CRA Financial Management & Budgeting 2 — Questions and Answers
Question 1: A principal investigator requests to move $15,000 from personnel to equipment mid-project. Under Uniform Guidance, when is prior approval from the federal agency required for this rebudgeting?
- When the reallocation exceeds 10% of the total award (Correct answer)
- When the reallocation exceeds 25% of the total award
- Prior approval is always required for any personnel-to-equipment transfer
- Prior approval is never required if the PI approves
Correct answer: When the reallocation exceeds 10% of the total award
Under 2 CFR 200.308, prior agency approval is required when rebudgeting between direct cost categories exceeds 10% of the total award amount.
Question 2: Which of the following costs is typically unallowable under federal grants per 2 CFR 200?
- Salaries for research staff directly working on the project
- Alcoholic beverages purchased for a faculty recruitment dinner (Correct answer)
- Indirect costs calculated at the negotiated F&A rate
- Travel costs to present research findings at a conference
Correct answer: Alcoholic beverages purchased for a faculty recruitment dinner
2 CFR 200.423 explicitly lists alcoholic beverages as an unallowable cost under federal awards.
Question 3: A research institution's negotiated F&A rate is 52% MTDC. If a project has $200,000 in salaries and $30,000 in equipment, what is the F&A cost?
- $104,000 (Correct answer)
- $119,600
- $104,000 minus equipment exclusion
- $104,000
Correct answer: $104,000
MTDC excludes equipment, so F&A is calculated on $200,000 only: $200,000 × 52% = $104,000.
Question 4: What is the purpose of a budget justification in a federal grant proposal?
- To summarize the total costs requested
- To explain why each line item is necessary and how costs were calculated (Correct answer)
- To list the institution's negotiated F&A rate
- To certify that costs comply with 2 CFR 200
Correct answer: To explain why each line item is necessary and how costs were calculated
A budget justification provides narrative explanation for each cost item, demonstrating necessity and explaining the methodology for cost calculation.
Question 5: Under the concept of 'cost sharing,' what is the distinction between mandatory and voluntary committed cost sharing?
- Mandatory is tracked; voluntary committed does not need to be tracked
- Mandatory is required by the sponsor; voluntary committed is offered by the institution beyond requirements (Correct answer)
- Voluntary committed cost sharing is not allowed under federal awards
- Mandatory cost sharing is always in-kind; voluntary is always cash
Correct answer: Mandatory is required by the sponsor; voluntary committed is offered by the institution beyond requirements
Mandatory cost sharing is required by the sponsor as a condition of the award, while voluntary committed cost sharing is offered by the grantee beyond what is required.
Question 6: A no-cost extension (NCE) allows a grantee to:
- Increase the total award budget without sponsor approval
- Extend the performance period without additional federal funds to complete the work (Correct answer)
- Transfer the award to a new principal investigator
- Carry forward unspent funds to a different project
Correct answer: Extend the performance period without additional federal funds to complete the work
A no-cost extension extends the performance period at no additional cost to the sponsor, allowing the grantee to complete the scope of work with existing funds.
Question 7: Which financial report is typically required at the close of a federal grant to document expenditures?
- SF-424 (Application for Federal Assistance)
- SF-425 (Federal Financial Report) (Correct answer)
- SF-270 (Request for Advance or Reimbursement)
- SF-269 (Financial Status Report)
Correct answer: SF-425 (Federal Financial Report)
The SF-425 Federal Financial Report is the standard form used to report expenditures at grant closeout and for interim financial reporting.
CRA Financial Management & Budgeting 2
A principal investigator requests to move $15,000 from personnel to equipment mid-project.
Under Uniform Guidance, when is prior approval from the federal agency required for this rebudgeting?