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Cost Overruns David L. Entin 12 Jan 1994 09:18 EST

I would like to hear from anyone this morning regarding the problem of "cost
overruns" or over expenditures on grants which have future non-competing
years.  While I understand that theoretically the PHS Grants Policy Manual
does not recognize cost overruns as legitimate and instead refers to them as
expenditures incurred under the provisions of Expanded Authority which allow
you to incur pre-budget period costs 90 days before the beginning of the budget
period, I would like to know if institutions are establishing limits for pi's
with regard to overspending their budgets.  For example, we are debating here
whether pi's should be limited to spend 125% of their budget before we start
rejecting po's, personnel forms, etc.  One concern expressed by our fiscal
group is that the institution is put at some financial risk when pre-budget
costs are incurred because you can not draw down on your letter of credit
prior to the awarding of the next non-competing year.

If anyone has any thoughts on this matter, please email or call.
Much thanks!

David L. Entin
UMASS Medical Center
(508) 856-2119