1301 PR.05 Residual Balance Fund Transfers

Revision Date: 
June 30, 2017

Contents

1.      Overview

2.      Purpose

3.      Definitions

4.      Definition: Residual Balance

5.      Residual Balance – Process

This document establishes procedures for requesting the transfer of residual balance funds remaining on fixed price, fee-for-service, or fixed fee agreements such as clinical trial awards after satisfactory completion of the work and submission of all required deliverables.

The purpose of this procedure is to establish a process that (1) provides access to residual funds remaining on sponsored awards that are fixed price, fee-for-service, or fixed fee agreements such as clinical trials, (2) provides a consistent method for obtaining approval for the transfer of residual funds, and (3) ensures that the transfer of residual funds to non-sponsored accounts are not prohibited by any requirements provided by the original sponsor.

3. Definitions         

Fixed Price

A sponsored agreement or contract that is not subject to any adjustment on the basis of the Yale’s 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. 

Fee-for-Service

A sponsored agreement or contract in which the sponsor agrees to pay an upfront, predetermined price, for agreed upon services or individual tasks performed.

Fixed Fee Agreements (e.g., Clinical Trials)

The agreed upon cost of individual activities identified in a contract.  The most common uses of fixed fee activities are those associated with a clinical trial where the sponsor and Yale agree to a per-patient capitation payment or on set fees for tests or specific milestones as services are provided. 

The balance of funds when the agreement permits Yale to retain the funds after the work is completed.  These types of agreements may include the following activities: (1) service or product delivery in fixed payment increments, (2) deliverables or milestone completion, or (3) patient enrollment or capitation payments.  If the funding provided by the sponsor is not fully expended after all appropriate expenses have been accounted for, a residual balance will exist.

Residual balances can occur on a grant, or contract (including clinical trial and service agreements). 

A.   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 a non-sponsored account and used to further their 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 should be noted, if requesting an extension for a clinical trial agreement ensure that the HIC approval date(s), at a minimum, agree with the period of the contract.  

In order to initiate the Residual Balance Transfer process, lead administrators must submit the information below to OSP or YSM Finance for Industry Clinical Trials and Clinical Contractual Agreements prior to the review and approval of the transfer.  Large balances may require further justification.  It is imperative that PI salary representing his/her effort must be charged to the award.

Specifically, PIs and department business offices need to provide and/or confirm the following:

  • All work was completed.
  • No outstanding work activities or deliverables remain open or in question by the sponsor (and expenses are in accordance with the terms and conditions of the agreement and the negotiated budget).
  • All required technical reports were received and/or accepted by the sponsor.
  • All invoices/financial reports for the project were submitted and all payments have been received byYale.
  • All applicable expenditures have been charged to the award. For Industry Clinical Trials the OnCore Budget Summary Report and Clinical Trial Financial Summary – Yale Reportmust be verified to justify residual balances.
  • An appropriate non-sponsored account exists to which the balance should be transferred.
  • Signature of Dean or Designee approving the residual balance transfer if greater than 25% of the total amount awarded.

DBOs and PIs must use the Request to Transfer Residual Balance from Sponsored Awards form (1301 FR.01) in order to facilitate and expedite the residual transfer process.

B.   Once the form is completed and given to the lead administrator, the Lead Administrator forwards the completed form/letter request with appropriate signatures along with the signed financial status report (FSR), if applicable to OSP or YSM Finance depending on the type of award for final review and transfer of funds.

OSP will:

A.   Confirm that the award end date has passed; the residual transfer request is appropriately completed and signed, and the University has been reimbursed for the work completed.  Prior to approving the request, OSP will 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 award may be categorized into one of the three award classifications defined above, or the awarding document does not provide adequate instructions:

  • OSP Financial Management and Award Manager(s) will consult with each other regarding interpretation of the terms and conditions.  If still unclear, a request to retain the residual balance (for research purposes) is sent 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. 
  • In the event that the sponsor requests the residual funds be returned, the University is obligated to return the applicable balance to the sponsor.  OSP 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 time period, the University retains the balance. 

B.   Transfer the direct costs less the portion of F&A to be taken on the unspent balance of the award once it is determined that Yale may retain the residual funds. 

Any remaining balance, less the recovered F&A costs, will then be transferred to the account provided by the PI/DBO, and the award is subsequently closed.  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. 

Note: If the award was accepted at less than the full F&A cost rate and the award has a remaining balance of greater than 25%, the residual funds will be retroactively adjusted to reflect a full applicable F&A recovery. 

YSM Finance will:

A.   Confirm that the income and expenses on the Clinical Trial Financial Summary – Yale and the expenses on the OnCore Budget Summary Report justify the residual balance for Clinical Trial awards.  It is imperative that PI salary representing commensurate effort is charged to the award.  If the PI has effort committed on a non-clinical sponsored award, attach the payroll costing detail from the Payroll Costing By Employee – Yale (process the report for the full period of the award) for the PI so that a quality assurance review can be performed to ensure effort is properly accounted for.

B.   Transfer the residual balance to the account provided by the DBO once it has been determined by YSM that the transfer is appropriate.

Reviewed for Workday Purposes on 6/26/2017.