Sponsored Projects Accounting invoices for the majority of sponsored projects through our automated invoicing system known as the Research Proposal Accounting (RPA) system. This system was programmed in-house by our Financial Information Systems (FIS) department utilizing ORACLE compatible software. Invoicing requirements are set up as a schedule in the RPA system based upon information provided in the sponsored project NOA. We also have the ability to create invoices on a manual basis outside the automated system when sponsors provide their own invoicing format or require a more customized format than the standard University invoice. Sometimes these manual invoices must be created by the Department Administrators because the basis for invoice preparation does not exist in the University’s general ledger.
Every sponsored project NOA should have an invoicing, payments or other clause that address how the University will invoice or how the sponsor will reimburse the University. If after reviewing your Sponsored Projects Account Activation Report, you don’t agree with the invoicing method established for the account we have activated for you, please notify your Sponsored Projects Accountant who will review your inquiry, provide explanations and make any necessary changes.
The University invoices and sponsors pay the University in a variety of ways. The sponsored project attribute Payment Method Identifies the type of reimbursement to, or invoicing by the University. A list of Payment Methods follows:
Cost Reimbursable - Letter-of-Credit
04 DHHS Letter of Credit – Subaccounted
07 NASA Letter of Credit – Greenbelt
10 Energy Letter of Credit – Chicago
11 DHHS Letter of Credit - Pooled
12 USDA Letter of Credit
13 NSF Letter of Credit
15 EPA Letter of Credit
16 Education Letter of Credit
17 Justice Letter of Credit
18 USAID Letter of Credit
Cost Reimbursable - Invoice
30 Cost Reimbursable, Monthly Invoice
31 Cost Reimbursable, Quarterly Invoice
41 Cost Reimbursable, Installment, Auto-Payment
51 Cost Reimbursable, Installment, Invoice
20 Fixed Price, RCA Invoice
21 Fixed Price, Memo Invoice, Auto-payment
22 Fixed Price, Dept Invoice
61 Budgets increased to equal income received
Early Account – Contract Type Unknown:
80 No award, early account
A brief discussion of each Payment Method follows:
Cost reimbursable awards provide for payment of allowable, incurred costs as prescribed in the NOA subject to a not-to-exceed limitation. This award type is used when acquiring items or services when uncertainties involved in the award performance do not permit costs to be estimated with sufficient accuracy (like research and other sponsored activities of the University) to warrant any type of fixed-price contract. A cost-based, detailed line-item budget typically accompanies such awards.
The Letter-of-Credit Payment Methods delineate all payment methods for federal agencies that require reimbursement to the University via a federal Letter-of-Credit. A letter of credit is a document that guarantees payment. Federal agencies are the only agencies that utilize Letters-of-Credit with the University. Each number identifies a single agency and/or a single agency and payment office. The fact that the specific sponsored project account will be reimbursed via a Letter-of-Credit, and the specific payment office of the Letter-of-Credit is identified in the NOA.
Cost reimbursable invoices can either be monthly, quarterly, installment or automatic payment by the sponsor. Projects that require monthly invoices are designated as such in the RPA system and generate based upon costs recorded by departments in PRISM for that particular month. Projects that require quarterly invoices are designated as such in the RPA system and generate based upon costs recorded by departments in PRISM for that particular quarter. NOAs can sometimes contain an installment schedule where sponsors will require an invoice from the University for, or automatically send the University payments based upon, set amounts at set intervals such as equal quarterly installment payments over the life of the award equal to the total amount of funding. Any interval can be set by the sponsoring agencies and are set up by Sponsored Projects Accounting as installment invoices that are either automatically paid by the sponsor or require invoicing by the University.
Fixed price awards provide for payment of a firm or established price as prescribed in the NOA. This award type is used when acquiring standard, off-the-shelf, commercial items or services on the basis of reasonably certain, detailed specifications where fair and reasonable prices can be established at the outset of the award. A fixed price, capitation or fee-for-service schedule of payments typically accompanies such awards. Examples include certain clinical trial awards received by the University.
Fixed price invoices can be generated by Sponsored Projects Accounting, the departments, or the sponsor may send reimbursement directly to the University without an invoice. Sponsored Projects Accounting invoices on fixed price sponsored projects when departments provide the necessary information required to invoice based upon the capitation or fee-for-service schedule provided in the agreement, or informs us that other invoice milestones of the award were met by the department. The department invoices on fixed price sponsored projects when the department possesses the bulk of the knowledge with respect to performance metrics, milestones, tests performed, etc. required by the fixed price type project and it is not practical or expedient for Sponsored Projects Accounting to invoice on the project. Finally, when the sponsor automatically reimburses the University based upon the receipt of test results, reporting, receipt of samples, etc. the project would be established as a fixed price automatic payment and no invoicing is necessary.
As previously discussed in the Account Activation section of the website, an early account is a sponsored project account that is requested and approved prior to receipt of a properly executed NOA to enable the timely assignment of faculty and staff effort through the University’s effort reporting system as well as the timely recording of non-salary project related expenses to avoid excessive cost transfers.
An early account cannot remain an early account indefinitely as the University cannot invoice on an early account until a properly executed NOA is in place. The requesting department assumes all financial risk with respect to costs incurred and recorded to an early account in the event the NOA is never received by the University.
Timing of Invoices
Cost reimbursable invoices are scheduled to print in the RPA subsystem as follows:
Payroll and fringe benefit expenses do not post to the University’s general ledger until the calendar month ends and the monthly accounting closing period ends. Payroll and fringe benefits currently constitute over 60% of direct sponsored project costs annually at the University. Accordingly, the University should never agree to terms that require the University to submit invoices prior to calendar month end, or the accounting month end closing period because salary and fringe benefit expenses do not post to sponsored project accounts until that time and would require the preparation of invoices on a manual basis.
Failure to timely and accurately prepare and submit a final invoice can result in the University’s inability to collect all funds owed on a sponsored project. Accordingly, the department’s timely and accurate participation in the financial closing of the project and providing the necessary information for the preparation of the final invoice is of paramount importance. This is accomplished by submitting a timely accounting Closing Memorandum to Sponsored Projects Accounting so that the appropriate final costs can be accrued and invoiced. If a Closing Memorandum is not received timely by Sponsored Projects Accounting, the project will be closed based on the amounts reflected on the Level Reports at the end date of the project, and any trailing charges assigned to the project after that date will be paid for by the Department. See the Account Closing section of the website.
Final invoices are generated without a mailing date as it is necessary to adjust the invoice to include an accrual for all closing costs or trailing charges. Based on award requirements, adjustments must be recorded within 30 to 90 days. Most projects close and funds are de-obligated or cancelled by sponsoring agencies 120 days after the end date of an award. After the final invoice adjustments are made, the invoice is printed, the mailing date is established and the invoice is sent to the sponsor.
Once a final invoice is submitted, rarely can the University seek any additional recoveries from the sponsoring agencies so the accuracy of final invoices is of great importance to our University and our sponsors.