Residual Funds on Sponsored Awards, Procedure for

Purpose

To establish guidelines for faculty who have residual funds remaining in their sponsored research account upon completion of a fixed price award.

Covered Parties

This procedure applies only to fixed price sponsored agreements, including industry sponsored clinical trial agreements.

Definitions

Fixed Price Award

Boston University guarantees to deliver a product or perform a service within a specified period of time and at a fixed rate agreed in advance, regardless of actual costs incurred. Proposals created for fixed priced awards are expected to estimate costs close to the actual costs.

Residual Funds

Residual funds occur if total funding received from the sponsor exceeds total expenditures at the project ending date and all deliverables have been met.

Unrestricted Account

An unrestricted account would be any account at Boston University that has no restriction or reporting requirement to an entity outside of Boston University. This could include a fund center or internal orders starting with 909. In some instances accounts that begin with 925, 930, or 995 are also deemed discretionary in nature.

University Procedure

Funds received for fixed price, active research projects are restricted for the duration of the study and will be used for the support of that research project. Boston University expects that faculty and departments will direct charge all expenses including, but not limited to, personnel, fringe benefits, lab supplies, and subawards. After the completion of a research project, a portion of the remaining residual funds will be transferred to the departments’ unrestricted account if the following conditions are met:

  • Total funding received exceeds total expenditures
  • Sponsored agreement is fixed price
  • All deliverables have been met
  • In the signed agreement, the sponsor does not require the return of residual funds

If the above conditions are met, Boston University will distribute residual funding as follows:

  • Indirect costs will be removed from the remaining cash balance at the current negotiated IDC rate when the account enters residual status;
  • Department retains balance
  • In cases where departmental accounts are assessed a 10% F&A charge, this will be taken into consideration with residual calculations so that no double counting is done

Example #1 (Department Account has 0% F&A associated to it)

Grant#: 55xxxxxx
Funds Received: $200,000
Expenditures: $190,000
Residual Balance*: $10,000
F&A Rate: 30.0%

Department Retains: $7,692 ($10,000 / 1.3) (Department account is assessed 0% F&A)
University Retains: $2,308 ($10,000 – $7,692)

Example #2 (Department Account has 10% F&A associated to it)

Grant#: 55xxxxxx
Funds Received: $300,000
Expenditures: $250,000
Residual Balance*: $50,000
F&A Rate: 30.0%

Department Retains (Direct): $38,461.54 ($50,000 / 1.3)
Department Retains (10% F&A): $3,846.15 ($38,461.54 * 10%)
University Retains (20%): $7,692.31 ($38,461.54 * 20%)

Funds from a residual research account may be used to support ongoing research projects and research-related activities at Boston University. All expenditures must be consistent with policies and procedures established by Boston University.

*Residual Balance includes both Direct and Indirect amounts.

Responsible Parties

Subject: Fiscal Budget Oversight
Contact: Sponsored Programs Post Award
Phone: 617-353-4555

Boston University Faculty Handbook, 9.10.11 Fixed Price Awards

History

This procedure was adopted in July 2017.

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