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Grants and Contracts Accounting Practices

Effective: 11/20/09 Approved By: Sr. Associate Vice President for Financial Affairs and Deputy CFO
Revised: 02/04/19
For Assistance Contact: Accounting Services

Purpose/Scope

This guideline outlines the accounting practices applied by the OFA.utsa to restricted funds received as grants and contracts (sponsored projects). For information on the accounting practices of Grants and Contracts Financial Services, contact the ResearchSC.utsa.

Authority

In addition to Generally Accepted Accounting Principles (GAAP), t2CFR200.ecfr, 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 UniformGuidance procurement requirements. Under this three year grace period UTSA will adhere to the old standard (OMB CircularA-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 CACGC.utsa.

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

A. Overview

The responsibility for financial management of sponsored projects is shared by GCFS.utsa. This guideline addresses the activities for which Financial Affairs is responsible. Processes for which GCFS is responsible include, but not exclusively project activation and closeout, billing and accounts management, and reporting. For more information on GCFS activities see the ResearchSC.utsa.

B. Project Activation

GFCS is responsible or project activation, which includes assignment 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.0301.utsa.

Externally funded sponsored projects are classified as current restricted funds in accordance with GAAP.

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 ExpenditureMonitoring.utsa.

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 CostTransfers.utsa.

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 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, such as the Sources & Uses Report.

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 CostSharing.utsa.

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).

F&A rates for the period September 1, 2019 through August 31, 2021:
  • Organized Research
    • September 1, 2019 through August 31, 2020 — 49.5%
    • September 1, 2020 through August 31, 2021 — 50.0%
  • Instruction — 50.0%
  • Other Sponsored Activities — 36.0%
  • Off campus — 26.0%

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 pass-through funds (GCFS is responsible for federal project-related confirmations)

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.

Related Forms

None at this time.

Revision History

Date Description
08/13/19 Updates to the rates and dates in the Facilities and Administrative (F&A) Costs section
02/01/19 Updates to the rates and dates in the Facilities and Administrative (F&A) Costs section
06/11/18 Update definition of Modified Total Direct Costs.
06/26/17 Update related to grace period extended from two to three years and clarification of GCFS responsibilities.