tank_1_.jpgThese activities recognize and comply with the respective requirements of our sponsors, Stevens Institute of Technology (SIT) Policies and Procedures, and SIT Division of Finance.
Typically, billings and payments for Federal awards are handled through a Letter of Credit (LOC) arrangement. This is a semi-automated process and is managed by the Office of Sponsored Research (OSR). The frequency of draws (billings) is dependent upon the volume of activity occurring between SIT and the sponsor and payments are assigned to the correct project accounts strings by the FRS accounting system.
In rare circumstances a Federal sponsor requires a manual bill as specified in the Award Notice, or the contract. It is also the case that many other types of sponsors require manual billings, including sponsors who have issued a subcontract to SIT on Federal or other flow-through funding. All billing activity will be handled through OSR
As referenced above, payments from most Federal sponsors are handled through a Letter of Credit process and electronic transfer and applied to the correct project account by OSR. The frequency of payments from other types of sponsors, or relationships defined by special circumstances, will be identified in the Notice of Grant Award, or the contract award document At no time should a SIT employee directly receive payment from a sponsor. If a payment is mistakenly directed to an employee, he/she should complete a “Contracts/Grants Deposit Form” and take the payment to the Bursar’s Office.
As financial activity such as sponsor billings, remittances, Letter of Credit (LOC) drawdowns, and electronic fund transfers post to a project account, a picture begins to emerge that shows its financial health. Generally, Federal sponsors with whom we have LOC drawdown authority represent a fairly straightforward method of award maintenance, e.g., individual project account expenditures are reviewed and approved and, if correct, the corresponding funds are drawn down from the sponsor and then applied to the project account.
As previously mentioned, some Federal sponsors and types of Federal awards, as well as many non-Federal sponsors, require a different kind of maintenance and monitoring. Sponsor bills are prepared and submitted, sponsors remit payments to identified lockboxes, the lockbox is cleared and payments are applied to the correct project account. This kind of maintenance builds an image of SIT’s research-related accounts receivable position with these sponsors.
OSR is the central business function vested with responsibility for these activities as they relate to research and sponsored projects (L4 and L5) and maintains an attitude of diligence as it reports, maintains, and manages the financial tasks for all sponsored award project accounts. Questions should be directed to 201.216.5710.
Financial reconciliation and reporting are critical elements of every award received at SIT. To sponsors, prudent fiscal management is an indication that the organization understands and follows commonly accepted accounting practices and that reliance can be vested in the recipient to act as a “good steward” on the sponsor’s behalf. In the case of Federal sponsors, there are specific requirements that govern the management and reporting of award funds. Failure to observe these requirements can result in serious negative consequences, including reduction in funding levels, interruption/suspension of an award for individual PIs, institutional interruption of Federal support and even fines or other penalties. Specific directions regarding federal expectations as they pertain to the maintenance and reporting of sponsored projects are found in Circular A-110 at:
C21b, C21b(3), C21b(4) – “Recipients’ financial management systems shall provide for the following…effective control over and accountability for all funds, property and other assets…[and] comparison of outlays with budget amounts for each award…”
Timely reconciliation of budget and project periods for sponsored projects is an important factor in demonstrating our willingness and ability to efficiently manage Federal funds. This is regarded as a collaborative effort between the OSR post-award specialist, the OSR Accountant, the PI and department personnel; however, the Financial Status Reports (FSRs) themselves are prepared and submitted by OSR.
An important part of this collaboration is sharing information. Sometimes the PI or department personnel will receive financial communication directly from the sponsor. If this occurs, all financial information should be shared/forwarded to the appropriate OSR Accountant. For example, if updated reporting forms are sent to the PI/department personnel instead of the central business office (OSR), preparation and submission of FSRs on outdated forms will usually result in the reports being returned and a delay in acceptance of the required report.
Most sponsors don’t require a PI signature on financial reports, but it is the practice at SIT to send a copy of the report to the PI for his/her review and approval prior to submitting it to the sponsor. We request that the PI/department personnel send concurrence or questions via email within 10 days. If there are questions or items on the report that require discussion or clarification, please contact your OSR Accountant at 201.216.5710. If OSR does not receive acknowledgement or other communication from the PI/department personnel within 10 days the FSR will be submitted to the sponsor in order to meet the required deadline.