FIN-003: Management of Sponsored Program Awards in a Budget Deficit

Date: 06/23/2004 Status: Final
Last Revised: 03/19/2021
Policy Type: University
Oversight Executive: Vice President for Research
Applies To:

University faculty and staff who submit proposals or process awards.

Reason for Policy:

To manage sponsored program award-projects that are in a budget deficit.

Definition of Terms in Statement:
  • Deficit:

    For the purposes of this policy, a deficit is defined as a project where expenditures and outstanding commitments have exceeded the total amount budgeted.

Policy Statement:

Sponsored Program awards and projects are created as the result of an agreement with a funding agency. The budget is established at a high level according to sponsor requirements. The Office of Sponsored Programs (OSP) collects payment on expenditures in an amount not to exceed the authorized budget. Sponsored Program awards and projects 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 Sponsored Program expenditures until the actual funds are received from the sponsor. Since overcharges/overruns cannot be billed to the sponsoring agency, deficit awards place additional constraints on already limited University resources.

OSP is charged with filing financial reports required by the sponsoring agencies. In general, federal reports are due 90 days after the completion date of the project. The reports cannot be filed when a deficit exists or the award contains outstanding commitments. Many sponsoring agencies may delay issuing awards or withhold scheduled payments because of delinquent financial, progress, or technical reports. It is not possible for an award-project combination that is in deficit to be billed.

The principal investigator (PI) is responsible for ensuring that the Sponsored Program project does not exceed the budget.

OSP will facilitate corrective action on deficit projects through distribution of the “sponsored programs budget deficit letter.” Departments and PIs must have a plan for corrective action and the plan must be implemented within 70 days or OSP may transfer the deficit to the department’s facilities and administration award.

Compliance with Policy:
Failure to comply with the requirements of this policy may result in disciplinary action up to and including termination or expulsion in accordance with relevant University policies. In addition, failure to comply with the requirements of this policy and its related procedures may result in the University withholding other sponsored awards to the PI.

Questions about this policy should be directed to the Office of Sponsored Programs.


Sponsored Programs Procedures

Major Category: Finance and Business Operations
Category Cross Reference: Research Administration
Next Scheduled Review: 03/19/2024
Approved by, Date: Policy Review Committee, 06/23/2004
Revision History: Minor edit to Policy Statement 1/6/22; Added Compliance Section 1/4/22; Confirmed 3/19/21; Updated links 3/8/19; 1/11/19; Added OE/VPR 4/2/18; Updated 10/15/09.
Supersedes (previous policy): VIII.C.2: Budget Deficit