Updated Process for Escalation of Surplus Transfers on Sponsored Awards

A surplus—defined as revenue in excess of expenditures—occasionally remains at the conclusion of an award. Common among clinical trials and private contracts and grants, surpluses are either returned to the sponsor or retained by the University as support, based on sponsor terms. Where sponsor terms permit UCSF to keep a surplus, specific criteria must be monitored to ensure that activities conducted support sponsor terms and to assess tax risk if a significant profit is realized on sponsored research. The proper recording of expenses onto the award provides this assurance.

Based on consultation with other UC campuses and peer universities, Contracts & Grants Accounting (CGA) has identified best practices for setting thresholds to monitor proper recording of expenses. CGA presented findings to Control Point Financial Officers, who collaborated on establishing an updated escalation process. A new escalation process, effective January 1, 2020, was introduced at the December 2019 Research Administration Town Hall and is detailed below.

Before processing, CGA will be escalating all surplus transfers that are 50% or greater of the total award revenue for further review and approval as follows:

  • The departmental Financial Administrator will be contacted for any surplus transfers equal to or greater than 50% of the award revenue.
  • The departmental Head of Unit will be contacted for a surplus transfer that is 100% of actual award revenue.

For these purposes, Financial Administrator and Head of Unit for each department are defined Department Role Assignments in PeopleSoft. Role assignments can be confirmed using the Research Administration System (RAS) or the Dept ID Inquiry Report on the Controller’s Office website. Exceptions to this policy are those clinical trials that did not enroll patients where there are non-refundable fees received, such as IRB fees or lab set-up fees.

The Financial Administrator or the Head of Unit will receive an email for their review and approval from the assigned CGA team member. Timely review and action is necessary to process the transfer and close out the award. CGA would like to encourage use of these notifications as an opportunity to identify issues and adopt best practices within departments to ensure accurate posting of expenses onto sponsored research awards.

More information on accounting for surplus transfers for private awards can be found on the Controller’s Office website. Members of the Research Administrators Town Hall Chatter Group can access presentation materials from the December 2019 RA Town Hall on Chatter.