Clearing Sponsored Project Overdrafts

Before the Award End Date

If a sponsored project PTA incurs an overdraft (OD) before the award end date, either:

1. Transfer the relevant cost(s) that overspent the award onto another research related non-sponsored PTA owned by the PI or sponsored project which also benefited from the cost and provide a detailed justification. 

   NOTE: Transferring expenses from an overdrawn sponsored award to another sponsored award are considered high risk and require a robust justification which very clearly explains how the expenses benefit the receiving sponsored award, why the expenses were not initially posted correctly, and what will be done going forward to ensure costs are appropriately allocated at the onset.  

   OR...

2. Treat the transfer in the same manner as cost sharing =
   1. request an overdraft cost share PTA be setup via submitting a SeRA Central Office Request for a New Cost Sharing Award-Task
   2. Transferring all OD expenses to the cost share PTA.
   3. Coordinating funding of the cost share PTA from a PI or departmental non-sponsored fund.

After the Award End Date

Errors

If you discover an error/any unallowable expenses after the award end date, transfer the expense(s) prior to closeout.

Overdrafts

An overdraft (OD) exists if after the award end date expenses exceed funding. 

NOTE: an overdraft typically prevents final billing to sponsors.  It is critically important that departments clear ODs on sponsored projects in a timely fashion, ideally no later than one (1) General Ledger (GL) month after an award end date.

Expenses removed as a result of an overdraft typically should have been incurred during the last 6 months of the project.  Alternatively said, the last expenses incurred, should typically be the first expense to transfer when clearing an overdraft.

An OD after the award end date does not represent committed allowable cost sharing, but ODs must be charged to a cost sharing account in order for the OD costs to be properly captured for the calculation of the Indirect Costs (IDC) or Facilities & Administrative (F&A) cost rates.

• If a sponsored award ends in overdraft less than or equal to $500 total costs [direct + indirect costs], the managing Department Award Manager may contact the OSR Closeout Accountant and provide an appropriate PTA to facilitate the processing of a one-time journal to transfer the direct cost amount of the overdraft as a lump sum using Expenditure Type (ET) 56135 to a non-sponsored, unrestricted PTA owned by the PI or Department. Use of ET 56135 is required to segregate the transferred costs and facilitate the proper analysis and calculation of IDC by the ORA Cost and Management Analysis team.
• If a sponsored award ends in overdraft in excess of $500 total costs, the department is responsible for…
  • Requesting an overdraft cost share PTA be setup via submitting a SeRA Central Office Request for a New Cost Sharing Award-Task.
  • Transferring all OD expenses to the cost share PTA.
  • Coordinating funding of the cost share PTA from a PI or departmental non-sponsored fund.