Jenny, I know of no institution in the country which treats F&A recoveries
as funds that "disappear" at the end of the FY.  However, due to the nature
of these funds, this is a decision that does rest with the institution.
But, I point out, the decision should be made by the highest executives,
conscious of what they are doing, rather than being left to the discretion
of accountants alone.

These funds are reimbursements to the institution for expenses already
made.  The institution may do with them whatever it wants.  If it chooses
to have the funds "expire" at the end of the FY, they merely revert to the
"cental pot" for reallocation.  In short, if there is FY reversion, at the
time of the reversion, the uses of the funds change.  The funds do not
disappear, they are merely redirected.

The interpretation that they are unrestricted and therefore MUST revert is
narrow minded, short sighted, and appears to subvert, unthinkingly, the
decision to use these funds in the way you describved, as an incentive to
seek additional external funding.

Accountants, like all of us, seek the easiest solution to anything.  Is is
easy to say, "Only gifts and sponsored programs are restricted; all else is
unrestrtcted, and reverts at the end of the FY."  It is an artifact of fund
accounting (which colleges and universities use, as opposed to cash flow
accounting) that resources unexpended at the end of the period revert to
the "pot" for allocation in the next FY without regard to the reasons for
the surplus.

Hope this gives you some rationalle to persuade the executive offices that
the current decision by accountants has not been thought through, and thus
the departments and others are being harmed, even though uninte3neionally.

Consider also the argument that the funds are allocated to the recipient,
who may have plans to accumulate funds for two or three years to make a big
acquisition.  The accountants' practice prevents this.  Is that an intended
outcome of mindlessly applying a "rule" which is merely a guideline?  As
everyone else does it differently, your accountants appear to be suffering
from tunnel vision.

However, there is no external standard.  What they are doing is not
"wrong", it is just another way of doing things which seems to be for their
convenience rather than accomplishing what seems to be the insitution's goal.

Chuck

At 05:45 PM 5/2/99 -0400, you wrote:
>I am having a debate with our Business Office on the use of recovered
indirect
>cost.  We give percentages to the PI, his or her department and also use a
>percentage for matching funds for other grants.  Our Business Office insists
>that we must spend this money on a fiscal year basis.  They are saying
that it
>comes in as unrestricted money and therefore cannot be rolled over.  I do not
>agree with this opinion but, since I am not an accountant, I would like to
>hear from some others about this matter.  I would appreciate knowing the
>policy at your institution.  I'll post a summary to the list if you want to
>reply directly to me.
>
>Thank you so much!!
>
>
>Jenny H. Bradley
>Director of Academic Grants and Foundation Relations
>Roanoke College
>221 College Lane
>Salem, VA   24153
>
>(540)375-2409
>(540)375-2026 (fax)
>
>xxxxxx@roanoke.edu
>
>Jenny H. Bradley
>Director of Academic Grants & Foundation Relations
>Roanoke College
>221 College Lane
>Salem, VA  24153
>(540) 375-2409
>(540) 375-2026 (fax)
>xxxxxx@roanoke.edu
>
>
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Herbert B. Chermside, CRA
Director, Sponsored Programs Administration
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Express Delivery Only:
 Sanger Hall, Rm. 1-073
 11th & Marshall Streets
 Richmond, VA  23219
Voice:  804-828-6772
Fax     804-828-2521
OFFICE e-mail   xxxxxx@VCU.EDU
Personal e-mail xxxxxx@vcu.edu
http://views.vcu.edu/views/ospa/

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