Presentation on theme: "FIXED PRICE RESIDUAL FUNDS POLICY Includes procedures and example for determining the distribution of residual funds in accordance with FSU policy. CReATE."— Presentation transcript:
FIXED PRICE RESIDUAL FUNDS POLICY Cost Reimbursable Agency pays FSU based on allowable project costs; excess funds are returned to agency VS. Fixed Price Agency pays FSU amount specified in contract; not based on expenditures; excess funds retained by FSU
FIXED PRICE RESIDUAL FUNDS POLICY What are Residual Funds? The funds remaining on a fixed price project after the final closeout. Why does FSU have a policy? A policy is necessary to outline the process for the distribution of the residual funds.
The project expiration date All deliverables have been completed and accepted by sponsor All expenditures and commitments have been cleared (no encumbrances remain) All cash has been received from sponsor Property & equipment, if any, has been properly assigned. A fixed priced project will be closed out as soon as possible after:
Verifies the final calculation of F&A (Indirect) costs earned based on the rate/base in the approved agency budget. If necessary make an adjustment for any difference. Reviews the reasonableness of total expenditures when compared to the work performed. In determining the amount of a projects residual funds, SRAS:
Residuals balances 15% and Greater SRAS Coordinators will require Principle Investigator to submit the following: Written justification for residual balances equal to or greater than 15% Written certification that all expenditures have been charged to fixed priced project
Issues with residuals 15% and greater Another sponsored project charged for fixed price expenditures Effort not certified for work performed on fixed price projects Insufficient justification for unspent funds
Residuals less the $500 will be transferred to the Departments SRAD Account if there is not an existing PI Support Account. If there is an existing PI Support Account, the first $75,000 will be transferred to a "PI Research Support" account. The PI support account will be established in primary PI's name. If there is more than one PI on a project, the primary PI may make funds available to other PIs. Funds will not be prorated among PIs and set up in separate accounts. Residual funds, under policy, will be distributed as follows:
Any remaining balance will first be used to recover any shortage of F&A costs actually recovered under the project compared to the amount of F&A cost from using FSUs negotiated federal rate. If a project is performed off-campus, the off-campus rate will apply (26%). If project is performed on- campus, the on-campus rate will apply (currently 47% except for the MagLab). After transferring the first $75,000 to the PIs Research Support account:
After transferring first $75,000 to the PIs Research Support account, contd Any difference between F&A costs charged to the project and F&A costs that could have been earned at the federal F&A rate will be charged to the project. This will result in additional F&A monies being available for distribution in accordance with FSUs SRAD policy.
Fifty percent (50%) to the PI Research Support account. Again these monies will to be used to further Universitys research mission Fifty percent (50%) to VP for Research. These funds will also be used to support University faculty research programs. If after transferring initial $75,000 to the PI and charging F&A at the full federal rate, any remaining funds will be distributed as follows:
Example of Fixed Price Residual Funds distribution A grant was awarded for $402,500. The budget for direct costs (DC) totaled $350,000 for salaries and fringe benefits and indirect costs (IDC) totaled $52,500 at a 15% TDC rate. A total of $230,000 was actually expended. Award Actual Expenditures DC $350,000 DC $200,000 IDC $52,500 ($350K x 0.15 TDC) IDC $30,000 ($200K x 0.15 TDC) Total $402,500 Total $230,000
What is the Residual Funds amount? $402,500 Award Total (230,000) Actual Expenditures $172,500 Residual Funds The first $75,000 goes to the PI. After that, Indirect Costs are recalculated as follows:
The grant was awarded for $402,500. A total of $230,000 was expended ($200,000 salaries and fringe benefits and $30,000 IDC at 15%). $200,000 MTDC Expenditures 0.47 IDC Full federal rate $ 94,000 IDC Amt @ Full federal rate (30,000) IDC charged @15% $ 64,000 Additional IDC earned The difference between amount of indirect cost based on awarded rate and full federal rate is calculated
$97,500 $64,000 Additional IDC $33,500 $16,750 PI SRAD OVPR PI (50%) Residual How Are Residual Funds distributed? $402,500 Award (230,000) Expenditures $172,500 Residual Funds $75,000 $172,500 (50%)
Ordinarily, such residual funds will be transferred to the VP for Research. However, the Department Chair may request that the funds be transferred to the Departments SRAD Allocation account. Approval is at the discretion of the VP for Research. In either case, these funds must be used to support University research programs. If PI leaves FSU and funds remain in PI Research Support project: