Research and Sponsored Projects Manual (RSP)

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Effective: 7/1/1991

Revised: 3/1/2005

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RSP 506–04: Guaranteeing Delinquent Sponsored Projects Agency/Orgs

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Purpose

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To establish a procedure for principal investigators, with their department, center, or college, to guarantee coverage of project costs when a sponsor fails to meet its financial obligation

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Source

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Office for Research and Sponsored Projects Administration

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Policy

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The Office for Research and Sponsored Projects Administration (ORSPA) is responsible for the billing and collection of payments owed by sponsors to the university. ORSPA’s Accounts Receivable operation is designed for timely invoicing, aging of receivables, follow-up action on unpaid bills, and other cash management functions. The process is particularly attentive to “high-risk” receivables.

Sometimes, despite collection efforts, a sponsor cannot or will not pay for costs incurred for project performance. At such times, it must be considered whether it is in the university’s best interest to continue to incur costs, or whether it is best to stop work and spending until the receivables issue is satisfactorily resolved.

If a principal investigator (PI) wishes to continue to incur costs when a sponsored agency/org is delinquent and the receivables issue is not yet satisfactorily resolved, he or she must assure the coverage of such additional costs by a nonsponsored agency/org. This authorization is routed through the appropriate department chair, center director, or college designee.

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ProcedureD

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Responsibility
Action
Sponsored projects accountant (SPA)
  1. Send invoices to sponsors and pursue payment as part of standard Accounts Receivable (A/R) procedures.
  2. Alert the principal investigator when there is a receivables problem on the sponsored account.
If appropriate:
  1. Ask the principal investigator to contact the technical counterpart at the sponsor to:
    1. expedite payment

      or

    2. provide additional information regarding nonpayment of obligations.
Principal investigator
  1. Provide any available information to Grant and Contract Accounting regarding nonpayment by sponsor.
  2. Work with sponsor insofar as reasonable (submit required technical reports, etc.).
When the sponsor is unable or unwilling to pay its bills:
SPA
  1. Advise the principal investigator of options available to protect the university’s and the project’s interests:
    1. to suspend work and spending and incur no additional costs on behalf of the project

      or

    2. to guarantee that additional project costs will be covered by a nonsponsored source of funds.
Principal investigator
  1. Authorize additional project spending only if:
    1. the receivables issue is satisfactorily resolved

      or

    2. a guarantee of coverage for additional project costs by a nonsponsored account is secured.
endtable

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