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Research Administrators Council

Research Administrators Council. November 17, 2003. Sponsored Projects Accounting Update. Introduction of Kristen Rotolo Fixed Price Awards GM Enhancements in Oracle Invoicing for Awards with Task Funding Issues. Agenda. SPA has hired Kristen Rotolo as a new Sponsored Projects Accountant

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Research Administrators Council

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  1. Research Administrators Council November 17, 2003 Sponsored Projects Accounting Update

  2. Introduction of Kristen Rotolo Fixed Price Awards GM Enhancements in Oracle Invoicing for Awards with Task Funding Issues Agenda

  3. SPA has hired Kristen Rotolo as a new Sponsored Projects Accountant Start Date = November 17, 2003 Not currently assigned to any departments Primary responsibility will be reconciliation and filing of financial reports in conjunction with existing staff New Addition to SPA Staff

  4. Requests from the ABMC Provide options of Funding Sources for the departments to choose Have the F&A portion of the residual balance reflected on the Financial Review Operating Statement Fixed Price Awards

  5. Current Procedure – Direct portion of residual balance is moved by SPA Rep to 72410.000001.000.000.Dept Org.01 Fixed Price Awards (con’t) Object Code Funding Source Function Activity Code Organization Entity

  6. Three options for the GL funding source will be listed on the Closeout Memo (that is required to be signed by the PI or his/her designee) 000001 – General Unrestricted (will serve as default) 061000 – Faculty Discretionary Funds 000005 – General Unrestricted from GM Change effective November 1, 2003 Fixed Price Awards (con’t)

  7. Fixed Price Awards (con’t) • New Object Codes Created • 89301 – “Transfer to Close – Direct” • 89302 – “Transfer to Close – F&A” • Balances for each new object code will appear on the Financial Review Operating Statement on a separate line

  8. New GM attributes announced at the September 15, 2003 RAC meeting: CFDA# University Initiative IC Allowable Rate Allowable Schedule Administered By Paying Office At Risk Reason Mandatory Cost Sharing Mandatory Cost Sharing $ Cost Sharing Award # NSF Survey Category Research Type All new attributes are at the Award level in GM GM Enhancements: New Attributes

  9. SPA and the Systems Group will populate most of the information for the existing awards SPA needs Campus to help by providing the information for the following attributes: Research Type NSF Survey (this will be initially entered by SPA) SPA will email Business Managers a list of the awards for which information is needed, along with guidelines for selecting the appropriate option for each category GM Enhancements: New Attributes (con’t)

  10. Consistent with LOC procedures, effective November, 2003, Carnegie Mellon can no longer invoice for awards that have a task funding issue or that are overspent in total Invoicing on Awards with Task Funding Issues

  11. Invoicing on Awards with Task Funding Issues (con’t) Scenario #1: • No invoice will be submitted until the task funding is resolved by: • Moving funding from task 1 to task 2 to cover the deficit • Cost Sharing the deficit amount on task 2

  12. Scenario #2: PTA 1234.1.1333333 has funding of $100,000 and expenses of $110,000 Total Funding = $100,000 Total Expenses = $110,000 No invoice will be submitted until the overspent issue is resolved by: Cost Sharing the $10,000 Adding additional funding that is received from the sponsor Removing any expenses that have been charged to the award in error Invoicing on Awards with Task Funding Issues (con’t)

  13. Why can’t we invoice the Sponsors for these awards?: Cannot support the invoice amount with a systems-generated accounting statement, as is required by many sponsors ORACLE will not generate an accounts receivable balance for expenditures exceeding task funding This is consistent with awarding and funding philosophies of CM. (Also does not recognize revenue for any costs > funding) Hard copy invoices submitted to sponsors do not reconcile to system of record (ORACLE) as required by audit guidelines/OMB circulars Cannot appropriately apply cash to award (there is no receivable balance), causing a cash on hand issue Potential financial statement audit issue Not recognizing revenue Not recording receivables Appearance of federal cash on hand – FY02 & FY03 Management Letter Comments included audit finding regarding unapplied cash balances for sponsored projects Invoicing on Awards with Task Funding Issues (con’t)

  14. Ways of ensuring awards can be invoiced: Work with SPA Rep to correct task funding Use sub-tasks (but funding at top task) whenever possible Set up awards appropriately for management goals Manage awards according to set up of awards/tasks Ramifications of NOT invoicing awards with task funding or overspent issues: Some sponsors view invoiced amount as total project expenditure amount, i.e. burn rate Cash flow problem for Carnegie Mellon Invoicing on Awards with Task Funding Issues (con’t)

  15. Scenario #2: PTA 1234.1.1333333 has funding of $100,000 and expenses of $110,000 Total Funding = $100,000 Total Expenses = $110,000 No invoice will be submitted until the overspent issue is resolved by: Cost Sharing the $10,000 Adding additional funding that is received from the sponsor Removing any expenses that have been charged to the award in error Alternatives: UNTIL auto invoicing for federal awards is live we can offer the following option: Invoice up to award amount using existing system back-up which details full expenditures (inclusive of cost sharing/over-spending). This does represent formal reporting of cost sharing - no transfers should be made off of these awards after this time Once auto-invoicing is fully implemented, invoices will be created & submitted, based on receivables created by the system (automatically creating/reporting overspending as cost sharing in detail back-up) Invoicing on Awards with Task Funding Issues (con’t)

  16. Communication of “problem awards” to campus: List will be provided via email every month Budget Management Spreadsheet Monthly meetings with SPA Rep Invoicing on Awards with Task Funding Issues (con’t)

  17. Anticipated Questions: If an award has two tasks, each pointed to a different department, and one task is overspent, will the award be invoiced? No. The award will not be invoiced until the task funding issue is resolved. The sponsor views as one award, as does ORACLE. If the award is overspent, will it be invoiced up to the funded amount? Potentially not. There is no system-generated report that can support the amount needed to be invoiced. Many sponsors require detailed expense information. Invoicing on Awards with Task Funding Issues (con’t)

  18. Are we “catering” to Oracle to guide our decisions? A. No. CM made conscious decisions when implementing Oracle – funding at the task level was one of those decisions to control budgets/spending between departments. If we remove this, we will be “robbing Peter to pay Paul”. Invoicing on Awards with Task Funding Issues (con’t)

  19. Sponsored Projects Accounting Update November 17, 2003 QUESTIONS?

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