Sponsored Research
Research CCHIP #022
CLARIFICATION OR CHANGE IN PROCEDURE (CCHIP)
Loss Mitigation for Sponsored Awards
OVERVIEW
Sponsored Awards are effectively a promise to pay by the sponsor who funds the research activity. The University of South Florida advances funds to investigators to conduct their research and invoices the sponsor for reimbursement based on the terms and conditions of the award.
Uncollectible expenditures have a negative financial impact on the entire research enterprise when their costs are borne by indirect cost recovery. For that reason, when the university’s outlay of funds become uncollectible, Sponsored Research has an obligation to mitigate further loss to USF.
This CCHIP outlines the steps that will be made to collect outstanding receivables, notify stakeholders of delays or delinquency, and suspend project(s) to mitigate the potential for further loss to the University of South Florida.
CLARIFICATION OR CHANGE
Sponsored Research will review the status of outstanding receivables throughout the life of the award; this change better positions the university to mitigate loss due to nonpayment.
PROCEDURES
Invoicing, collection, and application of payment are the responsibility of Sponsored Research and Cash Management collectively.
Sponsored Research will prepare and submit the invoice and/or financial report to the sponsoring agency as required by the terms and conditions of the agreement. The invoice will indicate that payment is “due upon receipt”.
When payment is not received within 30 days:
- Cash Management will send a reminder to the sponsor of the outstanding receivable.
- Sponsored Research’s assigned Invoicing and Reporting Grant Financial Administrator will follow up with the sponsoring agency to inquire if additional information is needed and encourage prompt payment of the outstanding invoice. The Invoicing and Reporting Assistant Director will track and monitor the past-due receivable. Sponsored Research will notify the PI of the outstanding payment to inquire if there is a deliverable missing or a known reason for the non-payment.
When payment is not received within 60 days:
- Cash Management will send a reminder to the sponsor of the outstanding receivable
and will have their collections team follow up with the sponsoring agency directly.
- Sponsored Research’s assigned Invoicing and Reporting Grant Financial Administrator will follow up with the sponsoring agency to provide any additional information that is needed and notify the sponsoring agency of the delinquent invoice. The Invoicing and Reporting Assistant Director will track and monitor the past-due receivable. The sponsoring agency will be informed that a stop-work order may be issued by the University of South Florida if the payment is not received. Sponsored Research will notify the PI, Department Chairperson, Associate Dean for Research, and Dean of the respective College that the invoice remains outstanding and a stop- work order will be issued if the project remains uncollectible.
When payment is not received within 90 days:
- Sponsored Research will review the circumstances surrounding the non- payment, and may suspend the project to prevent further debt to the University of South Florida. A stop-work order may be issued to the USF PI.
- If a stop-work order is issued to the USF PI, the PI should issue stop-work orders
to any subrecipients or vendors of the project.
- Payments and overrides for expenditures will not be permitted for work conducted after a stop-work order has been issued.
When payment is not received within 120 days:
- The project may be referred to collections and/or a legal demand letter may be issued.
- The sponsoring agency may be placed on a bad-debtor list; the university may prohibit doing business with the entity in the future.
Reactivating a suspended project:
A project will be reactivated when the past due invoice(s) is/are paid.
A PI who wishes to reactivate a project suspended due to non-payment—before the past due invoices are brought current—may submit a request to the Director of Sponsored Research to reactivate the project. The request must include a justification for why the project should be reactivated; the justification should also identify the total financial risk to the university and expound on how the expenditures will be paid in the event that further collection efforts remain unsuccessful. The request should include authorization from the Dean of the respective college to proceed with reactivation of the project given the circumstances identified.
In the event that the debt is determined uncollectible:
When Sponsored Research is notified of a sponsor’s intent to not honor their debt to the University of South Florida, or when—for another reason—Sponsored Research has determined that the debt has become uncollectible (e.g., sponsoring company has gone out of business, sponsor has notified USF it will not honor their commitment to another project for reasons other than non-performance, etc.), Sponsored Research may bypass step(s) in the escalation procedure outlined above, as necessary, to most effectively mitigate the risk of financial loss to the university.
CONTACT
Please address your comments or questions regarding this CCHIP to your Invoicing and Reporting Grant Financial Administrator.
EFFECTIVE DATE
This CCHIP is effective as of the date of revision and rescinds all previous versions pertaining to the Loss Mitigation for Sponsored Awards.
ISSUED: March 11, 2021
LAST REVISION: March 11, 2021