Policies Index Comptroller Home UVA Documents Search

Policy: VIII.C.2x2 (inactive)

Issued: May 16, 1988

Owner: Director of Sponsored Programs

Latest Revision: March 8, 2000

SPONSORED PROGRAM DEFICIT ACCOUNTS


**INACTIVE POLICY**

For Current Policies:
Policy Table of Contents

 

1.0 Purpose

This policy describes the policy that the Office of Sponsored Programs uses to administer sponsored research accounts that have exceeded the total amount budgeted.

2.0 Policy [Top]

2.1 Overview

Sponsored Program accounts (Ledger 5) are generally created as a result of a cost-reimbursable 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.


2.2 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 send a deficit letter to the appropriate departmental administrator noting that a deficit exists and must be corrected with the proper actions (IDT, wage payroll request, etc.).  A comment field with relevant grant information such as “Preliminary Account” and “corrective action submitted on date” is included on these and succeeding letters. An additional letter will be sent 30 days later if corrective action is not taken.  OSP will review any corrective actions, so copies of them do not need to be forwarded to OSP from the departments.

If the correcting actions have not been submitted for processing, or the deficit has not been cleared within 60 days, OSP will send a memo to the department head. This 3rd notice to the department will request that copies of the actions to correct the deficit must be received within 10 days of the letter’s date, or the  department's overhead account will be charged the full amount of the deficit.

If no corrective actions are received from the department in 10 days, OSP will transfer the deficit to the department's overhead account.  A copy of the transaction will be provided to the departmental administrator.

3.0 Definitions [Top]

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.

4.0 References [Top]

5.0 Approvals and Revisions [Top]

       Previous version in effect from 5/16/88 to 3/8/00 available in policy archive.


Maintained by University Comptroller
© 2000 by the Rector and Visitors of the University of Virginia