With commercial support under the microscope these days, grantors are increasingly concerned that continuing medical education providers be able to accurately document exactly how the funds they receive through educational grants are spent. Those who can detail the receipt and expenditure of education grant funds not only make it easier for grantors to ensure a funding request will be compliant with the Accreditation Council for CME Standards for Commercial Support, they also help speed up the review process.

Here’s the perspective from one commercial supporter, as presented during a session at the 2010 Alliance for CME conference, followed by a live webinar on fiscal accountability—from budget to reconciliation—held last August.

What’s All the Fuss About?
With the level of scrutiny today on all things pharma, commercial supporters have to be very transparent about how much money they spend on educational grants, and they must be able to account for every cent.

Why? The biggest reason for all the emphasis today on budgets and reconciliation is “the p word: perception,” she said. When a CME provider takes money from a commercial supporter and doesn’t spend it entirely, it could appear to be a kickback if it is not returned. Many companies are also seeing their overall CME grants budgets decreasing, which intensifies the need to know where the money is being spent. If money from a particular grant was not entirely spent, and the unspent amount was returned, then the grantor may be able to support
another activity.

Then, of course, there’s Standard 3.13 of the ACCME’s Standards for Commercial Support, which states: “The provider must be able to produce accurate documentation detailing the receipt and expenditure of the commercial support.” That’s why it’s so frustrating for grantors to hear CME providers complain when being asked to provide reconciliation, she said. It’s right in the Standards.

Budgeting 101
Start out by doing some prep work, the presenter said. This entails talking to your staff and taking a hard look at previous activities to determine exactly where the money went. Look at every cost, both monetary and those incurred in the form of staff time. Budget for everything. No expense is too small to include, even for copies and stamps.

Another key factor is to know the difference between a fee—which is a payment for a specific task—and an expense, which is anything you can provide a receipt for. It is equally important not to inflate your fees. The grantor may question you on it or, worse, outright decline your request, the presenter said.

Some basic services for which fees are charged include program management, audience generation, medical direction, content development, medical writing and editing, graphic design, information technology, meeting management, and administration. Examples of basic expenses include accreditation fees, faculty honoraria, travel, program logistics, meeting materials, enduring/print materials, and multimedia and Web materials.

It may be a hassle, but you really do need to gather receipts for every expense, she said. Having an invoice for everything ensures that the money spent is allocated to the correct program, and it allows you to track what’s actually spent along with what you have budgeted for that particular program. It also could come in handy for internal and external audits.
Some line items, such as entertainment, will raise red flags, the presenter said. Food and beverage also can be tricky—don’t just put down $5,000 for F&B. Break it down to its components so the grantor can see how you got to that total.

The same thing holds for honoraria. Don’t have just one line item of $20,000 for 10 faculty. She suggested breaking out who gets what and ensuring that you’re paying fair market value for each. “Miscellaneous,” while convenient, is also not a popular line item for grantors, she said. How do commercial supporters know it’s not for honoraria or a physician yacht party?

Key to budgeting success is project management. That means planning, organizing, and managing resources in a way that will ensure you can successfully complete your project’s specific goals and objectives. Tracking basic costs, together with the broader costs of administering the program, is an essential component of good project management.

After the activity, the presenter said it’s vital to do a final reconciliation to ensure fiscal transparency and accountabil-
ity. If any unused funds remain, a refund should be sent to the commercial supporter.

Sidebar: What Not to Do

Here are some things you should not do when it comes to budgets and reconciliations for continuing medical education activities, according to a Q&A during the 2010 Alliance for CME annual meeting:

•Don’t insert new line items after submitting the budget.

•To reduce the possibility of surprises, keep all your receipts and ensure that they match the line items afterward.

•Stay true to your line items. If you said you would spend a certain amount on AV but end up getting a better deal than expected, don’t turn around and spend the excess elsewhere. Commercial supporters have limits when it comes to honoraria, F&B, and other items, and they need to know exactly what’s spent where. When in doubt, contact the commercial supporter.

•If something changes, revise your scope and budget and go back to the commercial supporter. For example, if you end up with twice as many participants as you anticipated, explain what happened and ask if they’d be willing to support the additional costs. For multiple-supporter programs, if you can’t get the rest of the money you need, go back to the grantor with a revised scope and budget. As one speaker said, “We don’t want to find out after the fact that we supported something other than what we thought we were supporting.”

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