**INACTIVE POLICY**

For Current Policies:
Policy Table of Contents

 


                      UNIVERSITY OF VIRGINIA
           FINANCIAL AND ADMINISTRATIVE POLICIES MANUAL



TITLE:  SPONSORED PROGRAM DEFICIT                 POLICY:  VIII.C.2x
        ACCOUNTS                                                   

Overview

For this policy, a deficit account is defined as an account that
has exceeded the total amount budgeted including both actual
expenditures and outstanding commitments.

Sponsored Program accounts (Ledger 5) are generally created as a
result of a cost-reimburseable agreement with a funding agency. 
The budget establishes the approved expenditure categories.  The
Office of Sponsored Programs (OSP) collects payment on actual
expenditures, up to the limit of the budget. Ledger 5 accounts are
unique, in that the State allows for the charging of expenditures
before the collection of cash.  However, the University must use
other resources to fund Ledger 5 expenditures until the actual
funds are received from the sponsor.  Because overcharges cannot be
billed to the sponsoring agency, deficit accounts place additional
constraints on the University's resources.

OSP is charged with filing financial reports required by the
sponsoring agencies.  In general, the reports are due 60 days after
the completion date of the project.  The reports cannot be filed
when a deficit exists or the account contains outstanding
commitments.  Many sponsoring agencies may delay issuing awards or
withhold scheduled payments because of delinquent financial or
technical reports.

The principal investigator must ensure the Ledger 5 account does
not exceed the budget.

OSP Actions

OSP will not process additional charges or approve commitments
against a deficit account until corrective action has been taken by
the principal investigator or the department.  If corrective action
has not been taken within 90 days, OSP will transfer the deficit to
the departmental overhead account.

OSP will identify deficit accounts the first week after monthly
financial statements are released.  OSP will then contact the
appropriate departmental administrator for a copy of a correcting
document (IDT, revised RG-1, LPO Change request, etc.) to eliminate
the deficit.

Once copies of the correcting documents have been received by OSP,
purchase requisitions and payroll action forms may be processed and
will be approved, UP TO THE AMOUNT SPECIFIED ON THE CORRECTING
DOCUMENT, less other overruns or outstanding commitments.

OSP Actions (Cont'd)

If the correcting documents have not been received or the deficit
has not been cleared within 60 days, OSP will send a memo to the
department head, stating the department's overhead account will be
charged the full amount of the deficit.

If the deficit remains after 30 additional days, OSP will transfer
the deficit to the department's overhead account.  A copy of the
transaction will be provided to the department head, the principal
investigator, and the departmental administrator.

                                                                   
ISSUED BY:                                                 05/16/88

Director of 
Sponsored Programs             8.3.2.1