Financial Management & Budgeting Flashcards
7 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management & Budgeting flashcards as text
Under federal regulations, late cost transfers (generally those processed more than 90 days after the original transaction) raise concerns because they:
Answer: May suggest that costs are being moved to spend down a grant rather than for legitimate correction purposes
Late cost transfers raise red flags about whether the transfer is a legitimate correction or an attempt to improperly spend down a grant before closeout.
What is the purpose of a 'rate agreement' negotiated with the federal government for an academic institution?
Answer: To establish the approved indirect cost (F&A) rates that can be applied to sponsored awards
A negotiated rate agreement (typically with DHHS or ONR) establishes the approved F&A (Facilities and Administrative) rates an institution may charge to its federal awards.
Which of the following is an example of a 'direct cost' on a sponsored research project?
Answer: Salary of a postdoctoral researcher working 100% on the specific project
Direct costs are costs that can be specifically identified with a particular sponsored project, such as salaries of personnel working solely on that project.
A research administrator is reviewing a grant budget and notices that the PI has included a line item for 'miscellaneous' costs totaling $10,000 with no further explanation. What is the best course of action?
Answer: Request that the PI itemize and justify each cost, as 'miscellaneous' is not an acceptable budget category for federal awards
Federal sponsors generally do not accept 'miscellaneous' as a budget category; all costs must be specifically identified, justified, and allocable to the project.
What does 'burn rate' mean in monitoring a sponsored research project?
Answer: The pace at which budgeted funds are being expended relative to the project timeline
Burn rate measures how quickly a project is spending its budget relative to elapsed time, helping identify over- or under-spending trends.
Under the NIH salary cap, what happens when a key personnel's institutional base salary exceeds the Executive Level II pay cap?
Answer: NIH will only reimburse up to the cap amount, but the institution may pay the difference from non-federal funds
When salary exceeds the NIH pay cap, federal funds reimburse only up to the cap; the institution may supplement from non-federal sources but must not include the supplement in the institutional base salary for effort calculations.
What is the role of a 'cognizant federal agency' in the context of an institution's indirect cost rate?
Answer: To negotiate and approve the institution's F&A rate agreement on behalf of all federal agencies
The cognizant federal agency (typically DHHS or DoD) negotiates and approves the institution's F&A rate on behalf of the federal government, and the resulting rate applies to all federal awards.