Sponsored Accounting

Information on the Institute’s cost sharing policy is available from the Office of Sponsored Programs.

Reasons to Move Revenues or Expenses

  • Correcting a G/L account
  • Correcting a cost object
  • You want to transfer funds to support the activity on another cost object
  • Some of your costs should be shared with another cost object
  • Some of your revenues should be shared with another cost object

Correcting Errors

Note: These instructions assume the original transaction was a debit. If it was a credit, do the opposite of what is specified below.

  • Wrong G/L account: Credit the original cost object and G/L account; debit the correct G/L account on the same cost object.
  • Wrong cost object: Using the original G/L account, credit the wrong cost object and debit the correct one.

Correcting Errors on WBS

When correcting errors on sponsored WBS elements, special rules apply. Detailed explanations must be provided, and if corrections are not made promptly, additional documentation must be provided to the Sponsored Projects Accounting group (SPNA).

Moving Funds

  • Use a Transfer In/Transfer Out G/L account pair to move funds
  • Transfers are allowed among all cost object types (with special rules for WBS)
  • Budget Office approval is required for transfers to or from cost centers
  • Provost Office approval is required for transfers between principal (Pool A) and expendable funds

Transfer G/L Pairs

Regular Transfers

800325 Transfer In

800326 Transfer Out

May be used by any DLC and may be combined with principal transfers

Principal Transfers

800010

800011

For moving principal (Pool A) or for transfers between principal and expendable (use with 800325 and 800326)

Draft Transfers

800705

800706

Used by Budget Office only

Space Change Transfers

800709

800710

Transfers originated by Budget Office only

Under-recovery Transfers

800703

800704

To fund under-recovery. These entries are done by the Sponsored Accounting Group (SPNA) only.

Cost-sharing Transfers

800701

800702

To fund cost sharing. These entries are also done only by SPNA.

Expense Transfers

800707

800708

Used only by certain administrative units with special cost analysis requirements

 

Cost Centers

  • Close out any open purchase orders and requisitions
  • Contact your budget officer to move any budgeted amounts out of the cost center, and to request that the cost center be closed

Fund and Other Orders

  • Make sure the “cumulative” balance is zero
  • Contact vpf-cost-objects@mit.edu to request a close out
  • The Sponsored Projects Accounting group (SPNA) can assist in resolving problems with EB and F&A caused by changes in rates from year to year.

WBS (Funds, Research, and Other)

  • SPNA audits each sponsored project after the project end date
  • When the audit is complete, SPNA contacts department staff with any findings by email or phone
  • SPNA makes the necessary entries to correct for any audit findings (F&A adjustments, post term charges, pre-effective date charges, etc.)
  • SPNA submits the final financial report to the sponsor and closes out the project (term code 3, mail code 5)
  • Please contact Sponsored Accounting directly at wbscloseout@mit.edu

Clearing WBS Overruns

  • Overruns must be cleared to a departmental or discretionary cost object using G/L 420314 (recorded project overrun)
  • Overruns may not be transferred to other research WBS elements
  • Overruns will be charged automatically to a department cost center approximately 30 days after initial contact with department personnel if no response is given to SPNA

The timely closeout of Sponsored Accounts is critical to the Institute's compliance with the terms of sponsored agreements and to carrying out best practices in sponsored accounts management.

Sponsored Accounting follows a standard closeout notification process to ensure consistency in the timing and presentation of closeout information. The standard process was designed to provide departments, labs, and centers (DLCs) with clear guidelines and timelines for addressing items requiring attention prior to closing.

Below are the steps in the MIT closeout notification process:

Standard Closeout Notifications and Actions

  1. Sponsored Accounting audits account after account expires.
  2. Sponsored Accounting emails DLC staff members and details actions that are required before closeout. Note: Sponsored Accounting will make every attempt to send this initial email within thirty days after an account has expired. View sample of email
  3. DLCs have 10 business days to respond to this initial email.
  4. If there is no response to the initial email, Sponsored Accounting sends a second email to DLC staff members indicating that the account will be closed in five (5) business days. View sample of email (PDF)
  5. If there is no response from the DLC within five (5) business days, Sponsored Accounting allocates any outstanding expenses to the DLC general or discretionary account. Prior to taking this action, Sponsored Accounting notifies the DLC in advance that the charge will be processed.
  6. Once all issues are resolved, a Sponsored Accounting representative prepares the necessary documents and works with the Office of Sponsored Programs (OSP) and the sponsor to complete the closeout process.

MIT Commitment to Compliance

The standard closeout notification process supports MIT's ongoing commitment to compliance with sponsor contractual requirements. Final reports are generally due 90 days after the end of a sponsored project, and Sponsored Accounting is committed to achieving 100% timely closeouts.

Cost Reimbursable Billing

Cost reimbursable billing is based on actual project costs (direct and indirect) incurred up to the billing date within a maximum authorized amount.

Cost reimbursable billing for federal government sponsorships is conducted in accordance with the OMB Uniform Guidance, which replaces OMB Circular A-21. Other sponsors may also require cost reimbursable billing.

Cost reimbursable billing in SAP requires a sales order master for the project being billed. The sales order is used to summarize the project costs and produce a bill.

MIT cost reimbursable agreements have limited opportunity for being over funded by the sponsor. MIT’s cost reimbursable billing process creates bills at the project level. Project bills are only generated when incurred costs are greater than payments to date. This ensures that MIT is not billing cost reimbursable agreements if there is a credit balance on the project.

In addition, the GL61 Report is run each month for Department of Defense (DOD) Contracts and Grants. This report is reviewed for credit balances on any government cost reimbursable contracts and grants. If any project has a credit balance at the end of the agreement, MIT must be issue a repayment check with the final report by the agreement/contracted deadline (final reports and, if applicable, reimbursement checks are due within 90 days of the end date for grants and one year of the end date for contracts).

Schedule Billing

Schedule billing is necessary when a sponsor requires MIT to submit a bill for a fixed amount on a periodic basis. This type of billing is not based on actual costs of the project.

Schedule billing in SAP requires a sales contract master for each sponsor being billed. The contract includes important information such as the specific amounts and dates required for billing.

In case of federal sponsors whose projects qualify for the Federal Advance Payment Pool, advance payments may be obtained through the letter of credit business process. While no sponsor billing may be required for these projects, an internal bill is created to record revenues for the projects, based on the Institute’s revenue recognition criteria.

Letter of Credit / Request for an Advance / Cost Reimbursement

Most of the money received for the Federal Government grants and contracts is by letter of credit. Other methods of receiving money for Federal Government grants and contracts are by request for an advance and cost reimbursement.

  • Letter of credit is a process used to request money for a group of accounts. At least once a week, there is a comparison of the cash on hand and the estimated expenses. Based on the result, a request is made to cover the difference.
  • Request for an advance is a process used to get money for a particular account. At least once a month Form SF 270 is submitted requesting the difference between the cash on hand and expenses for the month.
  • Cost reimbursement is a process used to get money for a particular account based on actual expenses. At least once a month, Form 1034 is submitted requesting reimbursement for the actual expenses on an account. This process is usually used for contracts that are not covered by letter of credit.

Interim Financial Reporting

Copies of any cost sharing reports prepared and submitted to the sponsor by the DLC should be provided to OSP and VPF.

In accordance with sponsor financial reporting requirements, VPF Sponsored Accounting will report cost sharing captured in MIT cost sharing cost objects, cost sharing of subrecipients and cost sharing for which documentation has been provided by DLCs. However, submission of interim financial reports will not be delayed awaiting documentation of cost sharing.

VPF will inform OSP if they perceive the project is falling behind in meeting its cost sharing obligation or if documentation of non-funded cost sharing does not conform to cost sharing guidelines.

Final Financial Reporting

MIT must have compiled documentation of fulfillment of the full cost sharing obligation by the end date of the award.

VPF Sponsored Projects Accounting will conduct the final audit of the cost sharing WBS, applying the cost principles and terms of the award sponsor. VPF will also review cost sharing documentation provided by the DLC for RA tuition subsidies and non-MIT funded cost sharing to determine the appropriateness of the valuation and adequacy of the documentation. VPF incorporates any special cost sharing terms described in Coeus coded descriptors (under Other Approvals) and cost sharing comments in their audit.

VPF will contact OSP for consultation if they have any questions on Coeus data, if the Federal Award was not fully expended, if final adjustments to unrecovered F&A, used as cost sharing, are necessary or if they feel the DLC has not fulfilled the cost sharing obligation described in Coeus. The final closeout process and submission of the final financial report will be delayed until documentation of the full cost sharing commitment has been provided and audited.

VPF will prepare and submit to the OSP Contract Administrator, a Coeus Cost Sharing Data Change Form, summarizing changes which were made in WBS funding during the closeout process. The form, along with the final financial report, will be reviewed by the OSP Contract Administrator, to make sure the cost sharing obligated under the terms of the award is being reported to the sponsor and input by the data center. This should result in adjustment of the authorized total on the cost sharing WBS to equal expenditures.

VPF will complete the final financial report to the Sponsor reporting allowable cost sharing as expended in the cost sharing WBS, cost sharing of subrecipients, and cost sharing for which documentation has been provided by the DLC.

General Notes

  • Review Coeus, sponsor notices of award, and amendments to understand sponsor terms and conditions
  • Review accounts and salary charges with Principal Investigators (PI) regularly and perform timely projections, cost transfers, and salary changes
  • $5,000 is the threshold for an allowable maximum residual inventory of unused materials and supplies, including computing devices at the end of a project, per OMB Uniform Guidance.
  • Generally, purchases near the end of a project are subject to additional scrutiny. Like all purchases, they must strictly follow the principles of being necessary and reasonable for the performance of the project, allocable to the project based on benefit received, and consistently applied.
  • Periodically encourage PIs to respond to certain sponsor, VPF, OSP, or other central office requests
  • Do not ignore automatic notifications on which the PI is copied

Actions

  • Reclassify or remove unallowables
  • Avoid late salary changes
  • Ensure that all travelers submit vouchers within one week of travel
  • Proactively close out open Purchase Order commitments on a regular basis
  • Anticipate and request no-cost extensions or additional funded extensions
  • Monitor fabricated equipment accounts and ensure completion of fabrication

Communications

  • Contact subawardees if there are several months without invoicing (involve the PI if necessary)
  • On interdepartmental projects, communicate and provide transparency to other DLC’s
  • Remind PIs and research groups to always copy or send final technical reports to ospaward@mit.edu