Original Issuance Date: July 10, 1975
Last Revision Date: April 22, 2016
1. Policy Purpose
This policy sets forth the systemwide policy related to extramural support, which includes gifts, grants, contracts, and cooperative agreements. Sound administrative procedures and services are indispensable in assuring that a proper University atmosphere exists in support of extramural programs and in establishing and maintaining proper 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 securing and using extramural funds.
Statutory requirements and policy objectives govern various aspects of extramural support.
Extramural support as outlined in this policy is subject to the following definition of terms:
To qualify as a gift to the institution, extramural support must meet all of the following criteria. Any extramural support that does not meet all five criteria to be a gift will be classified as a grant or contract subject to the assessment of indirect costs.
- Funds provide general, unrestricted support for broadly defined activities in one or more program areas, such as research, public service, instruction, fellowships/traineeships, etc.;
- Detailed reports are not required–neither periodic or final, nor fiscal or technical. (The principal investigator may provide the donor with a brief statement that the expenditures were in accord with the intent of the gift);
- No provisions (delays, advance notice) are imposed by the donor concerning publication of data and information derived from the activity;
- There is no specific time limit on the expenditure of funds; and,
- Rights to any patent/copyright are not retained by the donor.
A grant represents a mutual joining of interests on the part of the grantor and grantee institution in the pursuit of common objectives. In this relationship, the grantee institution assumes with the grantor the obligation to act in the public interest in achieving a common purpose. This is a relationship of trust which imposes upon the grantee institution the responsibility to assure that the grant funds are utilized for the purpose for which they were awarded, and to exercise the same probity and prudence in their expenditure that is extended to the use of the grantee institution’s own funds.
A grant is distinguished from a contract in that a grant does not constitute the procurement of goods and services by the grantor. The grant is a unilateral act.
A contract is a promise between two or more parties which 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 can be fixed price contracts or cost-reimbursement contracts.
D. Gifts-in kind
A gift-in kind is a contribution of personal or real property which requires annual reporting by the institution. (See Section 6.C.x. regarding reporting, inventory and insurance valuation.)
E. Cooperative Agreement
An agreement is an understanding between two or more parties as to their relative rights and duties. An agreement is used in lieu of a grant when the sponsor anticipates substantial programmatic involvement with the recipient during performance of the project.
6. Policy Statement
Research 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 Contracts, Certifications, Applications, etc.
Regent Policy Document 13-1 governs signature authority and approval for contracts and agreements that bind the Board or any institution. Regent Policy Document 13-2 governs real property and construction signature authority.
The following are examples of extramural support documents that require authorized signature and approval:
- 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.
- 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 University of Wisconsin 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 the laboratories of the University of Wisconsin System.
- Purchase orders and other instruments required by the federal government for the procurement of narcotics for use in laboratories of the University of Wisconsin and in University Hospitals.
- Grants, contracts, leases, and agreements with private-profit making organizations, with the understanding that those in excess of $1,000,000 require formal acceptance by the Regents prior to execution. Leases also require formal acceptance by the Board of Regents prior to execution if: (1) a proposed leased space is not available in an existing building and would require the construction of a new building to satisfy the space need; or (2) negotiations for a new lease would involve leased space in excess of 10,000 assignable square feet; or (3) the proposed initial term of a lease would exceed 5 years (excluding renewal options).
- Royalty agreements with the University of Wisconsin Press.
B. UW System Administration responsibilities:
- Establishing system policies concerning such things as publications, patents, copyrights, 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.
- Developing fringe benefit cost rates to be used in grant proposals.
- 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 mandatory 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. Thus, all budgets submitted to extramural sponsors must contain an item for all associated fringe benefit costs of the institution. For ease of administration, System Administration annually provides fringe benefit rates by category of employee. 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.
v. Indirect Costs (Overhead)
Each institution shall develop and negotiate an indirect cost reimbursement rate to be included on all grant and 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, such as libraries, plant operation and maintenance, utility costs, departmental support, research administration expenses, and depreciation or use allowance for buildings and equipment.
All grant and contract applications to and awards from Federal agencies (except as provided otherwise by Federal regulations) must include indirect costs at the agreed upon rate set forth in the University/DHHS Negotiation Agreement.
Indirect costs for non-Federal grants and contracts must be included at 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 which is less than the Federal rate, the University will consider accepting that rate only after a review to determine if it is (1) a published rate, and (2) an agency-wide policy, and (3) consistently applied by that organization to all of its outside grants and 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 are anticipated by several institutions of the UW System, indirect costs should be included and reimbursed at each institution’s appropriate negotiated rate. When one institution receives extramural support and then subcontracts to or purchases services from 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.
Except when the Board has accepted a research 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 University employee to publish the results of the project. The University and its employees have an obligation to assure that project results are made known to the general public.
The University of Wisconsin does not contract with or otherwise require its employees to produce inventions and, thus, does not claim proprietary rights in employee inventions, except for the continuing right to use such inventions in its education and research mission. In the absence of contractual provisions obligating the transfer of all or some proprietary rights to the invention to a third party, employees who make inventions have complete ownership and control of any resulting patents. UW System policies and procedures governing patents are found in UW System Administrative Policy 346 (SYS 346), Inventions and Patents.
UW System policies and procedures governing copyrights are set forth in UW System Administrative Policy 191 (SYS 191), Copyrightable Instructions Materials Ownership, Use, and Control. Subject to circumstances noted in SYS 191, a copyright which a University employee obtains on his or her original work shall belong to the employee. Further, as provided in SYS 191, when copyrights are the subject of agreements between the University and extramural sponsors, University employees must cooperate in honoring all such contractual commitments. UW System Administrative Policy 190 (SYS 190), Computer Software Ownership deals with licensing agreements for computer software.
No agreement shall be entered into with any extramural sponsor which allows for the transfer of the ownership of data. (This is not meant to cover proprietary data originally belonging to the sponsor.)
Gifts-in-kind from all sources, including private donors, foundations, corporations, etc., require the recipient of each gift-in-kind to route the item through their institutional review process for approval and acceptance (including a review for hazardous materials) as part of the Regent reporting process.
In accordance with s. 20.907, Wis. Stats., each institution will provide a listing and 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
Per Board policy, 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 should be established based upon fair market value on the date of the gift for financial reporting purposes. If this value is $5,000 or more and the useful life is one or more years, the donated item shall be included in the capital inventory. An insurance value should be determined in accordance with procedures established by the System Administration Risk Management office.
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 University of Wisconsin 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 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..
D. Reports to the Vice President for Finance and the Board of Regents
Each institution shall provide a summary of new gifts, grants, contracts, leases, and agreements, including royalty agreements with the University of Wisconsin Press, 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
Regent Policy Document 13-2
Applicable Federal Office of Management and Budget (OMB) Circulars
Rules and regulations of the granting agency
Guidelines established by the National Association of College and University Business Officers (NACUBO)
8. Policy History
Revision 6: 04/22/2016
Revision 5: 04/19/2004
Revision 4: 08/17/1998
Revision 3: 01/28/1997
Revision 2: 04/16/1992
Revision 1: 04/25/1983
First approved: 07/10/1975
Replaced GAPP 2 (11/20/1972), 2a (02/26/1973), and Addendum to 2a (03/20/1974)
9. Scheduled Review