Unbillable Sponsored Costs - Cost Overruns / Sponsored Project Exceptions

Policy No: 
3.5
Type of Policy: 
Administrative
Effective Date: 
December 2014
Last Revised: 
December 2014
Review Date: 
April 2017
Policy Owner: 
Office of Grants and Contracts Accounting
Contact Name: 
Sandra Mason
Contact Title: 
Senior Director
Contact Email: 
sandy.mason@business.gatech.edu
Reason for Policy: 

Although all expenditures and encumbrances are obligations of the Institute, only those costs to sponsored projects within the project performance period, approved award value, and terms and conditions of the award, are billable costs. Any other costs are unbillable and must be paid from alternative sources of funding. It is the fiscal responsibility of the incurring unit to cover costs obligated.

Untimely resolution of unbillable amounts may cause serious cash flow problems, may result in misstated financial statements, and may also result in unfavorable audit scrutiny.

Policy Statement: 

After notification by the Office of Grants and Contracts (G&C) Accounting that unbillable costs have been incurred on an externally funded sponsored project, the unit will be given an opportunity to resolve the problem before the expenditure is moved to the unit's cost overrun project.

Scope: 
All employees engaging in sponsored research activity.
Policy Terms: 

Advanced Project Number
A project to which expenses may be charged on behalf of an anticipated program prior to receipt of a grant or execution of an agreement, with approval from the Office of Sponsored Programs.

Procedures: 

To assist with the identification of sponsored projects that need special attention and corrective action, G&C Accounting prepares a monthly exception report to identify all awards with expenditures in excess of available funds and/or active awards with expired term dates. The monthly exception report is distributed to G&C personnel, unit financial officers and appropriate Deans/Directors; representing formal notification to the incurring unit. Corrective action must be taken to clear unbillable amounts as identified each month in the Sponsored Project Exception Report.

In addition to the monthly reporting procedures, G&C Accountants will initiate additional action to clear unbillable costs on sponsored projects. When the assigned G&C Accountant determines that costs incurred are unbillable to the sponsor, the following steps are taken:

  1. G&C contacts the incurring department to determine if immediate action can be taken to resolve the unbillable costs. If the administrator indicates that action will be taken to clear all unbillable amounts within a reasonable time frame (typically 30-60 days), no additional action is required at that time. The assigned G&C Accountant may also contact the Office of Sponsored Programs (OSP) at this stage to determine if official modifications are pending.
  2. If action is not indicated by the department or there is no pending action indicated to resolve the outstanding unbillable costs, the project will be reported to a G&C Accounting Manager. Review and follow-up by G&C Accounting is on a continuing basis until the unbillable costs are resolved in some manner.
  3. If appropriate action is not taken by the incurring unit and no additional information is provided to substantiate the unbillable amounts within approximately 60-90 days, all questioned costs will be transferred to the unit’s cost overrun project. This cost transfer will typically be processed within 90 days of the reported exception but may occur sooner as required by applicable financial reporting and/or invoicing requirements. It should be noted that costs transferred to a unit’s cost overrun project may be redirected to other projects as appropriate and as approved.
  4. These corrective action procedures do not apply to sponsored projects established with OSP-approved Advance Project Numbers or to current projects pending receipt of official modifications. However, written proof/justification from the sponsor is required under these circumstances.

Forms
Reports are available in the Web Grants Management (GM) system to assist Principal Investigators, assigned delegates, and unit financial officers in providing proper oversight and management of sponsored projects. Proper project management includes posting all appropriate expenses on a timely basis, ensuring that costs are allowable and allocable to the project, and ensuring that expenses do not exceed the authorized budget. The “90 Days to Expiration Report” and the “Project Status Report” are useful for identifying projects that are at or approaching the unbillable stage. These reports are accessible from the main menu of Web GM.

Additional information related to Web GM, including access requirements and training materials, may be accessed from the Grants and Contracts Accounting web site at www.grants.gatech.edu

Contact the Office of Grants and Contracts Accounting at gc.ask@business.gatech.edu for specific guidance related to managing sponsored projects at Georgia Tech.

Responsibilities: 
Principal Investigators, assigned delegates, and unit financial officers are responsible for providing proper oversight and management of sponsored projects during the performance and close-out periods.
Enforcement: 
To report suspected instances of noncompliance with this policy, please visit Georgia Tech’s EthicsPoint, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=7508
Policy History: 
Revision DateAuthorDescription
11-05-2014Office of Grants & Contracts AccountingAlign with 2 CFR 200
04-01-2014Office of Grants & Contracts AccountingAdministrative review
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