1301 PR.05 Residual Balance Fund Transfers

    Revision Date: 
    May 15, 2023

    Contents

    1.      Overview

    2.      Purpose

    3.      Definitions

    4.      Residual Balance Transfer Process

    1. Overview

    This document establishes procedures for requesting the transfer of residual balance funds remaining on, for example, 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.

    2. Purpose

    The purpose of this procedure is to establish a process that:

    • provides access to residual funds remaining on affected sponsored awards;
    • provides a consistent method for obtaining approval for the transfer of residual funds; and
    • 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 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’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.

    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 on set fees for tests or specific milestones as services are provided.

    Residual Balance

    The balance of funds when the agreement permits Yale to retain the funds after the work is completed.  If the funding provided by the sponsor is not fully expended once all appropriate expenses (e.g., salary commensurate with the effort devoted) have been charged to the award, a residual balance will exist.  Residual balances can occur on a grant or contract (including clinical trial 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 the bulleted information below using 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 Form 1301 FR.01 Request to Transfer Residual Balance from Sponsored Awards.  Consult the YSM Controller’s webpage for process guidance, and submit to the YSM Controller’s Office. 

    Note: Large balances may require further justification and explanation.

    PIs and DBOs/Business Support Units need to provide documentation for and/or confirm the following:

    • All work has been 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 financial/technical reports and deliverables have been submitted to the sponsor.
    • All invoices for the project have been submitted and all payments received by Yale.
    • All applicable expenditures have been charged to the award and effort of PI and key personnel for this award is accurately charged.
    • An appropriate unrestricted account exists to which the balance would be transferred.  Balances must not be transferred to a sponsored account or a gift.

    In addition, for Industry Clinical Trials (FD29):

    • The Payroll Costing by Employee Report detail for the PI.
    • The OnCore Budget Summary Report and the Clinical Trial Financial Summary Report. 
    • Signature of Dean (or designee) approving the residual balance transfer if greater than 25% of the total amount awarded.

    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):

    A. SPFA will:

    1. For SPFA-managed awards (FD02/FD28) (i.e., federal and non-federal grants and contracts), confirm the award is expired, 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 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 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).

    B. YSM Finance will:

    1. For Industry Clinical Trials (FD29), review the Non-Sponsored Receivables Aging by Cost Center – Yale report to confirm that there are no open invoices.  Confirm that the income and expenses justify the residual balance for Industry Clinical Trial award.  It is imperative that PI salary representing commensurate effort is charged to the award.  The department should attach the PI’s payroll costing detail for the full period of the award to ensure effort is properly accounted for.

    2. Transfer the residual balance to the account provided by the DBO or Business Support Unit once it has been determined by YSM that the transfer is appropriate.