A person holding appointment as either a regular or research faculty member may be designated as a principal investigator (PI) by the department head with the approval of the dean. PI's are, along with all members of the faculty, responsible for determining the intellectual and logistical direction of research and scholarship, and for the training of graduate students and postdoctoral fellows.
A PI bears a number of responsibilities related to sponsored projects, typically conducting work for which external funding has been awarded. In a legal sense, externally sponsored projects are actually contractual agreements between a sponsor and the University. In order for the University to fulfill its obligations under such agreements, it relies on the PI to fulfill their role responsibly.
The PI has administrative responsibilities such as assuring that expenditures are made for the intended purpose of the project and in accordance with sponsor requirements, university policy and procedures, and any governmental regulations. The PI must comply with the technical requirements of awards such as any and all approvals (e.g. IRB, IACUC, etc.) and timely completion of periodic and final narrative reports on the progress of the project and overseeing others who participate on the project, including university personnel, consultants, and subcontractors. While a PI may delegate administrative responsibilities to another individual, ultimately the PI remains fully responsible for all charges, changes, and conduct of the funded project.
Keep in mind, each funder defines a PI differently, therefor check with funder specific guidance.