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Section 6: Accounting for Grants and Contracts

Grants and Contracts Accounting Practices

Effective Date:


Approved By:

Lenora Chapman, Associate Vice President, Financial Affairs

Last Revised On:


For Assistance Contact:

Assistant Vice President, Financial Affairs and Controller


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, 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 one-year grace period for the Uniform Guidance procurement requirements.  Under this one-year grace period UTSA will adhere to the old standard (OMB Circular A-110) for one full fiscal year after the effective date of the Uniform Guidance. For UTSA this grace period will end on August 31, 2016.  For more information on the Uniform Guidance see Sponsored Project Procedure – Cost Accounting Changes to Grants and Contracts.  


Table of Contents

A. Overview

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.  For information on GCFS activities see the UTSA Research website.

B. Project Activation

Upon receipt of award documentation, Department ID and Project ID designations from GCFS for a sponsored project, Financial Affairs assigns the Speedtype, Fund and Function, and enters all of the Chartfields for the project in the UTShare/PeopleSoft system. 
Externally funded sponsored projects are classified as current restricted funds in accordance with GAAP.  

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 by GCFS for projects that involve cost sharing.  For more information on Project ID and other Chartfields, see FMOG - Chart of Accounts.

C. Project Expenditures and Transfers

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.

D. Project Closeout

The closeout of sponsored projects is primarily the responsibility of GCFS in coordination with OSPA/RSC. 

E. Receivables, Billing, and Drawdowns

Grants and contracts receivable represent the amount owed to UTSA for expenses associated with sponsored projects.

GCFS is primarily 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.

F. Reporting

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.

Financial Affairs also prepares and submits the Schedule of Expenditures of Federal Awards and coordinates other reports that require information from both GCFS and Financial Affairs.

G. Cost Sharing

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.

H. Facilities and Administrative (F&A) Costs

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:

  • Research - 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.

I. Fiscal Year-End Accounting

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 (non-project) pass-through funds (GCFS is responsible for federal and project-related state confirmations)
  • Accounting adjustments (e.g., deferred revenue, unbilled accounts receivable).


J. Program Income

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.





Financial assistance agreements from sources outside the university to carry out an approved project or activity in support of the research, instruction or public service missions of the university.


Written, legal agreements between the university and an awarding agency normally involving the generation of a product, service or other consideration by the university in return for the sponsored support from the agency.

Modified Total Direct Costs (MTDC)

Total direct costs allocable to a grant or contract excluding equipment, capital expenditures, tuition remission, rental costs, patient care costs, scholarships and fellowships as well as the portion of each subcontract and subgrant in excess of $25,000. MTDC represents the costs to which the F&A rate may be applied to determine allowable indirect charges to a grant or contract.



None at this time.


Date Description

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.


Revised the Facilities and Administrative (F&A) rates, effective September 1, 2011 through August 31, 2015.


Revised Section E. Cash Management and added subsections 1 and 2. Removed "Cognizant Agency" entry from Definitions section. Conducted consistency edits throughout document.


Added business process and procedure details to the Accounts Receivable Services section.


Published guideline.

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