Transcript Fixed Price Residuals - Florida State University

FIXED PRICE RESIDUAL
FUNDS POLICY
Includes procedures and example for
determining the distribution of residual
funds in accordance with FSU policy.
Andrea Durham, Training Administrator
Sponsored Research Accounting Services
CReATE v5-2013
© 2013 Florida State University. All rights reserved
FIXED PRICE RESIDUAL
FUNDS POLICY
 Cost Reimbursable
Agency pays FSU based on allowable project
costs; excess funds are returned to agency
VS.
 Fixed Price
Agency pays FSU amount specified in
contract; not based on expenditures; excess
funds retained by FSU
FIXED PRICE RESIDUAL
FUNDS POLICY
 What are Residual Funds?
The funds remaining on a fixed price project
after the final closeout.
 Why does FSU have a policy?
A policy is necessary to outline the process
for the distribution of the residual funds.
A fixed priced project will be closed out
as soon as possible after:
 The project expiration date
 All deliverables have been completed and
accepted by sponsor
 All expenditures and commitments have been
cleared (no encumbrances remain)
 All cash has been received from sponsor
 Property & equipment, if any, has been properly
assigned.
In determining the amount of a project’s
residual funds, SRAS:

Verifies the final calculation of F&A (Indirect)
costs earned based on the rate/base in the
approved agency budget. If necessary make
an adjustment for any difference.

Reviews
the
“reasonableness”
expenditures when compared to
performed.
of
the
total
work
Residuals balances 15% and Greater
 SRAS Coordinators will require Principle
Investigator to submit the following:

Written justification for residual balances equal
to or greater than 15%

Written certification that all expenditures have
been charged to fixed priced project
Issues with residuals 15% and greater

Another sponsored project charged for fixed
price expenditures

Effort not certified for work performed on fixed
price projects

Insufficient justification for unspent funds
Residual funds, under policy, will be
distributed as follows:
 Residuals
less the $500 will be transferred to the
Department’s SRAD Account if there is not an existing
PI Support Account.
 If
there is an existing PI Support Account, the first
$75,000 will be transferred to a "PI Research Support"
account.
 The PI support account will be established in primary
PI's name. If there is more than one PI on a project,
the primary PI may make funds available to other PIs.
Funds will not be prorated among PIs and set up in
separate accounts.
After transferring the first $75,000 to
the PI’s Research Support account:
 Any remaining balance will first be used to recover any
shortage of F&A costs actually recovered under the
project compared to the amount of F&A cost from using
FSU’s negotiated federal rate.
 If a project is performed off-campus, the off-campus
rate will apply (26%). If project is performed oncampus, the on-campus rate will apply (currently 47%
except for the MagLab).
After transferring first $75,000 to the
PI’s Research Support account, cont’d

Any difference between F&A costs charged to
the project and F&A costs that could have
been earned at the federal F&A rate will be
charged to the project.

This will result in additional F&A monies
being available for distribution in accordance
with FSU’s SRAD policy.
If after transferring initial $75,000 to the PI and
charging F&A at the full federal rate, any
remaining funds will be distributed as follows:

Fifty percent (50%) to the PI Research
Support account. Again these monies will
to be used to further University’s research
mission

Fifty percent (50%) to VP for Research.
These funds will also be used to support
University faculty research programs.
Example of Fixed Price Residual Funds
distribution

A grant was awarded for $402,500. The budget
for direct costs (DC) totaled $350,000 for salaries
and fringe benefits and indirect costs (IDC)
totaled $52,500 at a 15% TDC rate. A total of
$230,000 was actually expended.
Award
DC $350,000
IDC $52,500 ($350K x 0.15 TDC)
Total $402,500
Actual Expenditures
DC $200,000
IDC $30,000 ($200K x 0.15 TDC)
Total $230,000
What is the Residual Funds amount?
$402,500 Award Total
(230,000) Actual Expenditures
$172,500 Residual Funds
The first $75,000 goes to the PI. After
that, Indirect Costs are recalculated as
follows:
The difference between amount of indirect
cost based on awarded rate and full federal
rate is calculated

The grant was awarded for $402,500. A total of
$230,000 was expended ($200,000 salaries
and fringe benefits and $30,000 IDC at 15%).
$200,000
MTDC Expenditures
0.47 IDC Full federal rate
$ 94,000
IDC Amt @ Full federal rate
(30,000)
IDC charged @15%
$ 64,000 Additional IDC earned
How Are Residual Funds distributed?
$75,000
$172,500
Residual
$97,500
PI
$64,000 Additional IDC
SRAD
$16,750 PI
$33,500
$402,500 Award
(230,000) Expenditures
$172,500 Residual Funds
(50%)
$16,750 OVPR
(50%)
If PI leaves FSU and funds remain in PI
Research Support project:

Ordinarily, such residual funds will be
transferred to the VP for Research. However,
the Department Chair may request that the
funds be transferred to the Department’s
SRAD Allocation account. Approval is at the
discretion of the VP for Research. In either
case, these funds must be used to support
University research programs.
Questions