Effective December 17, 2018, the Office of Sponsored Research (OSR) has revised Operating Standard 700.4 – Residual Fund Balance to include additional language that addresses projects with minimal to no direct expenses, insufficient justifications included with residual requests, and clarified language on indirect cost application exemption.
Additional language included with revision:
- Projects with minimal or no direct expenses will be charged the full amount of indirect costs from the residual balance based on the Total Award Amount.
- Insufficient justification will require further documentation prior to processing a residual request.
Revised (clarified) language on Indirect Cost Application Exemption:
Applicable residual balances will be reduced to recover indirect costs if the project received a full or partial F&A waiver, or if a reduced indirect rate was otherwise awarded by the sponsor. The amount charged will be up to the total amount of indirect costs that would have been incurred had the project not received a waiver, based on the current direct costs.
Below are important reminders about residual balances:
- All direct charges and project revenue have been accounted for properly
- All project deliverables have been provided and accepted by the sponsor
- All project payments have been received from the sponsor
- The applicable amount of indirect costs generated by the project’s expenditures have been recovered
- The sponsored agreement terms do not require the University to return the residual balance
- Justification for residual balances greater than 25% of the Total Award Amount