To Janet's wise advice I would add that F&A reimbursement is earned only as
direct costs are generated. This is why a change in expenditure from
budget may change the F&A earnable. With the budget flexibility offered by
most sponsors the total F&A earned may depart from that budgeted with very
little institutional activity.
Distributing "earned F&A reimbursement" prior to earning it can put the
institution in a bind; you have spent (or at least budgeted for spending)
before the revenue is earned. (Don't worry about the collection, your
accountants do that when earned.) My institution distributes F&A earned
monthly based on the earnings for the month. I know of others that do it
only after closeout of the project, but they are small institutions with
(or had at the time the policy was established) less robust accounting
systems, or did not have a "standard formula" for distribution.
"Taking" F&A from the project budget the PI has would be very confusing
precisely because earned may easily depart from budgeted. Obviously you do
not want PI to "spend" funds needed for F&A. My institution requires the
PI to manage to the bottom line, accounting for F&A actualy earned/earnable.
Chuck
At 05:09 PM 3/20/2003 -0500, Hahn, Janet M wrote:
>We budget F&A upfront. Expenditures to F&A line item are entered and
>distributed quarterly.
>Janet Hahn
>-----Original Message-----
>From: Smith,Lois M [mailto:xxxxxx@UAKRON.EDU]
>Sent: Thursday, March 20, 2003 4:58 PM
>To: xxxxxx@HRINET.ORG
>Subject: [RESADM-L] Indirect Costs Redistributions
>
>Hello,
>
>This is to universities that take a portion of the indirect costs (F & A)
>generated and redistribute a share back to other parts of the university
>such as Principle Investigators, Colleges, Departments. Do you give it
>back only as you generate it? Or do you determine potential indirect
>costs at the beginning of the grant and distribute on that assumed
>number. And I guess the odd question is do you take all the indirect
>costs from the grant right up front and leave the PI with only the direct
>costs?
>I've had a few odd scenarios presented lately and would like to get a
>sense if we're in the mainstream or way out of it.
>Thanks for the help, Lois
>
>
>
>Lois Smith
>Assoc. Controller, Sponsored Programs
>The University of Akron
>330-972-6563
>xxxxxx@uakron.edu
>
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Herbert B. Chermside, CRA
Director, Sponsored Programs Administration
Virginia Commonwealth University
PO BOX 980568
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Express Delivery Only:
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