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Federally Sponsored Construction Projects

About this Policy

Federally Sponsored Construction Projects

Policy Number: 27020


Effective Date:
Dec 12, 2017

Last Updated:
Jan 01, 1970

Responsible Office:
UM System Controller’s Office

Responsible Administrator:
UM System Controller

Policy Contact:

Campus Sponsored Programs Office
Project Design & Construction

Categories:

  • Finance

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Scope

This policy is to be followed for all sponsor funded construction remodeling and renovation projects.

Reason for Policy

To provide guidance to maintain accounting records for all University capital outlays on construction activities funded by external sponsors and to coordinate that funding with Campus Facilities and the SPO. These guidelines are consistent with generally accepted accounting principles.

Policy Statement

Processing a Construction Award
All award notices must be forwarded to the Sponsored Programs Office (SPO) for review, negotiation, execution and setup. The SPO forwards the award notice to the Principal Investigator (PI), General Counsel and other appropriate offices for review and comment.

  • The SPO sets up the award budget, milestones and sends a Grant Award Summary to the PI, the department fiscal manager, the department grants specialist, and Campus Facilities.
  • The SPO reviews the Award Document and confirms accuracy and completeness of the award setup.
  • Campus Facilities provides the SPO with the ChartField string (facilities construction project) used to record the actual construction expenditures of the award.
  • The Project Design & Construction (PD&C) manager provides the SPO with the transmittal documents for all required project materials as they are submitted to the funding agency.

After the award is executed, the construction project manager, PI, and SPO meet to discuss terms, conditions, and requirements of the project and ensure individual responsibilities are understood. This process provides assurance of compliance with the terms and conditions of the award, and the accuracy and completeness of information.

The SPO monitors progress on the project and transfers of funds as follows:

  • Transfer funds—monthly, at least three business days before the end of each month, either Campus Facilities or SPO will transfer the expenses from the facilities construction project to the award.
  • Monthly, the SPO will determine the un-transferred balances in the facilities construction project and in the award for the various construction projects. The SPO will ensure the transfers of expenditures have occurred as noted above and all transfers were made within the period of availability. The SPO will invoice the sponsor or draw from the sponsor as appropriate according to the terms of the agreement.
  • Quarterly, SPO post-award management will review and ensure transfers are occurring as outlined above with documentation of the review maintained by the SPO.

Transfers will be made as noted above unless otherwise specified in the Award Document or by the sponsor.

The PI is responsible for submitting requests for time extensions to the SPO that will then forward them to the sponsor. The PI or the Campus Facilities project manager is responsible for submitting non-financial reports to the sponsor. The SPO is responsible for preparing and sending financial reports and invoices to the sponsor.

Major projects have a budget greater than or equal to $100,000. Minor projects have a budget less than $100,000.

Davis-Bacon Act Compliance
This Act requires specific wage and hour compliance of the University when it receives certain federal awards. The University has an obligation to document compliance with these requirements and is obligated to report all suspected or reported violations to the federal awarding agency. To assure compliance with this Act,

  • Campus Facilities will perform a review of all bid proposals and contracts issued under each construction award to ensure the appropriate requirements of the Act were included.
  • The System Prevailing Wage Coordinator will review the files, bid proposals and contracts or compliance documentation maintained by Campus Facilities and the contractor each quarter to ensure compliance with the Act.
  • The System Prevailing Wage Coordinator will prepare an annual report listing all subject projects, the respective contracts issued, and the compliance status.

Records Retention
The records for construction awards are retained by the University as specified in the Award Document. In most instances, the required document retention time for construction projects will exceed the standard retention time for sponsored project documents. In some cases, the required retention time may extend throughout the depreciable lifetime of the product of the construction. It is critical that such exceptional document retention lifetimes be clearly noted when documents are filed for long-term storage.

Federally-owned property
Title to Federally-owned property remains vested in the federal government.

Definitions

Award Document – Fully executed agreement specifying the terms and conditions of an externally funded sponsored agreement.

Davis-Bacon Act - Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.

Project Design & Construction (PD&C) - architects and engineers that guide campus clients through complex and difficult project-design/construction processes and oversee the design/construction work of contracted architects and engineers on campus projects.

Sponsored Programs Office (SPO) - campus administrative office established to manage administrative duties and monitor compliance for externally sponsored program activity. The administrative name used on each campus is different, while the functions remain the same; SPO is a term used to refer to all four campus offices.

Accountabilities

UM System Prevailing Wage Coordinator:

  • Conduct quarterly review of files maintained by Campus Facilities to ensure the required reviews of the contractors’ payroll records have been completed.
  • Prepare an annual report listing all subject construction projects, the contracts issued under each, and the Act’s compliance status.

Campus Facilities Project Manager:

  • Submit required reports to the SPO.
  • Ensure compliance with terms, conditions (including flow-through requirements to construction contractors), and requirements of the award and individual responsibilities have been communicated and assigned.
  • Perform a quarterly review of the bid proposals and contracts issued under each construction award to ensure the appropriate requirements of the Act have been included.

Campus Sponsored Programs Office (SPO):

  • Set up the award, including any cost share funds budgets.
  • Issue and send a Grant Award Summary to the PI, the department fiscal manager, the department grants specialist, and Campus Facilities.
  • Review all modifications or amendments and ensure the changes are set up accurately.
  • Ensure compliance with terms, conditions, and requirements of the award and individual responsibilities have been communicated and assigned.
  • Monitor progress on the project and make timely transfer of expenditures (or coordinate with Campus Facilities).
  • Prepare and send required financial reports and invoices to the sponsor.
  • Review the Award Document to ensure all terms and conditions, required reports and due dates are established in the financial system.
  • Receive and process requests for time extensions and communicate appropriately to the sponsor.
  • Perform a quarterly review to ensure transfers are occurring as outlined in this policy.

Principal Investigator (PI):

  • Ensure compliance with terms, conditions, and requirements of the award and individual responsibilities have been communicated and assigned.
  • Submit any required non-financial reports to the sponsor and coordinate submittal with SPO.
  • Monitor project status and submit requests for time extensions.

Additional Details

Forms

 

Related Information

 

History

Formerly Accounting Policy Manual 60.25 – Federally Sponsored Construction Projects (revised 7/16/2008)

Procedure

Reviewed 2017-12-06