Responsibility for Losses Policy

Purpose

This document provides the Research Foundation’s policy on responsibility for losses incurred during the conduct and administration of sponsored projects and during the conduct of other corporate activities.

Basis for Policy

On May 26, 1993, the Research Foundation Board of Directors adopted Resolution 93-10 to formally identify responsibility for financial losses.

Definitions

Losses: Include, but are not limited to, sponsor nonpayment of prefunded expenditures (At Risk); sponsor disallowances; bad debts; overexpenditures on grants/contracts; and nonfulfillment of grant or contract requirements. In addition, losses include any penalties or reimbursements imposed by government entities.

Corporate reserves: Fund balances accumulated prior to 1991 and any increases authorized in annual financial plans by the Board of Directors in future years.

Location reserves: Unexpended Research Foundation allocations.

Policy

Each campus or other designated operating location is responsible for losses on any Research Foundation activity incurred as a result of action or inaction on the part of that location. Losses may be charged against annual location sponsored program income, location reserves, or other sources of funds available to the location.

The central office is responsible for any losses incurred by the Research Foundation not attributable to any action/inaction on the part of the campuses or other designated operating locations. Any such loss will be charged against corporate reserves.

Implementation

When a loss is identified, the corporation’s treasurer will determine responsibility and establish methods, terms, and conditions of payment in consultation with the applicable Research Foundation operations manager.

 

 

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