1. COST OVERRUNS AT-A-GLANCE THE FOLLOWING IS PROVIDED AS A BRIEF OUTLINE OF THE BASIC REQUIREMENTS FOR EMORY’S OVERRUN POLICY. FOR COMPLETE INFORMATION, PLEASE READ THE FULL TEXT OF THE POLICY LOCATED ON THE FINANCE DIVISION WEBSITE UNDER POLICIES. FOR QUESTIONS ABOUT THE POLICY CONTACT OGCA.

2. DEFINITION This policy applies to “true” deficits and overruns…Not claims on cash caused by timing differences in payments from the sponsor. This policy applies whenever expenditures exceed the real or anticipated total funding from the sponsor for the account/award.

3. GENERAL REQUIREMENT For each academic department, OGCA has established three designated cost overrun accounts –One for Research (IDC 01) –One for Instruction/Training (IDC 02) –One for Other Sponsored Activities (IDC 04) Some departments, that have historically had no activity in one of the IDC areas, may not have three accounts

4. FUNDING OVERRUN ACCOUNTS The academic department is responsible for funding the cost overrun accounts. The department should review and fund the accounts on a monthly basis. Deficits should not be maintained in the overrun accounts. Overrun accounts may not cross a fiscal year in deficit. Overrun accounts must be fully funded prior to each year- end, 8/31. Overrun accounts may not be funded by restricted accounts.

5. ESTABLISHMENT OF ACCOUNTS OGCA establishes new overrun accounts in FAS, as needed. OGCA will advise the department and the School/AE of the new account number and the associated IDC. Mandatory use of the overrun accounts began as of 9/1/99, as part of the CAS DS-2 implementation.

6. The overrun accounts are established as special 2-ledgers with OGCA review and oversight. The OGCA range of 2-ledgers is 2-77000 through 2-79990 This range of 2-ledgers is managed by OGCA, not the Controller. All transactions/activities related to these accounts should be processed through OGCA including –Deficit cost transfers –Funding transfers

7. GENERAL REQUIREMENTS Cost overruns should be cleared as soon as possible. Routine correction of accounting errors and clearing deficits should occur no later than 90 days from the time of the deficit or the budget end date, whichever is first. (See also Cost Transfer Policy.)

8. GENERAL REQUIREMENTS OGCA will have the authority to clear deficits to the departmental overrun accounts if deficits are not cleared within 90 days. Only OGCA may transfer costs to the overrun accounts, using subcode 8593. This subcode may not be used by the departments for other transactions. Once costs have been cleared to the overrun accounts, the costs may not be transferred to another account. The costs must be funded within the overrun account.

9. SPECIAL NOTES Pre-award spending or accelerated spending will be reviewed under this policy. Expenditures incurred prior to an authorized pre-award period may be treated as an overrun, in conformance with agency terms as follows.

10. SPECIAL NOTES Pre-Award Overrun: –For non-NIH/NSF Expanded/FDP – applied at annual/continuation 90 day requirement. –For NIH/NSF Expanded/FDP - 90 day requirement only applies with the competitive renewal period. –For all non-Expanded/FDP - specific agency authorization is required for any pre-award spending.

11. SPECIAL NOTES When the sponsor has specific line-item rebudgeting requirements (e.g., maximum 10% line-item deviation), overages are considered overruns. Line-item deviations/deficits will be reviewed under this policy. Examples: GADHR, AHA

12. SPECIALNOTES When significant rebudgeting or line-item rebudgeting or pre-award spending requires agency authorization: –The authorization request must be submitted within 30 days of the notification from OGCA or the discovery that such a condition exists. –If the agency request is not submitted in a timely fashion, OGCA may treat the item as an overrun under this policy.

13. SPECIAL NOTES –If the agency subsequently denies the request, the costs involved in the request may not be transferred to another restricted account. –Upon notification of the denial, OGCA will clear the costs to the overrun account.

14. IMPLEMENTATION PROCEDURES A department should voluntarily declare an overrun situation, upon discovery. The department should contact OGCA to initiate cost clearing transactions. OGCA will contact a department whenever it appears that a deficit, in conformance with this policy, has occurred.

15. IMPLEMENTATION PROCEDURES OGCA will contact the department in writing, outlining the situation and giving the department a period of time to respond, correct the situation or authorize an overrun transfer. The PI, the departmental administrator and the School/AE designee will be notified. If there is no response or resolution within the time specified, OGCA will initiate an overrun transfer, in conformance with this policy. The PI, the departmental administrator and the School/AE designee will be notified that the transaction is being processed.

16. OVERRUN DATA The data (costs) captured in the overrun accounts is maintained by OGCA for audit review and for inclusion in the indirect cost proposal. Once costs have been moved into the overrun account, they cannot be reversed or removed. They must remain in the overrun status for audit and indirect cost purposes.