CRA Financial Management of Sponsored Programs 3 — Questions and Answers
Question 1: A researcher charges $500 in lab supplies to a federal grant two days before the project end date, but the supplies are not received until three weeks after the end date. This charge is most likely:
- Allowable because it was obligated before the end date
- Unallowable because goods must be received within the project period (Correct answer)
- Allowable if approved by the department chair
- Unallowable only if it exceeds the budget line item
Correct answer: Unallowable because goods must be received within the project period
Costs must generally be incurred within the project period; supplies received after the end date do not meet this requirement even if ordered earlier.
Question 2: Which financial statement is used to report cumulative expenditures on a federal grant to the sponsoring agency?
- SF-270
- SF-425 (Correct answer)
- SF-424
- SF-LLL
Correct answer: SF-425
The SF-425 (Federal Financial Report) is the standard form used to report financial status, including cumulative expenditures, on federal awards.
Question 3: What is the primary purpose of a budget justification in a grant proposal?
- To certify that all costs are allowable
- To explain and support each cost element in the proposed budget (Correct answer)
- To request prior approval for anticipated rebudgeting
- To document the institution's indirect cost rate
Correct answer: To explain and support each cost element in the proposed budget
A budget justification narratively explains each cost element, demonstrating that proposed costs are necessary, reasonable, and allocable to the project.
Question 4: Under 2 CFR Part 200, the concept of 'allocability' means a cost:
- Is permitted under the terms of the award
- Benefits the award proportionately and can be assigned with reasonable accuracy (Correct answer)
- Is consistent with institutional policies
- Does not exceed market rates
Correct answer: Benefits the award proportionately and can be assigned with reasonable accuracy
Allocability requires that a cost be assignable to a federal award in accordance with the relative benefits received, based on reasonable and consistent methods.
Question 5: A university's NIH grant has a 12-month no-cost extension approved. The original end date was June 30. The new end date is:
- June 30 of the same year
- December 31 of the same year
- June 30 of the following year (Correct answer)
- September 30 of the following year
Correct answer: June 30 of the following year
A 12-month no-cost extension shifts the end date by exactly 12 months, from June 30 of the original year to June 30 of the following year.
Question 6: Which of the following is considered a direct cost on a sponsored research project?
- General accounting department salaries
- Heat and electricity for the research building
- A graduate research assistant's stipend on the project (Correct answer)
- The provost's salary
Correct answer: A graduate research assistant's stipend on the project
A graduate research assistant whose effort is specifically dedicated to the sponsored project is a direct cost, identifiable with the particular project.
Question 7: The term 'program income' in sponsored research refers to:
- Overhead recovered from federal awards
- Gross income earned by the recipient directly generated by a supported activity (Correct answer)
- Funds carried over from a prior budget period
- Matching funds provided by a non-federal third party
Correct answer: Gross income earned by the recipient directly generated by a supported activity
Program income is gross income earned by a recipient that is directly generated by a supported activity or earned as a result of the federal award during the period of performance.
CRA Financial Management of Sponsored Programs 3
A researcher charges $500 in lab supplies to a federal grant two days before the project end date, but the supplies are not received until three weeks after the end date.
This charge is most likely: