Residual funds are unobligated, unspent cash balances remaining in a fixed-price sponsored project cost center at the conclusion of an award. Provided all deliverables have been fulfilled and accepted by the sponsor, funds remaining at the end of the project period belong to the University. Residuals occur only when the revenue is greater than the expenses incurred. Revenue is recognized when payment is received.
The chart below outlines the steps, responsible office and person, and the estimated time required to complete each step for a Residual Funds Request.
|Steps||Responsible Office or Person||Timing|
|Submit request via email to Office of Contracts & Grants (OCG) Research Administrator and address items 1-4 in Written Justification (see below)||Principal Investigator (PI), Department Business Administrator (DBA)|
|Review request for compliance with technical reporting, conduct closeout review for any unallowable expenditures, verify cash overage and notify PI of next step||Post Award Research Administrator (RA)||5 business days|
|Approve transfer amounts which exceed 25% of the original award amount||OCG Director||3 business days|
|Process budget transfer to the residual cost center and send official award modification notice to the PI and DBA||Post Award RA||3 business days|
|In the event of sponsor non-payment, at least three (3) collection attempts will be made prior to closing the transfer request||OCG Research Financial Director and PI||Up to 3 weeks|
For audit purposes and to protect the University’s tax status, the PI must provide a formal written justification that includes responses and an affirmation to the questions and statements listed below. This is especially important when the balance to be transferred is over 25% of the initial award. For transfers over 25%, the justification must be in writing (email will be fine) and approved by the OCG Director.
- Justification for having more than 25% of the initial award remaining after the award performance period; i.e., describe any cost saving mechanism or efficient management of the project which resulted in the overage. (if applicable)
- Statement that the work under the agreement was completed and all deliverables have been made and accepted by the sponsor.
- Statement that the work was completed without using any other sponsored project funds.
- Statement that the funds in the residual will be used to further research efforts and enhance future attempts to acquire additional sponsored project funding.
When the agreement language on fixed priced awards requires the University to return unused funds, OCG will work with the PI and the sponsor to negotiate out these terms and conditions. However, if we are not able to remove language that explicitly says all unused funds must be returned, a residual transfer will not be possible. In some cases, the PI may be able to contact the sponsor for an exception; should this occur, the approval from the sponsor must be in writing.
Residual Fund Policy
For information on non-payment by the sponsor on fixed price awards, refer to the guidance found here.