General administrative principles and procedures applicable to any type of program sponsored by external funds, including the federal government, are examined. Contracts, grants, and cooperative agreements are the devices for authorizing sponsored programs. Since the institutions assume full legal responsibility for the programs and for fulfilling sponsor requirements, administration of these resources must be based on prudent fiscal policies, sound management practices, and effective operating procedures. Administration of sponsored programs includes proposal preparation, review, and submission; grant and contract negotiations; purchasing; development and negotiation of indirect cost rates; audit and maintenance of accounts and records; management of inventions and copyrights; property and human and animal subject controls; insuring compliance with federally mandated social programs; preparation and submission of technical and financial reports; administration of cash flow information; and compliance with other conditions of contracts, grants, and cooperative agreements. Organizational alternatives to accommodate the responsibilities or function of sponsored programs are considered, including one or more separate offices, separate corporation or foundation, and committee or board. Proposal preparation and review, negotiation, program information elements needed upon implementation, and closeouts and terminations of a sponsored project are considered. Types of contracts and grants, cost sharing arrangements, and the various conditions of performance of sponsored programs are addressed. (SW)