Guidelines for Distribution and Use of Residual Funds

Purpose/Objective

This guideline establishes the procedure for requesting the transfer of funds remaining from a grant with a fixed price, fee-for-service, or fixed fee agreement (such as a clinical trial grant) after satisfactory completion of the work and submission of all required deliverables. 

Scope and Definitions

A fixed price grant should be charged the actual expenses incurred for the undertaking. If costs are adequately estimated at the proposal stage, expenses should approximate the amount awarded. At the close of the grant, funds received exceeding expenses may qualify as residual balance if the agreement does not require return of the funds and the appropriate approval is received. Significant residual balances on fixed price awards will be monitored and reviewed for appropriateness.

Fixed Price (Fixed Fee) Award - A sponsored research agreement between the university and an external party (sponsor) where the university agrees to perform specific project deliverables within a specified timeframe in exchange for a fixed amount.  

Fee-For-Service - Predetermined amount is paid for each service performed.

Residual Balance - The balance of funds remaining on a grant after all work has been completed that the university is permitted to retain based on the terms of the agreement.

Above the Threshold - Residuals balances which are 25% or greater of the total funding received and $10,000 or greater.

• Residual funds are the property of Ohio State and must be used to support the research mission. 
• All residuals with a direct balance over $300 require completion of Residual Balance Transfer Request form.
• Residual balances above the threshold (≥25% and $10,000 or greater) are considered significant and require a detailed explanation of how the work was completed using substantially less award funding. They will be considered on a case-by-case basis. Patterns of significant balances will be monitored by ERIK Sponsored Fiscal Operations.
• Awards that receive less than the full indirect cost rate and have a remaining balance above the threshold, may be assessed the university’s full, published indirect rate on the residual balance before the direct balance is transferred, at the discretion of ERIK Finance and Business Administration.

Roles and Responsibilities

1. At the close of a fixed price, fixed fee, or fee-for-service grant where a balance greater than $300 remains, the Enterprise for Research, Innovation and Knowledge (ERIK) Sponsored Fiscal Operations Billing Team initiates the Residual Balance Transfer Request in Smartsheet which routes to the Principal Investigator (PI) of the grant
2. If the residual amount is less than 25% of the total funding received or ≥ 25% but less than $10,000, PI receives a notification to review and sign an attestation which must be completed within 10 business days. Failure to respond within 10 business days may result in a forfeiture of funds.
3. If the residual amount is above the threshold, PI must provide a detailed explanation of the substantial balance within 10 business days for review by ERIK Finance and Business Administration. Failure to provide a justification within 10 days may result in forfeiture of funds.
   1. If revisions to the justification are required, the form will be returned to the PI to provide additional information.
   2. If no revisions are needed, a DocuSign will be generated and routed for signature by:
      1. Principal Investigator within 5 business days.
      2. Senior Fiscal Officer (of PI’s unit) within 5 business days.
      3. ERIK Associate Vice President for Finance and Business Administration reviews the form and all comments, then approves or denies the residual fund transfer within 5 business days.
4. Notice of approval routes to PI and Billing Team with a copy to the Senior Fiscal Officer(s) of the unit(s) listed on the PA-005 in which the expenditure credit was allocated.
5. The Billing Team completes appropriates steps to close the grant.
6. ERIK Sponsored Fiscal Operations Accounting Team enters a journal and transfers the direct balance to FD100 and cost center(s) listed on the expenditure allocation of the approved PA-005.
7. If the transfer request is denied or approved for a reduced amount. ERIK Finance and Business Administration will reach out to the Principal Investigator and Senior Fiscal Officer(s) of the unit(s) to discuss.