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1 NAVIGATION GUIDANCE Click the small forward arrow button to continue Outgoing Subaward and Subcontract Initiation and Management The following slide provides guidance on how to navigate through this module. 1

2 When ready to proceed, click the small forward arrow button. Enjoy the presentation. 2

3 Invoices from Subrecipients and Subcontractors Outgoing Subaward and Subcontract Initiation and Management UCLA is responsible for ensuring that sponsor funds provided by the University to other organizations via subawards/subcontracts are spent in accordance with applicable laws and regulations. One way to achieve this is by carefully reviewing subrecipient/subcontractor invoices. For the duration of this module, if only the term subaward will be used, it does include all subgrants and subcontracts; and if only the term subrecipieint is used, it does include all subgrantees and subcontractors. 3

4 Why is it so important to scrutinize subrecipient and subcontractor invoices? Key to effective monitoring of the subrecipient s performance. Subrecipient invoices are key to effective monitoring of the subrecipient performance. This is contingent on two factors. Complete invoices from the subrecipient and appropriate review of the invoices by the PI/Department. 4

5 The Objective Learn how to adequately review an invoice submitted by a subrecipient Recognize problematic invoices What steps to take to decrease the likelihood of programmatic or financial challenges The objective of this module is to learn how to adequately review an invoice submitted by a subrecipient or subcontractor; recognize problematic invoices; and what steps to take steps to take to decrease the likelihood of programmatic or financial challenges. 5

6 Common Errors that Can Be Avoided are: Subrecipients/subcontractors getting paid for work not performed Invoice conflict with subaward/subcontract agreement Invoice insufficient in detail Expenditures double-billed (resulting in double payments) Receiving in BruinBuy is for more than invoice amount Accounts Payable (AP) not receiving an original invoice signed (certified) by the PI AP receiving an original invoice directly from subrecipient/subcontractor Invoice not certified by subrecipient/subcontractor s authorized representative The common errors that can be avoided are: -Subrecipients/subcontractors getting paid for work not performed -Invoice conflict with subaward/subcontract agreement -Invoice insufficient in detail -Expenditures double-billed (resulting in double payments) -Receiving in BruinBuy is for more than invoice -Accounts Payable (AP) not receiving an original invoice signed (certified) by the PI -AP receiving an original invoice directly from subrecipient/subcontractor -Invoice not certified by subrecipient/subcontractor s authorized representative 6

7 Level of detail required in the subaward/subcontract invoice At a minimum: Salaries Travel Equipment Lower-tiered subaward/subcontracts Material and Supplies Cost-Sharing/Program Income (when applicable) F&A (rate and amount) Totals Cumulative expenditures by line item This slide shows the minimum level of detail required in a subaward/subcontract invoice. At a minimum: Salaries Travel Equipment Lower-tiered subaward/subcontracts Material and Supplies Cost-Sharing/Program Income (when applicable) F&A (rate and amount) Totals Cumulative expenditures by line item 7

8 This is a snapshot of the sample invoice included in subaward agreements to subrecipients. Subrecipients may use their own format, but it is hoped the same level of detail incorporated. 8

9 Invoice Review Checklist Subaward/subcontract BruinBuy order posted by Purchasing Original Invoice Addressed to right person/place? Dated Numbered On letterhead Detailed Subaward/subcontract BruinBuy PO number written on invoice Signed by subrecipient s/subcontractor s official Signed by UCLA PI F&A rate correct and calculated correctly? Period of invoice falls within budget period Expenditures in accordance with approved budget and sponsor guidelines Invoice states where the work was performed Work performed in US by a foreign alien accounts/payable/payroll would require additional documentation/glacier information. Foreign Source Income Statement in hand (when applicable) Receiving complete in BruinBuy for amount of the invoice Here is an Invoice Review Checklist. A copy is available in the resources tab. 9

10 Do not approve invoices if technical or financial reports from the subrecipient are delinquent that are insufficiently detailed if you are not confident the costs are allowable, allocable, and reasonable Do not approve invoices for payment if technical or financial reports from the subrecipient/subcontractor are delinquent Do not approve invoices that are insufficiently detailed Do not approve invoices if you are not confident the costs are allowable, allocable, and reasonable 10

11 Once an invoice has been reviewed by PI and found acceptable PI indicates review and approval by signing the original invoice Department performs Receiving for the invoice amount in BruinBuy Department notes purchase order number on invoice, makes a copy, and submits original invoice(s) to Accounts Payable Department indicates on the supporting documentation from which line(s) of PO the payment is to be made, being sure to match period of performance These are the steps to take once an invoice has been reviewed and found acceptable. 11

12 Department Performs Receiving in BruinBuy Receivables in BruinBuy should be released in accordance with the invoiced amount Amount received should be equal to or less than the invoiced amount It is very important that receiving is done in BruinBuy before invoices are sent to Accounts Payable because otherwise Accounts Payable will process the payment but no check will be generated. When that happens, these unpaid invoices will show up in the H&I report. Also, when performing receiving in BruinBuy, make sure that the amount you are receiving is equal to or less than the invoice amount. If receiving is done for more than the invoiced amount, and Accounts Payable pays it, it can be very difficult to obtain a refund from the subrecipient or subcontractor. If you are not sure how to perform receiving in BruinBuy, there is a module dedicated to that subject within the Outgoing Subaward Initiation and Management series. 12

13 Suspect!!! Homegrown Invoice! The PI or his/her staff should not prepare invoices for subrecipient or subcontractor. Invoices must be prepared on the subrecipient/subcontractor's standard invoice template or letterhead in accordance with their documentalble project expenditures, sufficiently detailed to ascertain that costs are reasonable, allocable and allowable, and certified by their authorized institutional representative. Payment can be delayed if accounts payable suspects the invoice was not created by the subrecipient or subcontractor, or that the invoice lacks the requisite signatures. 13

14 Accounts Payable reviews invoices to verify: Dates of service fall within obligation period Invoice appears to have been prepared by the subrecipient/subcontractor and contains a certification statement signed by subrecipient/subcontractor s authorized representative Foreign Source Income Statement is provided, when appropriate Invoice contains UCLA PI s signature Expenditures are assigned to correct object codes (7310 and/or 7300) Department has performed receiving in BruinBuy. These are the steps Accounts Payable takes upon receipt of an invoice. The next slide discusses invoices from foreign institutions in general, and the Foreign Source Income Statement in more detail. 14

15 Payment to Foreign Institutions Make sure invoiced amounts are in English and in US dollars If payment made in a foreign currency, the currency conversion may result in UCLA paying more If you receive an invoice that is not in English, ask for the invoice to be translated Invoices should be submitted in accordance with best practices, which would be quarterly or monthly Progress on the research can be monitored Make sure invoiced amounts are in English and in US dollars. If we make payment in a foreign currency, the currency conversion may result in UCLA paying more, which, of course, affects our budget. It is always best if we receive the invoices in US dollars so we can match it with the budget. If you receive an invoice that is not in English, ask for the invoice to be translated; and as always invoices should be submitted in accordance with best practices, which would be quarterly or monthly. That way, the progress on the research can be monitored. 15

16 Foreign Source Income Statement Applies only to salary and wages on subawards to foreign countries documents that UCLA is not withholding any monies due to the subrecipient/subcontractor Provided to the subrecipient for completion at the time the subaward agreement package is sent Subrecipient has the option of submitting the Statement with each invoice, or for an entire budget period The Statement is reviewed and approved first by Accounts Payable If complete and accurate, forwarded to Payroll The turn around time for review and approval, provided the Statement is complete and accurate, is usually a couple of days A complete, accurate and fully approved Statement must be on file with Accounts Payable before a payment can be made The Foreign Source Income Statement applies only to salary and wages on subawards or subcontracts issued to foreign countries. It is the means by which we, UCLA, document that we are not withholding any monies due to the subrecipient/subcontractor. The Foreign Source Income Statement is provided to the subrecipient/ subcontractor for completion at the time the subaward/subcontract agreement package is sent. The subrecipient/subcontractor has the option of submitting the Statement with each invoice, or for an entire budget period, meaning the Statement would cover several invoices. The Statement is reviewed and approved first by Accounts Payable, and if found complete and accurate, forwarded to Payroll for their review and approval. The turn around time for review and approval, provided the Statement is complete and accurate, is usually a couple of days. A complete, accurate and fully approved Statement must be on file with Accounts Payable before a payment can be made. 16

17 Accounts Payable Communicates Regarding Invoices via the BruinBuy Queue Be sure to respond to BruinBuy queue messages, as necessary Account Payable s primary means of communication to departments regarding invoices is through the BruinBuy queue, as they are required to do so for anything that they place on the H&I report. Since they post in the queue daily, it is important that the department regularly check for and respond to BruinBuy queue messages. Accounts Payable may send an or make a phone call, but that is only after there have already been exchanges via the BruinBuy queue. 17

18 The Final Invoice Delay in receipt of the final invoice can lead to delays in preparation and submission of other close-out reports Submitted by date specified in subaward/subcontract agreement Marked FINAL INVOICE (NOTE: Invoices CANNOT overlap budget years) Delay in receipt of the final invoice can lead to delays in UCLA s preparation and submission of other close-out reports. The final invoice should be submitted by the date specified in the subaward/subcontract. agreement. A subrecipient should never wait until the end of the project to submit to UCLA one final invoice. Invoices should be submitted in accordance with best practices that is quarterly or monthly.the Final invoice MUST be marked final to avoid the problem of receiving another invoice from a subrecipient after a fund has been closed and any unexpended balance returned to the sponsor. 18

19 Invoice Examples (invoice packet in Resources tab for ease in review) Lets take a look at what departments should watch for when reviewing subrecipient/subcontractor invoices by reviewing a few invoice samples. 19

20 Examples #1A and 1B Department/PI reviews subrecipient/subcontractor invoices to make sure: Dates of service specified on invoices fall within obligation period as specified in the subaward purchase order, and the agreement. In examples 1A and 1B coming up, the department reviews the invoices to make sure the dates of service specified on the invoices fall within the obligation period as specified in the subaward/subcontract purchase order and agreement. 20

21 Dr. Joe Bruin Dept. of Psychology Room 350, CHS Los Angeles, CA Example 1A: The billing period on invoice should coincide with, or fall within the budget period on the PO, aareement, and the Synopsis. Some invoices will show the billing period and the budget period. If an invoice only shows a billing period, check to make sure it coincides, or falls within, the budget period. 21

22 Example 1B: The amount of time for six months does not tell us if it falls within the budget period. Specific dates should be provided, such as December 1, 2007 to January 31, 2008 In this example, the amount of time indicated on the invoice, six months, does not tell us if it falls within the obligation period. Specific dates should be provided, such as December 1, 2007 to January 31,

23 Example #2 Department/PI reviews subrecipient/subcontractor invoices to make sure: Charges are in accordance with approved budget and are reasonable, allowable, and allocable In the next example, the department is reviewing the invoice to ascertain charges are in accordance with the approved budget and are reasonable, allowable and allocable. 23

24 Dr. Joe Bruin Dept. of Psychology Room 350, CHS Los Angeles, CA Note: If this invoice were from a foreign entity, pay close attention to the travel charges. Traveler may be subject to withholding and reporting. Are these categories and amounts congruent with subrecipient s budget? For example, was travel in their budget? If not, is prior approval required? What does Other cover? If this is a subaward under a federal prime, we want to make sure none of the Other costs are unallowable. In reviewing this invoice, look at the categories. Are these categories and amounts congruent with subrecipient's/subcontractor's budget? For example, was travel in their budget? If not, is prior approval required?; What does other cover? If this is a subaward under a federal prime, we want to make sure none of the other costs are unallowable. Always pay close attention to detail when an invoice is from a foreign entity. While this is not an example of a foreign invoice, if it were, we'd want to pay close attention to the travel charges. If the charges were for someone traveling from the foreign country into the US to make a deliverable or participate in a meeting, the person who did the travel may be subject to withholding and reporting if we pay for those travel expenses via the invoice. Instead, such travel charges would be paid through Travel Accounting and not the invoice. 24

25 Example #3 Department/PI reviews subrecipient/subcontractor invoices to make sure: Is the invoice consistent in format with what has been submitted previously Is the invoice numbered In example #3, the department is reviewing to ascertain if the invoice is consistent in format with what has been submitted previously, and if the invoice is numbered (which prevents double payments) 25

26 Dr. Joe Bruin Dept. of Psychology Room 350, CHS Los Angeles, CA Note that this is invoice # 18. Have you received the previous invoices 1-17? Do the previous invoices from this subrecipient look similar to this latest one they submitted? They should. If you look at the bottom of this invoice from the California Institute of Technology, there appears to be a space for an invoice number Caltech chose not to use invoice numbers but, instead, use voucher numbers. The voucher number is #18. Have you received the previous invoices, 1 through 17? Do the previous invoices from this subrecipient/subcontractor look similar to this latest one they submitted? They should. 26

27 Example #4 Department/PI reviews subrecipient/subcontractor invoices to make sure: Invoice contains certification statement signed by the subrecipient/subcontractor s authorized representative In example #4, the department checks the invoice to make sure it contains the certification statement signed by the subrecipient/subcontractor s authorized representative 27

28 Los Angeles, CA Certification Statement and Signature from subrecipient/subcontractor authorized representative It is important that invoices are reviewed to make sure they have signature approval of the subrecipient's/subcontractor's authorized representative. If Accounts Payable receives an invoice lacking the signature, it will be sent back to the department. As they cannot pay an invoice without that signature. 28

29 Example #5 UCLA PI approves original invoice by signing it. Department notes purchase order number on invoice, makes a copy, and submits original invoice to Accounts Payable. Example #5 addresses the Purchase Order number. If you have two or more subawards with the same entity, how is Accounts Payable going to know which agreement the invoice applies to? You want to make sure the correct PO number appears on the invoice. Accounts Payable recommends writing the Purchase Order number clearly on the front page of the invoice to make sure payment is applied correctly. 29

30 Dr. Joe Bruin Dept. of Psychology Room 350, CHS Los Angeles, CA UCLA: PO No.: Here is department s notation of PO number.. Approved Dr. Joe Bruin So when you receive your invoice from your subrecipient/subcontractor, it is ideal if an invoice has the Purchase Order number pre-printed on it. If it isn t write the Purchase Order number on it, making sure it corresponds to the correct subaward. 30

31 Invoice Review Exercise Can you identify the problems? (You may wish to print the review checklist in the resources tab) Roll mouse over boxes to reveal notes Here are two invoice review exercises. Roll your mouse over boxes to reveal notes. These exercise slides are not narrated. 31

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34 Additional Invoice Review Example This LOOKS good, but there is still room for improvement Here is one more exercise. 34

35 Kathy Moore Note the address. It is UCLA Accounts Payable. What address should this be? Yes, the PI's departmental address We do have an invoice date, number, agreement number and invoice due date. This is good detail. Notice we have fees. Until recently, fees were not acceptable on subcontract invoices for work funded by the federal government. If you receive an invoice with fees, make sure they are an acceptable charge for the particular project. When in doubt, consult with your OCGA Officer or Analyst. We have the current, prior and cumulative amounts. This is good We have a good level of detail, but, again, the fixed fee figures need to be checked into. 35

36 Invoice Invoice Date: November 7, 2008 Invoice Number: HE Agreement Number: C9444 Invoice Due Date: December 7, 2008 UCLA Accounts Payable Wilshire Blvd. Los Angeles, CA Project Title: Study of Common Cold Estimated Costs: 3,555, Project Leader: Professor Joe Bruin Estimated Fee: 284, Total Funding: 3,838, Billable Fee: 284, MAJOR COST ELEMENTS Current Amounts 26-Sep-08 to 23-OCT-08 Prior Amounts 01-AUG-08 to 25-SEP-08 Cumulative to Date 23-OCT-08 Employee Salaries 14, , , Employee Fringe Benefits 9, , , Adjunct Staff Salaries 7, , Computing Services Costs 3, , , Travel Expenses , , Other Direct Costs , , Subcontracts Total Direct Costs 34, ,718, , Overhead 37, ,272, ,309, Facilities Cost of Money Independent Research & Development Total indirect Costs 37, ,272, , Total Costs 71, ,990, ,062, Fixed Fee 5, , , Total Costs and Fixed Fee 75, ,228, ,307, RESERVES AND ADJUSTMENTS Cost Withhold Fee Withhold Net Reserves and Adjustments ADJUSTED AMOUNTS Current and Cumulative Costs 71, ,990, ,052, Fixed Fee 5, , , Total Amount Claimed 77, ,229, , TOTAL AMOUNT DUE 77, MAKE CHECK PAYABLE TO RAND AND REMIT TO: OR BY WIRE TO: RAND Bank of America. N.A. File # Los Angeles Commercial Banking Office Los Angeles, CA S. Flower Street Los Angeles, CA Rand Tax ID Account Name: RAND The payment terms for all invoices are net 30 Account #: ABA Routing # (Domestic) Swift Code: BOFAYS88 (Foreign)

37 In Summary UCLA is responsible for ensuring that sponsor funds provided by the University to other organizations via subawards are spent in accordance with applicable laws and regulations Carefully reviewing subrecipient invoices It is the PI/Department s responsibility to make sure subrecipient invoices are complete and compliant Invoices that are complete, compliant, and contain the signatures of both the subrecipient s authorized institutional representative and the PI will avoid delays in payment UCLA is responsible for ensuring that sponsor funds provided by the University to other organizations via subawards are spent in accordance with applicable laws and regulations. One way to achieve this is by carefully reviewing subrecipient invoices. It is the PI/Department s responsibility to make sure subrecipient invoices are complete and compliant. Invoices that are complete, compliant, and contain the signatures of both the subrecipient s authorized institutional representative and the PI will avoid delays in payment. 36

38 ORA acknowledges and thanks Victor Herrera, Supervisor in Accounts Payable, for his contribution to the content of this module 37

39 ORA acknowledges and thanks the voice of the Subaward and Subcontract modules Ken Castro-Oistad, Sr. Grant Analyst Office of Contract and Grant Administration 38