Procedure for Handling Cash Overage on Sponsored Awards
Procedure
Purpose:
Outlines the treatment of cash overages on sponsored awards.
Applies to:
Externally-sponsored research awards
Campus:
Edwards
Lawrence
Juniper Gardens
Parsons
Yoder
Topeka
Policy Statement:
Due to the cost and administrative burden related to remitting cash overages (refunding) back to the originating sponsor, the University of Kansas (KU) and KU Center for Research, Inc. (KUCR) adopt this procedure to retain cash overages (cash in excess of reimbursable expense) under set dollar thresholds:
- $40 or less for federally sponsored awards (including federal flow through). Federal awards are governed by Uniform Guidance 2 CFR 200.344(d) which requires all overages be refunded. Due to the cost of refunding via wire, an amount of $40 has been determined to be compliant with these federal guidelines since a refund of this much or less creates an administrative expense for KU/KUCR.
- $100 or less on non-federally sponsored award, regardless of sponsor requirements.
At the time of sponsored project close, expenses and cash revenue should match. In cases where there is a discrepancy, action will be taken by the Office of Research staff to adjust expenses or cash as necessary. These procedures are used for situations, in which the cash exceeds the expenses on the Letter of Credit (LOC) or Cost Reimbursable awards, including fixed payment awards that require cost reimbursable final invoice. Fixed Price awards with cash receipts greater than expenses will be closed using the fixed price residual distribution process.
If the excess cash balance is more than these thresholds, the refund process will apply.
Procedure
Award Management Services (AMS) and units with delegated award closeout duties will complete the project close process following the standard process for cost reimbursable and letter of credit awards to ensure cash balances with expenses. During this time, if all expenses/transactions have posted and been invoiced, all cash revenue has been received, and cash revenue is greater than expenses, the following steps will occur:
1. AMS calculates the amount of excess cash (received cash that exceeds posted expenses).
a. If the amount is under the applicable threshold (federal/non-federal), AMS will process a financial system transaction using 579906 in Other Cost No F&A, “Project Closeout Transfer” to increase expenses to mitigate the excess cash amount.
b. If the cash balance amount is above the applicable threshold (federal/non-federal), AMS will complete the Sponsor Refund Form using the sponsor refund process. If the sponsor indicates that they do not want a refund when contacted as part of the refund process, the procedure will revert to the steps noted in Point a.
c. AMS will keep record of actions in the project close file.
2. After above steps are complete, AMS will reconcile the cash and expenses to ensure they now match and complete the project close steps.
Exclusions or Special Circumstances:
The specified thresholds will not be enforced if a sponsor indicates they do not require a refund or they have a higher refund threshold.
If a sponsor specifies that a refund is not necessary but specifies use of the funds, AMS and KUCR Fiscal Affairs will work with the PI (as applicable) to ensure the funds are available for use specified by the sponsor.
Contact:
Assistant Vice Chancellor, Research Administration
ovcr@ku.edu
Approved by:
Vice Chancellor for Research
Approved on:
Tuesday, August 8, 2023
Effective on:
Tuesday, August 8, 2023
Review Cycle:
Annual (As Needed)
Keywords:
research, sponsored project
Change History:
08/08/2023: New Policy published in the Policy Library.
Research and Sponsored Projects Category:
Research and Sponsored Projects
