Identification and Use of Default Funding for Sponsored Awards
To define how default funding will be identified and used for sponsored awards.
Sponsored awards
Sponsored Project Management
The University of Kansas Principal Investigator (PI) Status Policy outlines that the PI on a sponsored project is ultimately responsible for the scope, fiscal affairs, and administration of the sponsored project. The PI is responsible for ensuring that all sponsored projects take place in accordance with the terms under which the sponsored award was issued and that the sponsored activity complies with all applicable federal, state, and University regulations. This responsibility includes insuring that funding for costs incurred during the performance of the project are allowable on the project, and if they are not allowable, identifying alternative funding to pay the incurred cost.
The Office of Research Award Management Services (AMS) is tasked with assisting the PI in the project management of a sponsored project, including following standard cost accounting practices around allowability, allocability, and reasonableness of costs posting to a sponsored project.
Management of cost allowability includes ensuring that sponsored project costs are posted to a project they benefit, are incurred during the project period, and do not exceed the sponsor-awarded budget amount.
Default Funding Identification
To ensure the PI(s) and staff assigned to manage sponsored projects (1) follow allowable cost best practices, and (2) address in a timely manner any cost that does not follow allowability guidelines, the applicable departmental budget personnel will identify a funding account for sponsored projects administered by their unit (projects for which the unit is a project owning organization).
Default funding will be identified based on the sponsored project owning organization (also known as administering unit). When an award is received, the default funding account identified by the project owning organization will be associated with the project.
Default Funding Use
Default funding will be used as the funding source if alternative funding is not provided by the PI or the administering unit. Default funding will go into effect when funding on the sponsored project is no longer allowable, primarily when there is no available funding remaining on the project, and/or at the end of a project.
The escalation processes for future funding and payroll exceptions will be used prior to default funding.
The following outlines the escalation process for Payroll Future Funding:
- AMS monitor future funding indicator in reporting.
- 90 days from project end date (if no extension will be requested), PI will be alerted by AMS to identify viable funding for individuals after the project end. This could include provisional sponsored project account, a non-sponsored account, or another project if the individual’s time is allocable to this project or term.
- If no response is received, at 60 days from the end date, the PI will be alerted by AMS that action is still needed. The contact in the project owning organization will be included and both will be reminded that action will be taken at 30 days to move the future payroll to default funding.
- If there is still no response, at 30 days from the project end, AMS will update the payroll system to move payroll costs from the project to default funding with a start date of the day the project ends or the day that funding is depleted. The project owning organization will be responsible for managing any non-reappointment of the position.
The following outlines the escalation process for Payroll Exception(s) or non-payroll costs to be transferred off ended or funds depleted project:
- AMS identifies salary/fringe exception or the non-payroll expense (OOE) that needs to be moved off the project.
- AMS will contact PI to provide alternative funding to move the payroll exception or the OOE to be removed from the project.
- If there is no PI response after 1 week (5 business days), AMS will follow-up with the PI and copy the project owning organization’s contact to alert them that alternative funding must be provided.
If there is no PI or unit response after 1 additional week (10 total business days), a retroactive funding adjustment (RFA) for the payroll costs or a cost transfer (OOE costs) will be completed to move the expenses to the identified default funding.
Retroactive Funding Adjustments (RFA) to move costs from the default funding to sponsored projects will not be processed to remove payroll costs from default funding to sponsored projects in cases where the sponsored project could have been identified as alternative funding or when a provisional account is not requested.
Assistant Vice Chancellor, Office of Research
ovcr@ku.edu
Financials in the Cloud (FITC) budget controls are used in the Project Management (PPM) to ensure costs that are not incurred during the sponsored project performance period or that exceed the sponsor-approved budget do not post to the project. These unallowable costs post to Exceptions in the PPM. These “exceptions” are not allowable costs on the project and alternative funding must be identified for these incurred costs to be posted in the financial system.
Default Funding is a cost center managed by a project owning organization that is identified as the source of funding if alternative funding is not identified for unallowable sponsored project RFA/cost transfer actions.
08/08/2023: New Policy published in the Policy Library.
