Revision Date: April 14, 2026
Contents
4. Residual Balance Transfer Process
1. Overview
This document establishes procedures for requesting the transfer of Residual Balance funds remaining on fixed price, fee-for-service, or fixed fee agreements after satisfactory completion of the work and submission of all required deliverables.
2. Purpose
The purpose of this procedure is to establish a process that:
- provides access to Residual Balances remaining on affected sponsored awards;
- provides a consistent method for obtaining approval for the transfer of Residual Balances; and
- ensures that the transfer of Residual Balances to non-sponsored accounts are not prohibited by any requirements provided by the original sponsor.
3. Definitions
Fixed Amount (Grant)/Price Award (Contract)
A type of agreement under which the sponsor (including pass-through entity) provides a specific level of support without regard to actual costs incurred. The sponsored agreement or contract is not subject to any adjustment based on Yale University’s (“Yale”) cost experience in performing the agreement. This agreement type places upon Yale maximum risk and full responsibility for all costs. It provides maximum incentive for Yale to control costs and perform effectively.
A federal Fixed Amount award reduces some of the administrative burden and record keeping requirements for both Yale and the federal awarding agency (or pass-through entity).
Note: An agreement that includes fixed fee payments is not a fixed fee grant/contract. A fixed fee is an agreed-upon cost of an activity identified in a grant/contract budget that may result in a Residual Balance on the award. The most common uses of fixed fee activities are those associated with a clinical trial whereupon the sponsor and Yale agree to a per-patient capitation payment or set fees for tests or specific milestones as services are provided.
Residual Balance
The balance of award funds that remain when a sponsor’s agreement permits Yale to retain unspent funds after all work on the project has been completed. A Residual Balance exists when the total funding provided by the sponsor is not fully expended after all allowable and appropriate project expenses (e.g., salary commensurate with effort) have been charged to the award. Residual Balances may occur on grants or contracts, including clinical trials and research service agreements.
4. Residual Balance Transfer Process
After the project has ended, the work completed, the deliverables met, and the sponsor does not require the return of remaining funds, the Principal Investigator (“PI”) may request that the remaining funds be transferred to an unrestricted account (e.g., FD01 or FD18) and used to further research. In the event that the work is not complete, and deliverables have not been met by the anticipated due date, immediately contact the Office of Sponsored Projects (“OSP”) to discuss next steps. It is imperative that PI salary representing his/her effort be charged to the award. If requesting an extension for a clinical trial agreement, confirm that the institutional review board (“IRB”) approval date(s), at a minimum, agree with the period of the contract.
To initiate the Residual Balance transfer process for SPFA-managed awards (FD02/FD28) (i.e., federal and non-federal grants and contracts), the Departmental Business Office (“DBO”) or Business Support Unit and PI must submit Form 1301 FR.01 Request to Transfer Residual Balance from Sponsored Awards and Financial Status Report (“FSR”) to Sponsored Projects Financial Administration (“SPFA”) with required signatures for review and approval.
To initiate the Residual Balance transfer process for Industry Clinical Trials (FD29), complete Request to Transfer Residual Balance from Industry Clinical Trial Sponsored Awards and submit to the YSM Controller’s Office (ysmcontroller@yale.edu).
Note: Large balances may require further justification and explanation.
Once the form is completed with appropriate signatures and the signed financial status report (“FSR”), has been submitted to SPFA or YSM Finance (as applicable):
For SPFA-managed awards (FD02/FD28) (i.e., federal and non-federal grants and contracts)
SPFA will:
1. Confirm Form 1301 FR.01 Request to Transfer Residual Balance from Sponsored Awards is appropriately completed and signed, and the University has been reimbursed for the work completed. Prior to approving the request, SPFA will confirm the award is expired, review the terms and conditions of the award and determine whether the Residual Balance request may be approved (for example, the award does not require that any unexpended funds be returned to the sponsor). If the documentation is unclear as to whether the University can retain the residual funds, SPFA Financial Management and OSP Award Manager(s) will jointly review the terms and conditions of the award. If still unclear:
- SPFA will send a request to retain the Residual Balance (for research purposes) to the sponsor accompanied by the final financial report, if appropriate. Yale will request that the sponsor respond within 30 days from the date of the request.
- If the sponsor requests the residual funds be returned, the University is obligated to return the applicable balance to the sponsor. SPFA will initiate the return of the balance to the sponsor and subsequently close the award.
- If the sponsor does not acknowledge or reply within the designated 30-day period, the University retains the balance.
2. Prepare a journal entry to process the Residual Balance.
- Increase the expenses on the award up to the payment received using LA 92026: Transfer of Residual Grant Balances - OSP ONLY, SC762 Transfer of Residual Grant Balances - OSP ONLY.
- Decrease expenses on the Yale Designated Chart of Account (“COA”) provided by the department, less the portion of the F&A to be taken on the unspent balance.
If the Residual Balance is insufficient to recover the full F&A costs, the entire Residual Balance will be claimed as unrecovered F&A costs and no Residual Balance is returned to the PI.
If the remaining balance is greater than 25% of the total award amount received, additional F&A will be charged to reflect F&A recovery at the current full federally negotiated rate. This includes awards that may have originally been accepted at a lower F&A rate. Any exceptions must be approved by the Dean.
Note: If the Residual Balance transfer is greater than 25% of the total amount awarded, the Dean (or designee) must review/sign Form 1301 FR.01 Request to Transfer Residual Balance from Sponsored Awards to approve the transfer. A detailed budget identifying the reason for the large dollar variance must be included in the form. The 25% threshold is not applicable to Industry Clinical Trials (FD29).
For Industry Clinical Trials (FD29), once the Request to Transfer Residual Balance from Industry Clinical Trial Sponsored Award form is completed with the appropriate signatures and has been submitted,
The YSM Controller’s Office will:
1. Review completed Request to Transfer Residual Balance from Industry Clinical Trial Sponsored Awards form and any required attachments.
2. Transfer the Residual Balance to the account provided by the DBO or Business Support Unit via a manual journal entry once it has been determined by the YSM Controller’s Office that the transfer is appropriate.