6-400 Responsibility for Financial Management and Control of Project Funds

6-410 Responsibility Attendant to Delegated Expenditure Authority

The Accounting Manual, Chapter D-224-17, "Delegation of Authority--Signature Authorization," Section II. B., "Responsibility Attendant to Delegated Authority," states:

. . . . individuals authorized to expend funds from a Department's budget must comply with all the applicable policies, regulatory requirements, laws, regulations, and special restrictions on the use of those funds. For example, expenditure of State General Fund funds budgeted for the Engineering Department is contingent upon compliance with certain requirements embodied in the control language of the State Appropriation Act. Similarly, expenditures for budgets that include Federal grants must comply with any applicable Federal requirements contained in Office of Management and Budget Circulars A-21, Cost Principles for Educational Institutions, [now published as 2 CFR 220] and A-110, Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations [2 CFR 215]. Expenditures of a budget funded from endowments must conform to the terms and conditions of the bequest(s) involved. For extramural awards, funds generally must be expended according to the terms of the award, the budget for the project as approved by the sponsor, and any other applicable sponsor requirements.

Any unauthorized deviations from the approved award budget or award terms and conditions may subject the campus to risk of audit disallowance.

6-420 Summary of Standards for Financial Management

Consistent with 6-410, the following list summarizes the basic standards which must be met to insure that extramural funds are properly managed:

  1. Funds must be expended consistent with:
    1. The purpose for which the award is made;
    2. The terms of the budget as approved by the sponsor;
    3. Any applicable sponsor requirements;
    4. Any applicable federal government-wide requirements such as OMB Circulars A-21, Cost Principles for Educational Institutions, [now published as 2 CFR 220] and A- 110, Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations [2 CFR 215].
    5. University policies and procedures;
  2. Fiscal transactions must be completed in conformance with internal control standards and supporting documentation requirements. (See Chapter 7 for references to Accounting Manual sections which detail control standards and documentation requirements for different types of expenditures.)
  3. Fiscal records and reports must be prepared and submitted in a timely, accurate, and complete manner.

6-430 Summary of Financial Management Duties

The general financial management duties which must be assumed by the University in administration of contract and grant awards include:

  1. Preparation of the proposed budget according to University and sponsor requirements;
  2. Certification of current cost and pricing data when required;
  3. Acceptance of the agreement;
  4. Establishment of the approved award budget;
  5. Expenditure of funds consistent with agreement, sponsor, and University policies;
  6. Procurement of equipment and supplies and execution of subcontracts in accordance with sponsor and University policies;
  7. Recording of expenditures in the appropriate account in the month the expenditure occurs to enable accurate, current, and complete disclosure of financial results;
  8. Preparation and submission in a timely manner of all required interim and final fiscal reports, including cost sharing, if any;
  9. Preparation and submission in a timely manner of all required technical reports or other deliverables where required for payment;
  10. Avoidance of cost over-runs and unallowable cost-transfers;
  11. Identification of the need for revised budgets and/or need for additional funds;
  12. Negotiation of revised and/or increased budget in order to secure full cost recovery;
  13. Negotiation of advance payments provisions, including the establishment of letters of credit;
  14. Timely invoicing and monitoring for prompt payment when advance payments cannot be negotiated.
  15. Prompt completion of project close-out; and
  16. When warranted, submission of requests for waiver or exceptions to established University costing and other policies.

6-440 Responsibilities of the Principal Investigator

The Principal Investigator has primary responsibility for financial management and control of project funds in accordance with University and sponsor policies and procedures. The campus Controller is also responsible for many of the management and control responsibilities listed in 6-430 as well as those listed in 6-460. Some of the responsibilities are shared with others, including the Contracts and Grants Officer, Department Chair and College Dean. However, it is the Principal Investigator who is involved in all aspects of award administration.

6-450 Responsibilities of Department Chair (or Equivalent Officers)

The Academic Personnel Manual (APM), Section 245, "Duties of Department Chairperson (or Equivalent Officers)" divides the Department Chair duties into two categories: leader of the department and administrator of the department. The administrative duties which are directly related to the financial management and administration of extramural funds, as provided in APM-245, Appendix A, include the following:

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5. To prepare the budget and administer the financial affairs of the department, in accord with University procedures

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8. To be responsible for the custody and authorized use of University property charged to the department, and for assigning departmental space and facilities to authorized activities in accordance with University policy and campus rules and regulations

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10. To maintain records and prepare reports in accord with University procedures.

6-460 Responsibilities of Campus Controllers

The campus Controller also has responsibility for many of the financial management duties listed in 6-430. The missions, goals, and objectives of campus accounting are outlined in Accounting Manual, A-000-4, "University Accounting Program," Section III. C. 1. Specifically, among other things, the campus Accounting Office is responsible for:

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b) Monitoring all financial and budgetary transactions to ensure compliance with University and campus policies and procedures, with provisions of governing laws and related statutory regulations, with the terms and conditions prescribed by external funding sources, and with generally accepted accounting principles. This includes administering all funds to ensure that expenditures are kept within amounts appropriated and that estimates of revenue are adjusted as required.

c) Preparing and distributing most campus financial reports and statements, including those for the total campus as well as those for Federal, State, and gift funds and for auxiliary and service enterprises, and preparing claims against funding agencies for reimbursement of expenditures incurred.

d) Maintaining the campus sections of the General Ledger, the official book of accounts, and other required campus accounting records. This includes assigning account numbers, processing budgetary, financial, and lien entries to properly reflect the transactions of campus funds, ensuring that subsidiary ledger records maintained outside of the accounting office are reconciled to control accounts, and closing the General Ledger at fiscal year end.