Residual Fund Transfer

Residual fund transfers are transferred in equal portions to the PI and the school or department, after an adjustment for budgeted indirect costs, if the award recovered the applicable Facilities and Administrative (F&A) rate, as approved by the university’s cognizant audit agency.  If not, the residual transfers will be adjusted to reflect the full recovery of F&A costs prior to the transfer. The calculation will be based on the university negotiated rate multiplied by the appropriate direct costs or the full budgeted amount of proposed indirect cost, whichever is greater. Proposals approved with a lower F&A rate than the university’s negotiated rate are not excluded from this policy.

If the residual is equal to or greater than $50,000 or 20% of the total awarded (whichever is lower), the PI must prepare a memo for approval by the individual school’s Associate Dean of Research (ADR) explaining the reason for the residual balance.  The ADR is responsible for reviewing and approving the residual request, representing acceptance of any associated compliance and financial risk associated with the award and the residual amount. Office of Sponsored Projects (OSP) may have final authority for a reasonability review before distribution of residual funds. Residual transfers should be completed during award closeout period and within the same fiscal year of when the award is expected to close.

For cost reimbursable awards, where cash is received in excess of expenditures and the sponsor requests the university to continue efforts on the sponsored project, a formal letter will be sent to the sponsor from OSP to further the understanding of the new terms and conditions.  The PI must spend the funds within six months of the original end date or the funds will forfeit back to the university.

In either of the above scenarios the PI does not have the authority to negotiate with the sponsor on the use of carryover funds without the participation in such negotiations of OSP.

Residual funds must be utilized by the designated department with the approval of the dean of the school to further enhance the sponsored project related activities of the department. The PI and the department are responsible for ensuring residual funds transferred are spent in accordance with university policy.