Letter of Credit (LOCs)

Financial Reporting – Letter of Credits

Federal sponsoring agencies typically request financial reporting on an interim and final basis.  The reporting form that is used is the Federal Financial Report commonly known as the SF425.  It is sometimes referred to as the ffr. Sponsors may request an SF425 Cash Report where only the revenue section is completed.  The cash report is routinely submitted by System accountants for their draw activities. A Full SF425 is submitted by ORA at intervals listed in the award agreement. The frequency of the submission depends on the needs of the federal agency.  The most common reporting periods are quarterly reporting, followed by semi-annual, then annual reporting.  A final financial report is always submitted at the very end of an award.

For the period being reported, ORA accountants report expenses that have been posted to the project in the general ledger.  If the award has cost sharing, these costs are included as well as in-kind or third party if any.

Most federal awards are letter-of-credit type awards.  This means the way the University receives payment from these federal agencies are from drawdowns.  There is no billing or invoicing involved.  Funds are drawn weekly on the drawdown site to cover expenses that have been posted to the projects.

Additional Resources

University of Maine Administrative Practice Letters:

Section VIII-J: Financial Reporting

 Uniform Guidance:

2 CFR 200.327 Financial Reporting