This policy sets forth specific requirements for monitoring and reconciling sponsored projects. The policy also sets forth requirements for ensuring compliance with University and regulatory requirements, including ensuring that all reporting and invoicing obligations are met, and that all sponsored projects are fully paid and promptly closed. These requirements are consistent with both generally accepted practices for financial oversight, as well as Federal expectations for financial management systems.
Overview
Principal Investigators and Departmental Administrators who assist them in allocating expenditures to sponsored projects are required to exercise regular oversight over the financial records of each project. This oversight is necessary in order to ensure that, to the maximum extent possible, the following objectives are met:
- expenditures associated with a specific project are initially charged to the ARC project in direct proportion to their benefit to the project, and such costs are allowable, allocable, reasonable, and consistently charged;
- expenditure reports such as the Sponsored Projects Financial Report (SPFR) and monthly and quarterly WebViewer reports are continually reviewed to confirm the accuracy and validity of expenditures;
- any necessary corrections are made upon discovery and in accordance with the University’s Sponsored Projects Cost Transfers policy;
- project resources are carefully monitored to ensure that cost overruns are minimized, and any cost overruns for which additional sponsor funding is not anticipated are cleared upon discovery;
- payments are monitored to ensure they’re received and applied in accordance with the terms of the agreement;
- when interim or final financial deliverables (reports or invoices) are required, the project is fully reconciled with all expenditures posted to ARC in advance of the deliverable’s due date, and an expenditure validation is provided to the Finance and Compliance Manager in the Sponsored Projects Finance office by the deadline indicated in the expenditure validation request;
- upon project expiration, the project is promptly brought into balance so that it can be closed in the University's accounting system, with any encumbrances, accruals, pre-paid vouchers or petty cash cleared, and any final overrun removed and funded by non-sponsored resources.
Invoicing and Reporting
In accepting a sponsored award from a Federal or non-Federal sponsor, the University is obligated to comply with all applicable regulations promulgated by the sponsor. Among those obligations is the requirement for the timely submission of deliverables in the form of invoices or reports. SPF is the central administrative office responsible for managing the preparation and submission of these deliverables, and for obtaining information from the Principal Investigator or Department Administrator necessary to satisfy deliverable requirements.
In general, SPF prepares and submits all interim and final financial deliverables, with the exception of projects with a “Department” bill type. Projects with this bill type require unique information that positions the department as the office best suited to preparing the invoice. In these circumstances, the department must prepare the bill in advance of the deadline and send it to their SPF Finance and Compliance Manager for review, signature and submission to the sponsor.
To ensure the accuracy of deliverables submitted to sponsors, Principal Investigators and Department Administrators must continually monitor and reconcile their sponsored project’s budget, expenses and payments. Additionally, a series of reviews and validations must be performed in accordance with the following schedule:
- Quarterly: Principal Investigators must perform and attest to having reviewed each project’s financial statements
- Annually: Department Administrators must provide to SPF a validation of the finalization, accuracy and appropriateness of expenditures charged and payments applied to the project
- Final (at end of project): Principal Investigators and Department Administrators must provide to SPF a validation of the finalization, accuracy and appropriateness of expenditures charged and payments applied to the project
The quarterly validations follow a schedule set by each administrative unit or department. The annual / final validations are due to SPF by deadlines based on the project type and sponsor, generally 20-30 days prior to the sponsor’s deliverable due date. Annual / final validations must be submitted to the SPF Finance and Compliance Manager:
- 90 days after the anniversary / expiration of each project for NIH and NSF grants and cooperative agreements;
- 60 days after the anniversary / expiration of each project for all other prime awards; and
- 40 days after the anniversary / expiration of each project for subawards.
In certain circumstances, a sponsor may require a deliverable earlier than the standard timeline allows. In these cases, a validation is due to SPF 5 calendar days in advance of the sponsor’s deadline.
Additionally, SPF may require other information in order to satisfy a sponsor’s deliverable requirement, and such information is due to SPF by the deadline specified in SPF’s notification.
Expenditure Finalization, Receivable Reconciliation and Closeout
In advance of final validation deadlines, and in preparation for closing out a sponsored project, Principal Investigators and Department Administrators must conduct a thorough review of the project and execute all transactions required to finalize expenditures for the period being validated. They must also reconcile receivables to ensure expected payments have been received and applied in accordance with the terms of the agreement. All transactions must be approved and posted to ARC by the validation due date. A thorough review includes performance of the following steps:
- Review current and pending expenditures to ensure they are appropriate, allowable, and representative of all expenditures associated with the sponsored project for each activity purpose and period
- Review outbound sub awards to ensure that all invoices have been received, reviewed and paid
- Submit pending cost-transfer requests
- Clear petty cash and travel advances
- Liquidate open encumbrances and purchase orders
- Review anticipated integrating-system distributions (e.g., payroll and communications)
- Remove overrun, if one exists
- Prepare for disposition of an unexpended balance, if one exists
- Review the receivable balance to ensure all payments been received and applied in accordance with the terms of the agreement
- Prepare and submit progress reports, technical reports, certifications, and invention statements required
- Determine if a no-cost extension is necessary
- For training grants:
- Determine stipend, tuition and fee amounts by trainee to be transferred to the following period and communicate this information to the SPF Finance and Manager
- Provide the SPF Project Manager with a copy of the Statement of Appointment, Termination Notice, the ARC statements that support the stipends paid, and the Payback Agreement
Once an ARC project is fully reconciled and reported, SPF will change the ARC project status to closed. Full reconciliation means that expenditures have been finalized; all payments have been received and applied; all pre-paid vouchers, petty cash and encumbrances have been cleared; all deliverables and other financial closeout reports have been filed; if there is an overrun, it has been removed; if there is an unspent balance, the budget has been reduced to match expenses; and if there is excess cash, it has been returned to the sponsor or retained in accordance with the terms and conditions of the agreement. Prompt reconciliation of the project upon expiration is vital to ensuring that projects are able to be closed in a timely manner.
Most of these requirements are already contained in various University Policies, including the following:
- Charging Administration & Clerical Salaries, Federal Grants & Contracts (92-3)
- Charging Office Supplies & other Administrative Expenses (other than Salaries) to Federal Awards (92-4)
- Cost Sharing
- Effort Reporting
- Financial Reporting and Closeout of Sponsored Projects
- Principal Investigator Responsibilities for Financial Oversight of Grants & Contracts (92- 5)
- Project Administration
- Project Administration Project Closeouts
- Project Administration - Audits
- Project Administration Billing & Collection
- Project Administration - Financial Reporting
- Project Administration - Unallowable Costs
- Sponsored Project Cost Transfers
- Natural accounts for Segregation of Unallowable Expenses (92-1)
- Cost Overruns on Sponsored Projects
This Policy formally consolidates the requirements of each of these Policies.
