Moving Uncollectible Costs to Non- Sponsored Programs

Introduction

Uncollectible costs must be removed from sponsored projects and onto non-sponsored programs. The non-sponsored program to be used depends upon the function code of the sponsored project from which the costs are being moved and whether Sponsored Financial Reporting (SFR) or the department is processing the cost transfer.

Removing Costs Associated with Uncollectible Accounts Receivable

Department Instructions:

• Identify the uncollectible costs and process the appropriate cost transfer (retro distribution for payroll expenses and journal entry for non-payroll expenses) to remove the uncollectible costs from the sponsored project to a non-sponsored program under the appropriate non-sponsored function code.
• Notify SFR when costs should not be removed from the sponsored project because the activity is an allowable pre-award cost, there is a rebudgeting request that is in process, or there are other circumstances.

SFR Instructions:

• Determine if the department has transferred the uncollectible costs from the sponsored project to a non-sponsored program.
• If the department has not removed the uncollectible costs, prepare the appropriate cost transfer (retro distribution for payroll expenses and journal entry for non-payroll expenses) to remove the uncollectible costs from the sponsored project to one of the following default programs with an appropriate function code:
  • The default programs are set up centrally through the annual budgeting process for all DeptIDs that historically have conducted, or may reasonably be expected to conduct, sponsored activity.

• Departments should not use default programs.

  Programs to use for specific Funds

  FUND	DEPTID	PROGRAM
  1025	Project DeptID	UNC01 = 1110 Research Non-sponsored
  1025	Project DeptID	UNC02 = 2110 Public Service Non-sponsored
  1025	Project DeptID	UNC03 = 0320 Instruction Non-sponsored

• Charge the department a fee for removing the uncollectible costs.

Budget Office Instructions:

• Regularly monitor deficits in the default UNC0X programs.
• Follow up with departments that have not funded the default UNC0X programs.

Subsequent Payment of Uncollectible Accounts Receivable

SFR Instructions:

• If the uncollectible accounts receivable is subsequently collected from the sponsor, apply the revenue to the open receivable on the sponsored project.
• If there is no open receivable, apply the revenue to the non-sponsored/default program where the uncollectible costs were moved.