Uncollectible costs must be removed from sponsored projects and onto non-sponsored programs according to the Administrative Policy: Processing Accounting Transactions or within the timeframe allowed for final sponsor financial report and/or invoice submission, whichever is earlier. 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
- Identify the uncollectible costs and process the appropriate cost transfer (retro for payroll expenses and journal entry for non-payroll expenses) to remove the uncollectible costs from the sponsored project to a departmental non-sponsored program under the appropriate non-sponsored function code.
- Notify SFR when costs should not be removed from the sponsored project because they are allowable pre-award costs, there is a re-budgeting request that is in process, or there are other similar circumstances.
- 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 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 according to the 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.
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:
- On an on-going basis, monitor deficits in the default UNC0X programs.
- Follow up with units that have not funded the default UNC0X programs.
Subsequent Payment of Uncollectible Accounts Receivable
- 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.