Principal Investigator Responsibilities for Financial Oversight of Sponsored Projects

Executive Summary

Principal Investigators are required to exercise oversight of the financial transactions and financial status of each sponsored project sufficient to ensure that charges are reasonable and necessary, allowable under the terms and conditions of the award, properly allocated to and among multiple awards and funding sources, and limited to the funds awarded for the project.

Purpose of Policy

To communicate to investigators their stewardship responsibilities for fiscal management of sponsored projects awarded to the University.

Responsible University Office & Officer

Office of the Controller

Mark Hawkins, Vice President, Finance and Controller


Deborah Goldberg, Executive Director, SPF [email protected] - (212) 851-9447

Effective Date

February 16, 1998

Revision History

Previous version dated July 9, 2012

Latest Revision: November 22, 2019

Who is Governed by This Policy

Principal Investigators

Who Should Know This Policy

  • All persons governed by this Policy {see above}
  • Deans, Directors and Departmental Chairs
  • Departmental Administrators and other departmental staff who assist Principal Investigators in managing their sponsored projects
  • Office of Sponsored Projects Administration staff
  • Office of Sponsored Projects Finance staff


Background and Objective of the Policy

As a recipient of sponsored project awards from both Federal and non-Federal sponsors, the University is required to comply with numerous rules and regulations promulgated by those sponsors. Among those agencies are the Federal Office of Management and Budget, which sets forth broad policies governing financial administration of sponsored projects, as well as numerous individual agencies that award sponsored projects such as the National Institutes of Health (NIH) and the National Science Foundation (NSF), each of which issues their own agency-specific regulations for administering sponsored projects.

Common to the regulations of all agencies is the fundamental requirement that a particular sponsored project may only be charged for costs related to that project. Fund availability or project expiration may not govern which sponsored project is charged. If an investigator's activities are entirely funded by a single sponsored project, there are no cost allocation issues. It is often the case, however, that an investigator's research is funded by multiple sources. Accordingly, it is necessary to ensure that expenditures, whether they are related to personnel, equipment, supplies or other categories, are properly allocated to the benefiting sponsored projects.

The University recognizes the importance of minimizing the administrative burden on the faculty, and encourages the use of departmental administrative and clerical personnel in carrying out routine administrative activities related to management of sponsored projects, such as bookkeeping, ordering supplies, and processing salary distributions and vendor invoices. At the same time, however, the nature of sponsored project support is such that sponsored project administration cannot be performed without guidance and oversight by the investigator, particularly when the project is supported by multiple sources. The Principal Investigator best understands the scope of the project, the effort committed to it by faculty and staff, and the relationship of that project to other projects with which resources may be shared.

Accordingly, although the Principal Investigator may delegate responsibility for day-to-day financial management of a grant or contract to others within the department or unit, the investigator must exercise appropriate oversight of the overall finances of the project. This process is vital to ensure that:

  • Funds awarded by the sponsor are used only for permissible purposes and in accordance with Federal, state, local, sponsor and University policies;
  • In expending funds, appropriate attention is given to the availability of project resources;
  • Costs, as they relate to personnel costs, are consistent with the effort allocated to the project;
  • Costs, as they relate to non-personnel costs, are appropriately charged and allocated to the project;
  • Cost overruns are avoided to the maximum extent possible, and where incurred, are promptly resolved;
  • Budget variances are monitored so that (a) where sponsor regulations require agency approval for variances over a defined threshold, the PI is aware of the need to obtain that approval, and (b) any necessary rebudgeting between direct and indirect costs is noted and completed; 
  • Cost-sharing commitments have been satisfied; and
  • Cash payments are received and applied in accordance with the terms of the agreement.

Carrying out these responsibilities requires that the Principal Investigator clearly communicate instructions to those performing the day-to-day financial administration tasks on how to allocate charges among various funding sources. Additionally, the investigator must monitor project finances throughout the life of the project, attest to having performed a quarterly review of expenditures, and validate the final state of expenditures for each project.


This policy applies to all grants and contracts, whether funded from governmental or nongovernmental sources, and is effective upon issuance.



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