Section 6: Accounting for Grants and Contracts
Grants and Contracts Accounting Practices
Lenora Chapman, Associate Vice President for Financial Affairs
Last Revised On:
For Assistance Contact:
This guideline outlines the accounting practices applied by the University of Texas at San Antonio (UTSA) office of Financial Affairs to restricted funds received as grants and contracts (sponsored projects). For information on the accounting practices of Grants and Contracts Financial Services in the office of the Vice President for Research, see the UTSA Research website.
In addition to Generally Accepted Accounting Principles (GAAP), Code of Federal Regulations Title 2 Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, governs accounting practices for grants and contracts.
NOTE: 2 CFR 200 is effective 12/26/14. UTSA has accepted the three year grace period for the Uniform Guidance procurement requirements. Under this three year grace period UTSA will adhere to the old standard (OMB Circular A-110) for three full fiscal years after the effective date of the Uniform Guidance. For UTSA this grace period will end on August 31, 2018. For more information on the Uniform Guidance see Sponsored Project Procedure – Cost Accounting Changes to Grants and Contracts.
Table of Contents
The responsibility for financial management of sponsored projects is shared by Financial Affairs and Grants and Contracts Financial Services (GCFS). This guideline addresses the activities for which Financial Affairs is responsible. Processes for which GCFS is responsible include, but not exclusively project activiation and closeout, billing and accounts management, and reporting. For more information on GCFS activities see the UTSA Research website.
GFCS is responsible or project activation, which includes asignment of Chartfields for the project in the UTShare/PeopleSoft system.
Sponsored projects are assigned a Fund, Function, Project ID and Department ID depending on the characteristics of each project, and all sponsored projects have an Activity ID of “1” (Activity ID is not significant for sponsored projects). Related Cost Centers may also be assigned for projects that involve cost sharing. For more information on Project ID and other Chartfields, see FMOG - Chart of Accounts.
Externally funded sponsored projects are classified as current restricted funds in accordance with GAAP.
The monitoring of expenditures is the responsibility of the Office of Sponsored Project Administration (OSPA) and the applicable Research Service Center (RSC). Edits also exist within UTShare/PeopleSoft to aid in ensuring that expenditures are allowable and incurred within the specified performance period, and that sufficient funds are available. For more information see Sponsored Project Procedure - Expenditure Monitoring.
Financial Affairs processes cost transfers between Cost Centers, and GCFS processes cost transfers between projects that do not involve Cost Centers (transfers between projects only). For detailed information on cost transfers see Sponsored Project Procedure – Cost Transfers.
The closeout of sponsored projects is primarily the responsibility of GCFS in coordination with OSPA/RSC.
Grants and contracts receivable represent the amount owed to UTSA for expenses associated with sponsored projects.
GCFS is responsible for the billing, collection and reconciliation of grants and contracts receivable.
GCFS prepares Line of Credit drawdown requests for drawdowns from sponsoring agency systems. Financial Affairs performs the drawdowns based on the requests from GCFS, and GCFS performs the related cash deposit reconciliations.
Despite efforts to ensure that funds are not drawn in advance, UTSA may receive federal funds for a particular project prior to the expenditures being incurred. An example of this is U.S. Department of Defense contracts for which a payment schedule is provided and adhered to by the sponsor, regardless of the timing of expenditures.
The potential for the accrual of an interest liability on federal grants and contracts is identified by GCFS, and the information is forwarded to Financial Affairs which posts accrued interest on a monthly basis.
If required, Financial Affairs remits interest over the amount of $250 per year to the appropriate federal agency at the close of the federal fiscal year.
GCFS prepares and submits all financial reports to sponsors including award closeout reports, as well as all reports containing primarily research data, such as the Statistical Research and Non-Research Expenditures Report and the NSF Survey.
Financial Affairs prepares and submits the federal Disclosure Statement (DS-2), which outlines the cost accounting practices that UTSA follows or proposes to follow. UTSA submitted a DS-2 to the Department of Health and Human Services in September 2008.
Cost sharing is that portion of a sponsored project’s costs not borne by the sponsoring agency. Either UTSA or a third party may contribute cost sharing to a sponsored project. GCFS assigns related Cost Centers for projects that involve cost sharing.For more information on cost sharing see Sponsored Project Procedure - Cost Sharing.
Financial Affairs coordinates the preparation and submission of the UTSA F&A Cost Proposal to the U.S. Department of Health and Human Services. Rates are expressed as a percentage of modified total direct costs (MTDC).
The current F&A Agreement covers the period September 1, 2015 through August 31, 2017. Current rates are:
- Organized Research and Instruction - on campus – 47% MTDC
- Other Sponsored Activities - on campus – 35% MTDC
- All Programs - off campus- 26% MTDC
GCFS is responsible for F&A rate distribution calculation and the related journal entries.
Year-end accounting activities conducted by Financial Affairs include:
- Inactivation of closed Project IDs/Cost Centers in UTShare/PeopleSoft
- Preparation of schedules for the Annual Financial Report
- Confirmation of state pass-through funds (GCFS is responsible for federal project-related confirmations)
UTSA is accountable for program income generated from sponsored project activities.
Examples of program income are:
- Income from fees for services performed
- Usage or rental fees charged for use of facilities or equipment
- Funds generated by the sale of commodities developed by the project ( e.g., tissue cultures, cell lines)
Program income earned during the project period is retained by UTSA and must be:
- Added to the funds committed to the project to further eligible project or program objectives;
- Used to finance the non-federal share of the project or program; or
- Deducted from the total project or program allowable cost to determine the net allowable costs on which the federal share of costs is based.
If the awarding agency does not specify how program income is to be used, the first bullet above applies to all projects or programs. Federal awards require prior approval from the awarding agency.
UTSA must account for program income using the same rules that apply to federal grant funds. GCFS must be informed whenever it is determined that program income will be generated. In coordination with GCFS, Financial Affairs will determine the appropriate method of accounting for the income and establish Project IDs/Cost Centers to record the income.
GCFS includes program income in financial reports as required by the awarding agencies.
- UTSA Handbook of Operating Procedures, Chapter 9.32, Sponsored Programs Administration
- UT System Policy UTS142 - Accounting Policies Overview
- UT System Policy UTS142.2 - Policy for Accounting and Financial Reporting for Nonexchange Transactions(https://www.utsystem.edu/sites/utsfiles/policies/uts/uts1422.pdf)
- Code of Federal Regulations Title 2 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
None at this time.
|06/26/17||Update related to grace period extended from two to three years and clarification of GCFS responsibilities.|
Update to the Uniform Guidance purchasing rules deadline under Authority section.
Updates related to the transfer of Grants and Contracts Financial Services from Financial Affairs to Research.
Updated Authority Section.
Update additional information from DEFINE to PeopleSoft.
Revise references from CFR to applicable Circulars
Updated DEFINE information for transition to PeopleSoft.