Funds in Deficit Status

Overview

A grant or contract is considered to be in deficit when total expenditures exceed the authorized award. Although there are many possible reasons for deficits, some of which may be legitimate and acceptable, deficit balances should be monitored monthly and resolved timely. It is not acceptable for deficits to reside in grant/contract accounts for an extended period of time.

A deficit balance on a grant/contract that has ended and will receive no additional funding should be resolved within 30 days of the close of the award, although within 90 days would still be acceptable. If it is determined that additional funding will be received, documentation should be provided to Grant Accounting by the department/PI.

As a reminder, it is not appropriate to clear a deficit on a grant/contract by moving it to a different grant/contract.

Roles and Responsibilities

Departments/PIs should monitor accounts for deficits on a monthly basis.

  • A deficit balance on a grant/contract that has ended and will receive no additional funding should be resolved within 30 days of the end of the award.
  • For accounts that will be receiving additional funding, yet are past the end date of the award, documentation from the sponsor should be provided by the department/PI to Grant Accounting indicating that additional funding is forthcoming and when it will be expected. Deficits due to considerable delays in the funding will be reported to the University Controller.

Grant Accounting will monitor deficits on a monthly basis.

  • As soon as Grant Accounting determines that an account is in deficit, the department/PI will be notified by Grant Accounting to provide a status of the account.
  • If it is determined that an account has gone into deficit before the project end date and there is no indication that there will be additional funding and/or there is no response to requests for information from Grant Accounting, the department/PI will be notified that the account will be closed to activity within 10 business days.
  • On a quarterly basis, a report will be distributed to the appropriate departmental administrator and collegiate administrator that will include all deficits related to grants where expenditures exceed the authorized amount.
  • Deficits should not reside in grant funds, particularly federal grants, for extended periods of time. Expenditures related to the deficit should be moved to a nongrant fund as soon as possible. If a PI/Department is unable or unwilling to resolve a deficit at the request of Grant Accounting, the deficit will be reported to the University Controller who will notify the Dean and Collegiate Budget Officer.

Last Updated: 8/20/06