeting 3
What does the term 'carryover' mean in the context of federal grant management?