In order to appropriately administer and closeout awards within the University's financial system, OSP and RFS staff categorizes projects into two distinct types. The defining characteristics of each type are described below.
Cost-reimbursable sponsored projects provide for payment of allowable incurred costs, to the extent prescribed in the agreement. These agreements establish a budget of total cost for the purpose of obligating funds and establishing a ceiling that the sponsor will not normally exceed. Requests for reimbursement of costs are most likely accomplished through either drawing-down funds via letter of credit or invoicing. Most projects at GSU are categorized as cost-reimbursable. In rare cases, a sponsored project that is cost-reimbursable may provide payments in advance of costs being incurred. In these agreements, the sponsor requires a final or intermittent financial report reflecting all costs incurred and a refund of unused funds upon termination/closeout of the award.
Federal Projects. Most federal projects are cost-reimbursable and are paid via letter of credit. Costs are incurred and then “drawn down” through a reporting process where expenditures are reported on a quarterly basis. Federal projects are almost never funded in advance of expenditures, hence when a project is over, there are no actual funds that remain or need to be returned.
Non-Federal Projects. Although some non-federal projects also are funded through invoicing or letters of credit, many state, foundation, and private cost-reimbursable sponsored projects may be funded in advance (prior to incurring expenses).
Project Invoicing. For cost-reimbursable awards, as part of the monthly review process, RFS request funds from sponsors to reimburse GSURF for each month's expenditures. Invoices for state, local, and private sponsored projects are system-generated through our financial accounting system on a monthly basis. The RFS staff accountants generate quarterly invoices. Non-federal sponsors are invoiced either monthly or quarterly, depending on the terms of the award.
Sponsored Projects that are fixed price operate under an established price that is not subject to any adjustment on the basis of the contractor's cost experience in performing the agreement. This type of project places maximum risk and full responsibility for all costs and resulting profit or loss on the contractor. In these cases, the contractor is motivated to control costs, insure efficiency, and minimize the administrative burden on the contracting parties. When the fixed price total exceeds the total costs incurred, the remaining funds are considered residual balances. The treatment of these balances varies depending on whether the sponsored project is funded through the GSU Research Foundation or GSU. The vast majority of the university's sponsored projects are funded through the GSU Research Foundation where residual balances are transferred to departmental residual projects (i.e., ALR##, BLR##). Once all project deliverables are completed and all funds are received, the original project is closed out within 90 days of the project end date and all residual funds are transferred.
Questions? Contact RFS