Original Issuance Date: July 10, 1975
Last Revision Date: July 9, 2018
1. Policy Purpose
This policy sets forth the systemwide parameters related to extramural support, which includes gifts, grants, sponsored contracts, and cooperative agreements. Sound administrative procedures and services are indispensable in assuring a proper support environment for extramural programs and in establishing and maintaining appropriate relationships with outside sponsors.
2. Responsible UW System Officer
Vice President for Administration
Vice President for Finance
Each UW System institution is expected to establish and efficiently maintain necessary procedures and administrative services to assist its faculty and staff in seeking, securing and managing extramural funds. The parameters in this policy apply to sponsored contracts, gifts, and cooperative agreements.
Fee-for-Service Contracts are not governed by this policy. However, Fee-for-Service Contracts are defined in this policy because of similarities to Sponsored Contracts.
Statutory requirements and policy objectives govern various aspects of extramural support. This policy provides the parameters under which extramural support is to be administered.
Contract: A promise between two or more parties that usually involves the procurement of goods and services by one party or parties and the rendering of goods and services by the other party or parties. Contracts may be called by a variety of names (e.g., agreement, purchase order, subaward, etc.); however, the content of the document will dictate the type of contract. Some specific types of contracts include:
Sponsored Contract (also known as Research Contract): Details the obligations of two or more parties over the course of a project. It usually has specific deliverables and milestones to be met and dictates how the contracting parties will interact with each other. If the content of the document includes specific terms and conditions governing the performance of the project or program, it is considered to be a sponsored contract. Sponsored contracts may include contracts governing research, instruction, public service, or outreach activities. Sponsored contracts are subject to assessment of indirect costs.
Fee-for-Service Contract: Administration of fee-for-service contracts are not governed by this policy as they are not sponsored contracts. A Fee-for-Service contract is an agreement to perform work that:
- is routine or repetitive with minimal inventive or intellectual effort in the project design or interpretation of results;
- supports work that is in line with the institution’s mission and not primarily for the commercial benefit of the purchaser;
- may be available to multiple customers; and
- includes consideration of indirect costs in the stated fee.
Cooperative Agreement: Used in lieu of a grant when the sponsor anticipates substantial programmatic involvement with the recipient during performance of the project. Cooperative agreements are subject to the assessment of indirect costs.
Gift: Extramural support that meets all of the following criteria. Any extramural support that does not meet all five criteria to be a gift must be classified as a grant or sponsored contract. Gifts are generally not subject to assessment of indirect costs.
- The gift must provide support for broadly defined activities, such as professorships, scholarships, building projects, fellowships, research and instructional programs. The donor may restrict the use of funds to a specific program area or purpose.
- No detailed technical or fiscal reports are required. The unit or faculty member involved may provide the donor with a summary of the results of supported activities and a statement that expenditures were made in accord with the intent of the gift. If detailed fiscal or technical reports are required, the agreement is a contract, not a gift.
- All patents, copyrights and other intellectual property rights that result from activities supported by the gift are not claimed by the donor.
- The gift contains no restrictive provisions, such as delays or advance notice concerning publication or dissemination of data and information derived from activities supported by the gift.
- The gift is irrevocable by the donor.
Gift in-kind: A contribution of personal or real property. See Section 6.C.x. for reporting requirements.
Grant: An agreement that is a legal instrument of financial assistance between a sponsor and a recipient that is used to enter into a relationship where the principal purpose is to transfer anything of value. It is not used to acquire property or services or as a pass-through for the sponsor’s direct benefit or use. It is distinguished from a cooperative agreement in that it does not provide for substantial involvement of the sponsor in carrying out the activity defined by the award.
A grant is distinguished from a contract in that a grant does not constitute the procurement of goods and services. It is a unilateral act. Grants are subject to the assessment of indirect costs.
6. Policy Statement
Extramural support administration should be carried out by institutional personnel. A limited amount of coordination should be exercised by UW System Administration to maintain systemwide policies. Systemwide coordination should assure that data are available and retrievable to meet the UW System’s management needs.
A. Authority to Sign Extramural Documents
Regent Policy Documents 13-1, General Contract Approval, Signature Authority, and Reporting, 13-2, Real Property Contracts and 13-5, Capital Projects Solely Managed by the UW System: Approval and Signature Authority, along with UW System Administrative Policy 910, Leasing, govern signature authority and approval for contracts that bind the Board of Regents or individual system institutions. Refer to these policies for specific review and approval criteria.
The following are examples of extramural support documents that require authorized signature and approval. Documents that require authorized signature and approval include, but are not limited to:
- Proposals, agreements, contracts and contract supplements for research work or any other purposes upon approval of the project by the President or any Vice President of the University of Wisconsin System or the appropriate chancellor or designee with the following extramural entities:
- United States Government, or any of its agencies or departments.
- Any state or municipality or any agency or department thereof.
- Any nonprofit organization.
- Foreign entities
- Certifications, releases, inventory reports and other documents as required by the government in connection with the termination of the contracts with the federal government for research and educational services furnished by the UW System.
- Applications, notices, bonds, and other instruments required by the federal government in connection with matters relating to federal laws and regulations for the purchase and use of tax-free alcohol in UW System laboratories.
- Purchase orders and other instruments required by the federal government for the procurement of narcotics for use in UW System laboratories
- Grants from and contracts with private, profit-making organizations, in accordance with Regent Policy Document 13-1, General Contract Approval, Signature Authority, and Reporting.
- Real property contracts and leasing and related agreements.
- Design and construction contracts.
- Royalty agreements with the University of Wisconsin Press.
B. UW System Administration responsibilities
UW System Administration shall be responsible for the following:
- Establishing system policies concerning such things as publications, patents, copyrights, other intellectual property, fringe benefits and indirect costs.
- Assisting institutions in developing extramural support guidelines and complying with Federal regulations.
- Analyzing management reports to monitor and anticipate changes in extramural support programs.
- Assisting institutions in developing extramural support fringe benefit cost rates to be used in grants, cooperative agreements, and sponsored contracts.
- Maintaining oversight responsibility for development and negotiation of indirect cost reimbursement rates.
C. Institution responsibilities
Each institution shall have policies and procedures in place to administer extramural support funds.
ii. Principal Investigators/Project Directors
Each institution shall establish criteria for determining eligibility for its faculty and/or staff to act as principal investigators/project directors of extramural support programs.
iii. Cost Sharing
Each institution is responsible for cost sharing commitments.
iv. Fringe Benefits
Section 20.865, Wis. Stats., requires that fringe benefits applicable to salaries paid from program revenue funds shall be charged to such program revenue funds. Fringe benefit contributions must be charged to the appropriation from which the salary is paid. Fringe benefits are a real cost to the institution, whether the financial support is from general or program revenue sources. All budgets submitted to extramural sponsors must contain an item for all associated fringe benefit costs of the institution. For ease of administration, institutional fringe benefit rates by category of employee are established annually. When assessing fringe benefit costs to an extramural account, the rates in effect for the current fiscal year must be applied to the actual salary amount expended, regardless of the rates funded by the sponsor or the actual costs of fringe benefits for any specific employee.
Non-Federal grants, cooperative agreements, and sponsored contracts must include the fringe benefit rates currently in effect. If the sponsoring agency has fringe benefit rate that is less than the current rates, the UW institution will consider accepting that rate only after a review to determine if it is (1) a published rate, (2) an agency-wide policy, and (3) consistently applied by that organization to all of its outside grants, cooperative agreements, and sponsored contracts with educational institutions. In addition, it should be demonstrated to the Chancellor or delegated designee that the project is of sufficient importance to warrant subsidizing the fringe benefit costs of the project from other university programs.
The inclusion or exclusion of fringe benefit costs cannot be used as a bargaining point to gain a competitive advantage to secure extramural support.
v. Indirect Costs (Facilities and administrative (F&A) costs)
Each institution shall work with UW System to develop and negotiate an indirect cost reimbursement rate to be included on all grant, cooperative agreement, and sponsored contract proposals. Indirect costs, although not readily identifiable with specific projects, are real costs charged to individual grants or contracts to provide reimbursement for certain institutional expenses that cannot be directly charged since they result from shared services. Examples of indirect costs include libraries, plant operation and maintenance, utility costs, departmental support, research administration expenses, and depreciation.
All grant, cooperative agreement, and sponsored contract applications to and awards from Federal agencies must include indirect costs at the agreed upon rate set forth in the University/DHHS Negotiation Agreement, except as provided otherwise by Federal regulations.
Non-Federal grants, cooperative agreements, and sponsored contracts must include the federally negotiated rates currently in effect. In some cases, a higher rate be may be used if approved by the sponsor. If the sponsoring agency has an indirect cost rate that is less than the Federal rate, the UW institution will consider accepting that rate only after a review to determine if it is:
(1) a published rate,
(2) an agency-wide policy, and
(3) consistently applied by that organization to all its outside grants, cooperative agreements, and sponsored contracts with educational institutions.
In addition, it should be demonstrated to the Chancellor or delegated designee that the project is of sufficient importance to warrant subsidizing the indirect costs of the project from other university programs.
The inclusion or exclusion of indirect costs cannot be used as a bargaining point to gain a competitive advantage to secure extramural support.
When joint projects by several institutions of the UW System are anticipated, indirect costs should be included and reimbursed at each institution’s appropriate negotiated rate. When one institution receives extramural support and then subgrants to a second, the first shall reimburse the second’s indirect costs at the rate received by the first or the negotiated rate of the second, whichever is less monetarily. Similarly, subgrants to/from State of Wisconsin agencies may include a different indirect cost rate () if the subgrant was not anticipated at the time of the original proposal.
Use of Off-Campus Rate: The off-campus rate may be used when more than 50 percent of the grant or sponsored project is conducted in an off-campus location. The 50-percent rule can be met either by an estimation of the effort expended or by the direct costs incurred in each location.
Except when the Board has accepted a sponsored contract pursuant to s. 36.11(55m) Wis. Stats., no agreement shall be entered into with any extramural sponsor which prohibits the right of a UW System employee to publish the results of the project. The UW System and its employees have an obligation to assure that project results are made known to the general public.
vii. inventions and Patents
UW System Administrative Policy 346 (SYS 346), Inventions and Patents, governs the disclosure and reporting of inventions and patents.
UW System Administrative Policy 191 (SYS 191), Copyrightable Instructions Materials Ownership, Use, and Control governs copyrights for the UW system. UW System Administrative Policy 190, Computer Software Ownership, addresses ownership of computer software generated by UW employees.
No grant, cooperative agreement, or sponsored contract that allows for the transfer of the ownership of data shall be entered into with any extramural sponsor except as required by federal law.
Gifts-in-kind from all sources must be routed through the institution’s review process for approval and acceptance.
In accordance with s. 20.907, Wis. Stats., each institution will provide a summary report of gifts-in-kind receiving institutional approval to the Vice President for Finance after the close of the fiscal year, by September 1. The Vice President will provide a summary report to the Regents at their subsequent October meeting and a combined listing to the Legislative Joint Finance Committee and the Department of Administration by December 1.
The university may not participate in establishing the monetary value of the gift, nor should any value be assigned when the institutions submit the annual gift-in-kind report.
An inventory value based upon fair market value on the date of the gift should be established for financial reporting purposes. If the value is $5,000 or more and the useful life is more than one year, the donated item shall be included in the capital inventory. An insurance value should be determined in accordance with procedures established by the UW System Office of Risk Management.
xi. Gifts of Real Estate (Land and Buildings)
Gifts of real estate must be evaluated for potential encumbrances of State assets prior to acceptance. Regent and State Building Commission policies require an environmental audit be performed on all land and buildings prior to acquisition.
Pursuant to s. 13.48(2)(b)1m., Wis. Stats., the UW System may not accept any gift, grant or bequest of real property with a value in excess of $150,000 or any gift, grant or bequest of a building or structure that is constructed for the benefit of the UW System or any institution thereof without the approval of the State Building Commission. This requirement does not apply to agricultural land acquired by the Board of Regents under s. 36.33 (1), Wis. Stats. Regent Policy Document 13-2 establishes approval authority for gifts, grants, and bequests of real property below this threshold.
D. Reports to the Vice President for Finance and the Board of Regents
Each institution shall provide a summary of new gifts, grants, cooperative agreements and contracts to the UW System Office of Financial Administration by the 10th day of completion of each quarter. UW System Administration will determine the reporting format. The Vice President for Finance will provide a summary report to the Board of Regents on a quarterly basis.
7. Related Documents
Wis. Stat. § 13.48(2)(b)1m.
Wis. Stat. § 20.865
Wis. Stat. §20.907
Wis. Stat. § 36.11(55m)
Wis. Stat. § 36.33
Regent Policy Document 13-1, General Contract Approval, Signature Authority, and Reporting
Regent Policy Document 13-2, Real Property Contracts: Signature Authority and Approval
Regent Policy Document 13-5, Capital Projects Solely Manages by the UW System: Approval and Signature Authority
UW System Administrative Policy 190, Computer Software Ownership
UW System Administrative Policy 191, Copyrightable Instructions Materials Ownership, Use, and Control
UW System Administrative Policy 346, Patents and Inventions
UW System Administrative Policy 910, Leasing
UW System Administrative Procedure 910.A, Leasing Process
Federal Uniform Guidance 2 CFR 200
Rules and regulations of the granting agency
National Association of College and University Business Officers (NACUBO) Guidelines
8. Policy History
Revision 7: July 9, 2018
Revision 6: April 22, 2016
Revision 5: April 19, 2004
Revision 4: August 17, 1998
Revision 3: January 28, 1997
Revision 2: April 16, 1992
Revision 1: April 25, 1983
First approved: July 10, 1975*
*Replaced GAPP 2 (11/20/1972), 2a (02/26/1973) and Addendum to 2a (03/20/1974)
9. Scheduled Review