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COST OVERRUNS
How To Eliminate
Deficit Balances (Cost Overrun)
Purpose of
Policy
This policy has been developed to
provide guidelines for the management of Sponsored Program indexs
(ledger 5).
Policy
It is the responsibility of the
department head, fiscal administrator, principal investigator and/or
responsible person to ensure that adequate funds are available for
expenditure transactions, including payroll disbursements. Should any
index be in a deficit position for two consecutive months, no further
transactions will be processed against the index until the deficit is
eliminated. Exceptions to this policy will be granted only when special
arrangements have been made in advance. Such arrangements must include a
specific plan for eliminating the deficit on a permanent basis.
- A deficit report will be available to
fiscal administrators on SAS daily and updated each
month. A summary copy may be printed b PI and major budget unit for each dean or administrative division
head. When an index appears in a deficit balance, transactions to
clear the index must be processed by the 15th of the month.
- Should an index be in a deficit
position greater than $500 for two consecutive months, no
expenditures, including payroll disbursements, will be processed
against the index until the deficit is eliminated.
- Transactions which cannot be
processed against a Terminated index will be processed against the
department or dean's overhead index. The given index will continue
to be used until the deficit in the original index is eliminated. In
the case of payroll expenditures, the originating department must also
initiate the
necessary Personnel Action Form (PAF) for each employee to charge
funding back to
the proper index. For non-payroll related expenditures, the
department must initiate the necessary adjustments to transfer all
non-payroll expenditures back to the proper index.
- Any index reflecting a deficit
balance for three consecutive months without a special arrangement in
place will be reported to the dean or administrative division head and
budget will be requested from that office to cover their current and
projected deficit
- Any index reflecting a deficit
for four consecutive months without special arrangements in place will
be reported to the appropriate vice president. The vice president will
be requested to approve a transfer to eliminate the deficit.
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