1. Research Administrators Council November 17, 2003 Sponsored Projects Accounting Update

2. Agenda  Introduction of Kristen Rotolo  Fixed Price Awards  GM Enhancements in Oracle  Invoicing for Awards with Task Funding Issues

3. New Addition to SPA Staff SPA has hired Kristen Rotolo as a new Sponsored Projects Accountant  Start Date = November 17, 2003  Not currently assigned to any departments  Primary responsibility will be reconciliation and filing of financial reports in conjunction with existing staff

4. Fixed Price Awards  Requests from the ABMC –Provide options of Funding Sources for the departments to choose –Have the F&A portion of the residual balance reflected on the Financial Review Operating Statement

5. Fixed Price Awards (con’t) Current Procedure – Direct portion of residual balance is moved by SPA Rep to 72410.000001.000.000.Dept Org.01 Object CodeFunding SourceFunctionActivity CodeOrganizationEntity

6. Fixed Price Awards (con’t)  Three options for the GL funding source will be listed on the Closeout Memo (that is required to be signed by the PI or his/her designee)  000001 – General Unrestricted (will serve as default)  061000 – Faculty Discretionary Funds  000005 – General Unrestricted from GM  Change effective November 1, 2003

7. Fixed Price Awards (con’t)  New Object Codes Created  89301 – “Transfer to Close – Direct”  89302 – “Transfer to Close – F&A”  Balances for each new object code will appear on the Financial Review Operating Statement on a separate line

8. GM Enhancements: New Attributes  New GM attributes announced at the September 15, 2003 RAC meeting:  CFDA#  University Initiative  IC Allowable Rate  Allowable Schedule  Administered By  Paying Office  At Risk Reason  Mandatory Cost Sharing  Mandatory Cost Sharing $  Cost Sharing Award #  NSF Survey Category  Research Type  All new attributes are at the Award level in GM

9. GM Enhancements: New Attributes (con’t)  SPA and the Systems Group will populate most of the information for the existing awards  SPA needs Campus to help by providing the information for the following attributes:  Research Type  NSF Survey (this will be initially entered by SPA)  SPA will email Business Managers a list of the awards for which information is needed, along with guidelines for selecting the appropriate option for each category

10. Invoicing on Awards with Task Funding Issues  Consistent with LOC procedures, effective November, 2003, Carnegie Mellon can no longer invoice for awards that have a task funding issue or that are overspent in total

11. Invoicing on Awards with Task Funding Issues (con’t) Scenario #1:  No invoice will be submitted until the task funding is resolved by: oMoving funding from task 1 to task 2 to cover the deficit oCost Sharing the deficit amount on task 2

12. Invoicing on Awards with Task Funding Issues (con’t) Scenario #2: PTA 1234.1.1333333 has funding of $100,000 and expenses of $110,000 Total Funding = $100,000 Total Expenses = $110,000  No invoice will be submitted until the overspent issue is resolved by: oCost Sharing the $10,000 oAdding additional funding that is received from the sponsor oRemoving any expenses that have been charged to the award in error

13. Invoicing on Awards with Task Funding Issues (con’t)  Why can’t we invoice the Sponsors for these awards?:  Cannot support the invoice amount with a systems-generated accounting statement, as is required by many sponsors  ORACLE will not generate an accounts receivable balance for expenditures exceeding task funding This is consistent with awarding and funding philosophies of CM. (Also does not recognize revenue for any costs > funding)  Hard copy invoices submitted to sponsors do not reconcile to system of record (ORACLE) as required by audit guidelines/OMB circulars  Cannot appropriately apply cash to award (there is no receivable balance), causing a cash on hand issue  Potential financial statement audit issue oNot recognizing revenue oNot recording receivables oAppearance of federal cash on hand – FY02 & FY03 Management Letter Comments included audit finding regarding unapplied cash balances for sponsored projects

14. Invoicing on Awards with Task Funding Issues (con’t)  Ways of ensuring awards can be invoiced:  Work with SPA Rep to correct task funding  Use sub-tasks (but funding at top task) whenever possible  Set up awards appropriately for management goals  Manage awards according to set up of awards/tasks  Ramifications of NOT invoicing awards with task funding or overspent issues:  Some sponsors view invoiced amount as total project expenditure amount, i.e. burn rate  Cash flow problem for Carnegie Mellon

15. Invoicing on Awards with Task Funding Issues (con’t) Scenario #2: PTA 1234.1.1333333 has funding of $100,000 and expenses of $110,000 Total Funding = $100,000 Total Expenses = $110,000  No invoice will be submitted until the overspent issue is resolved by: oCost Sharing the $10,000 oAdding additional funding that is received from the sponsor oRemoving any expenses that have been charged to the award in error  Alternatives: oUNTIL auto invoicing for federal awards is live we can offer the following option: Invoice up to award amount using existing system back-up which details full expenditures (inclusive of cost sharing/over-spending). This does represent formal reporting of cost sharing - no transfers should be made off of these awards after this time oOnce auto-invoicing is fully implemented, invoices will be created & submitted, based on receivables created by the system (automatically creating/reporting overspending as cost sharing in detail back-up)

16. Invoicing on Awards with Task Funding Issues (con’t)  Communication of “problem awards” to campus:  List will be provided via email every month  Budget Management Spreadsheet  Monthly meetings with SPA Rep

17. Invoicing on Awards with Task Funding Issues (con’t) Anticipated Questions: Q.If an award has two tasks, each pointed to a different department, and one task is overspent, will the award be invoiced? A.No. The award will not be invoiced until the task funding issue is resolved. The sponsor views as one award, as does ORACLE. Q.If the award is overspent, will it be invoiced up to the funded amount? A.Potentially not. There is no system-generated report that can support the amount needed to be invoiced. Many sponsors require detailed expense information.

18. Invoicing on Awards with Task Funding Issues (con’t) Q.Are we “catering” to Oracle to guide our decisions? A.No. CM made conscious decisions when implementing Oracle – funding at the task level was one of those decisions to control budgets/spending between departments. If we remove this, we will be “robbing Peter to pay Paul”.

19. QUESTIONS? Sponsored Projects Accounting Update November 17, 2003