Office of Sponsored Research - 700.04 - Residual Fund Balance

Title

Office of Sponsored Research - 700.04 - Residual Fund Balance

Purpose

Accepting a fixed price agreement involves a degree of risk because the University must complete all work even if the costs exceed the amount of the agreement. In addition to mitigating the risks associated with accepting fixed price agreements, the University must also ensure that relevant costs are assigned to the appropriate project and that the necessary processes are in place to assure consistency in estimating, accumulating, and reporting costs.

Consequently, Principal Investigators (PI) must budget carefully to ensure that the amount of the agreement is sufficient to cover project costs, ensure that all allowable and allocable costs are assigned to the appropriate project, and provide adequate documentation to justify large residual balances.

Policy Statement

A residual balance on a sponsored project is defined as the unobligated cash that remains at the end of the performance period after all deliverables and financial obligations have been fulfilled, and final payment has been received. Residual balances may be used to further University academic, research, and service missions.

At the end of the performance period, residual balances on sponsored projects will be transferred to the administering department when all of the following conditions are met:

  • All direct charges and project revenue have been accounted for properly
  • All project deliverables have been provided and accepted by the sponsor
  • All project payments have been received from the sponsor
  • The applicable amount of indirect costs generated by the project’s expenditures have been recovered
  • The sponsored agreement terms do not require the University to return the residual balance
  • Justification for residual balances greater than 25% of the Total Award Amount - insufficient justification will require further documentation prior to processing a residual request

Projects with minimal or no direct expenses will be charged the full amount of indirect costs from the residual balance based on the Total Award Amount.

Exclusions

Indirect costs will not be applied to residual balances except in the following instance:

  • Applicable residual balances will be reduced to recover indirect costs if the project received a full or partial Facilities and Administrative (F&A) waiver or if a reduced indirect rate was otherwise awarded by the sponsor. The amount charged will be up to the total amount of indirect costs that would have been incurred had the project not received a waiver, based on the current direct costs.

Related Requirements

Unit Policies, Standards, & Procedures

OSR Operating Standard 700.04, Procedure 1 - Requesting a Residual Balance Transfer

Contact Information

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSR Staff assignments are found in RAMSeS or on the OSR website.

History

Document History
Date Revision
05/15/2018 Revised to coincide with the release of the new OSR Website.
12/17/2018 Policy revised to provide clarity on indirect calculations, exclusions, and required justifications.
10/17/2017 Operating standard revised so that indirect recovery is based on incurred expenses (exclusions apply), justification threshold increased to 25%, and operating standard now applies to all sponsored projects.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Details

Article ID: 132336
Created
Thu 4/8/21 9:29 PM
Modified
Fri 7/23/21 1:34 AM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
02/19/2021 9:19 AM
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Distinguished Professor
Last Review
Date on which the most recent document review was completed.
02/19/2021 9:19 AM
Last Revised
Date on which the most recent changes to this document were approved.
05/14/2019 12:00 AM
Origination
Date on which the original version of this document was first made official.
04/01/2010 12:00 AM
Responsible Unit
School, Department, or other organizational unit issuing this document.
Research