Deficit Transfers on Grants/Contracts without Continuation Accounts

A grant or a contract is in deficit when total expenditures exceed the authorized award.
Possible reasons for deficits

• Delay in continuation or supplemental award set-up
• Unallowable costs
• Over-expenditures in allowable costs
• Expenditures exceeding cash receipts from sponsor - sponsor fails to reimburse UW for specific expenditures on budgets that require invoices
• Unmet cost share - sponsor requires reduction of award when cost-sharing pledges are not met
• Annual spending restrictions

Deficits must be transferred to an appropriate non-federal budget in order for the budget that is in deficit to be closed.

Process Overview

• Department monitors individual grants/contracts for deficits (expenditures that exceed the award amount) by reviewing Budget Activity Reports (BARs) & Budget Status Reports (BSRs) or My Financial Desktop transactions on a regular basis.
• Grant and Contract Accounting (GCA) assists departments in monitoring & reporting deficits by sending
• Quarterly Deficit Report, list of all budgets which have deficits, to department chair
• Notice of Expiration (NOE) letters to PI/fiscal specialists at expiration of each grant/contract
• follow-up communications to PI/fiscal specialists via e-mail or memo during budget closing process
• Department prepares Deficit Transfer form to transfer deficit to an appropriate non-federal budget:
• GCA prepares deficit transfer Journal Voucher (JV) upon receipt of properly completed Deficit Transfer form.

PI/staff Procedures

1. The department answers all the questions on the Notice of Expiration Letter (NOE)
2. After answering questions in step 1, department determines whether grant/contract will have a deficit
3. For budgets with:
• a deficit and continuation account, follow instructions on Deficit Continuation Budget section of the Closing Types page
• a deficit but no continuation account, prepare a Deficit Transfer form by taking the following steps:
• Go to the Deficit Transfer form
• Fill out "Prepared By" section.
• Fill out the “Deficit Transfer” section.
• Select an appropriate non-federal budget to transfer the deficit to from the following list:
1. State budgets (01-XXXX - 10-XXXX)
2. Research Cost Recovery (RCR) budgets (74-XXXX - 75-XXXX)
3. Fixed Price Surplus budgets (budget type 05/34)
4. Clinical Income budget (budget type 05/52)
5. Royalty budgets (budget type 05/57)
6. Gifts (budget type 06/XX) - department must ensure consistency with donor's intent
• Fill out the Deficit Type by identifying if this is a final deficit or an interim deficit.
• Note: when the final deficit box is checked GCA will put the budget in status 3.
• Obtain authorized signature from a person who has signature authority on the budget receiving the deficit.
• Return the completed form to GCA box 351122.

Forms

Responding to the Notice of Expiration Letter (NOE)
Deficit transfer form

Contacts

Grant and Contract Accounting
A Department of Financial Management
gcaques@u.washington.edu
Modified: May 5, 2009