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Fiscal Responsibilities on Grant and Contract Accounts


Office of Sponsored Programs


May 2, 2002

SUBJECT: Fiscal Responsibilities on Grant and Contract Accounts

SUPERSEDES: GIM 2 (November 1973)

The purpose of this memorandum is to reiterate and clarify University policy as to fiscal responsibilities on grant and contract accounts.

Grants and contracts are awarded to the University; not to individual investigators or departments. Acceptance of a grant or contract by the University signifies the University's willingness to assume responsibility for the administration of the funds in accordance with the terms specified by the awarding agency. This responsibility is shared within the institution by the investigator, his chairman or director, and dean, and the Grant and Contract Accounting Office. All help to see that the terms of the award are observed, and that expenditures during a given period are not in excess of funds awarded. The complementary roles are as follows:

  1. Principal Investigator

    1. Develops an over-all plan for the commitment of grant and contract funds, working with the authorized person(s) in the department or college and consulting other University officers as appropriate.

    2. Initiates expenditures to be charged against the grant or contract account.

    3. Supervises expenditure of grant or contract funds to assure:

      1. That funds are used only for purposes directly related to the activity supported.

      2. That expenditures are consistent with all special terms, conditions, or limitations that apply to expenditures under the particular grant or contract.

      3. That expenditures do not exceed the total funds authorized for a given period under the grant or contract. In many cases the grant or contract may also specify expenditure limits by budget category or line item.

    4. Assumes accountability for deficits or disallowances that occur under a grant or contract account.

  2. Chairman, Director, or Dean

    1. Establish systematic procedures in the college for supervision of grant and contract accounts.

    2. Provide reasonable coordinated administrative support for the management of grant or contract accounts.

    3. Consult with principal investigator concerning the resolution of a deficits or disallowances incurred on a grant or contract account and fix responsibility for settling the problem quickly.

  3. Grant and Contract Accounting Office

    1. Provides principal investigator with detailed monthly report of grant or contract expenditures and encumbrances.

    2. Provides principal investigator with information about any special terms, conditions, or limitations that apply to each grant or contract account.

    3. Consults on specific questions about the propriety of a given expenditure, on budget monitoring techniques, and on other such matters.

    4. Monitors certain types of grant -related transactions on a sampling basis to assure consistency with sponsor and University policies.

    5. Provides required fiscal report to sponsoring agencies.

If a deficit or disallowance occurs under a grant or contract account, the principal investigator, in consultation with his chairman or dean, is to advise the Grant and Contract Accounting Office as to the appropriate disposition. After-the-fact transfer of expenditures from one grant or contract account to another to correct a deficit or disallowance is usually not acceptable (see GIM 15). Especially stringent audit requirements apply to such transfers under Federally-funded grants and contracts.

The University has not budgeted separate funds for covering grant or contract deficits or disallowances so alternative sources must be found by the principal investigator; the departmental budget and the dean's reserve are among the possibilities. In the absence of specific advice, the Comptroller will charge the departmental budget.

Questions relating to accounting matters, or requests for assistance in the establishment of record-keeping systems for monitoring grant and contract expenditures, should be directed to the Grant and Contract Accounting Office, Extension 3-8454.