Grants and Contracts Accounting Practices

Purpose/Scope

Authority

University Guidelines

Table of Contents

1. Overview
2. Project Activation
3. Project Expenditures and Transfers
4. Project Closeout
5. Receivables, Billing and Drawdowns
6. Reporting
7. Cost Sharing
8. Facilities and Administrative (F&A) Costs
9. Fiscal Year-End Accounting
10. Program Income

The responsibility for financial management of sponsored projects is shared by the Office of Financial Affairs (Financial Affairs), Post-Award Administration (PAA) and Grants and Contracts Financial Services (GCFS). PAA and GCFS operate under the Office of the Vice President for Research, Economic Development and Knowledge Enterprise (VPREDKE). This guideline primarily addresses the activities for which Financial Affairs is responsible. Processes for which PAA and GCFS are responsible include, but not exclusively, project activation and closeout, cost transfers, billing and accounts management and reporting. For more information on VPREDKE activities, see the vice president for Research, Economic Development and Knowledge Enterprise.

GCFS is responsible for project activation, which includes assignment of Chartfields for the project in the PeopleSoft system.

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). Regardless of which department processes the cost transfer, if it impacts a project, GCFS approval is required. For detailed information on cost transfers, see REDKE’s Cost Transfer procedure.

The closeout of sponsored projects is primarily the responsibility of GCFS in coordination with Post-Award Administration.

Grants and contracts receivables 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. Prepaid and fixed price contracts are examples of such projects.

GCFS identifies the potential for the accrual of an interest liability on federal grants and contracts and forwards the information to Accounting Services, which posts accrued interest on a monthly basis.

If required, Accounting Services 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 financial closeout reports. PAA prepares and submits non-financial closeout reports in coordination with the Principal Investigator (PI). The REDKE office submits all reports containing primarily research data, such as the Statistical Research and Non-Research Expenditures Report and the National Science Foundation 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, such as the Sources & Uses Report.

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. OSPA assigns related Cost Centers for projects that involve cost sharing and PAA verifies that cost sharing has been authorized as appropriate. GCFS creates all other Cost Centers. For third party cost share, PAA will review and send to GCFS for reporting to the sponsor.

For more information on cost sharing, see REDKE’s Cost Sharing procedure.

The REDKE office is responsible for F&A rate distribution calculation and the related journal entries.

UTSA is accountable for program income generated from sponsored project activities.

Examples of program income are below:

• 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 and 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. GCFS will establish a Project ID to record the income.

GCFS includes program income in financial reports as required by the awarding agencies.

Related Forms

None at this time.