Financial Reporting – Reimbursables
Projects that are not letter-of-credit type are considered billable or reimbursable. They require some form of invoicing. Some projects are pre-paid awards where funds are collected up front. For projects that require billing, ORA prepares and sends to sponsors itemized invoices based on expense activity. If the project has cost sharing, the cost sharing expenses are also itemized as a non-sponsor cost on the invoice. Payments are collected by ORA and deposited directly into the revenue line of the project. Sponsors often hold back final payments pending the receipt and acceptance of the final technical report. Since a project can’t be closed in GL if it hasn’t been fully reimbursed, it is important to submit all technical reports in a timely manner. For projects that have been paid up front and had no billings, a final statement of expenditures is provided to the sponsor at the end of the project.
Invoices to Sponsors
Office of Research Administration Accounting prepares and submits invoices to sponsors for sponsored agreements in accordance with the terms and conditions in the agreement. For certain federal agencies, ORA will request funds electronically. Other federal or non-federal sponsors may require invoicing on a monthly, quarterly or other basis, while some sponsors may pay in advance or make scheduled payments. Full compliance with the terms and conditions for invoicing significantly increases UMaine’s ability to collect all amounts due from sponsors. Accordingly, departments must submit charges for processing in the university accounting system on a timely basis and provide all documentation (if required) to ORA within designated deadlines.
All deposits to sponsored agreement project numbers, including checks from sponsors, refunds from vendors and receipts via ACH payments must be completed by ORA. Departments cannot process deposits to sponsored agreement accounts.
Collection of Overdue Amounts from Sponsor
A majority of sponsored agreements include terms and conditions for receipt of payment that require the university to extend credit to the sponsor. In other words, university departments must incur costs before invoices can be submitted to the sponsor or funds are received from the sponsor. Office of Research Administration Accounting, on behalf of the department/unit, assumes the lead role in collection of amounts due from sponsors (accounts receivable); however, in the event that a sponsor does not make all the payments as promised in the agreement, unreimbursed costs become the responsibility of the department that incurred the expenses.
ORA’s effort to collect overdue payments will generally follow the steps and timeline indicated below. Individual situations may require variations in order to maintain university-sponsor relationships while collecting funds owed to the university.
- A past due reminder will be sent at 30 & 60 days past the invoice date to the sponsor, usually with the current month invoices. The department and PI will receive a copy of the notifications and should notify ORA of any information they might have regarding the reason for non-payment (for example, an overdue technical report).
- After the 90 days of delinquency, the account will be reviewed by ORA and the Bursar’s Office and may be declared uncollectible, depending on circumstances applicable to that particular account. Factors that will be considered include the type of sponsor, the sponsor’s payment history, information provided by the principal investigator and feedback from the sponsor (or lack there of).
- Once an account is determined to be uncollectible, the department will be notified by ORA in writing. Within 60 days of notification the costs will be transferred to a departmental or college account.