Manage your Money
Interest Income on Grants, Contracts, and Gifts (Restricted Fund Budgets)
Included on this page:
Description/Definition
The UW (University of Washington) deposits all cash received for
restricted-fund (grant, contract, and gift) budgets and consolidated
endowment-fund budgets into UW bank accounts. This cash subsequently earns
interest and the UW may also invest it. The UW uses the term "interest income"
to refer to the income earned from both bank interest and investments. This
page is only concerned with the interest earned on restricted-fund budgets.
Departments should address questions concerning the interest earned on
consolidated endowment funds and other gift accounts, to the UW Treasury
office.
The UW Treasury office also administers the policy for the distribution of
interest income earned by restricted fund budgets. Those classes of
restricted-fund budgets that currently receive interest-income include:
- Non-federal grant budgets, where the sponsor requires that the UW credit
interest income to the budget.
- Non-federal contract budgets, where the sponsor requires that the UW
credit interest income to the budget.
Process Overview
Office of Sponsored Programs (OSP) notifies Grant and Contract Accounting (GCA)
to activate accounting flag four (interest income) on eligible grants and
contracts by means of an instruction in the "remarks" section of the Notice to
Establish Account (NEA). GCA activates accounting flag four in the Financial
Accounting System (FAS) for eligible grant-and-contract budgets and for all
gift budgets. This controls automatic FAS interest-income computations. The UW
Executive Vice President sets the rates that are the basis for these
computations. Every year, after 05/31, FAS performs an automatic
computation to determine how much interest income the University will
distribute to the budgets eligible to receive interest-income. The applicable
rate is multiplied by the average monthly cash balance of the budget for the
number of months the budget was active during the period 06/01 - 05/31, and the
interest is posted by journal voucher in the month of June.
PI/Department Responsibilities
- Contact the Treasury Office if you have any questions about the current interest rates applied to eligible grant, contract, or gift budgets.
- Contact OSP if you believe that a grant or contract budget is eligible to receive interest income, but the Notice to Establish Account (NEA) does not so indicate and the Budget Number Information Screen (Action 4 in OFIS) does not reference accounting flag four.
- Contact GCA (New Accounts) if you believe that:
- grant or contract budget is eligible to receive interest
income and the NEA does so indicate, but
- The Budget Number Information Screen (Action 4 in OFIS) does
not reference accounting flag four.
- Check the June BARs for the annual interest-income posting on all departmental budgets eligible to receive this credit.
Reference
Administrative Policy Statement
36.2 - Gift Processing Guidelines
Contacts
Treasury Office, (206) 543-3524;
invest@u.washington.edu
Office of Sponsored Programs (206) 543-4043;
osp@u.washington.edu
GCA, Comprehensive Reports, Receipts & Reconciliation, (206) 543-8941 or GCA Team Lookup
