|Table of Contents>Freezing Grants|
· To establish a process to enable grants managers to control activity against a fund both during the life of the project and during closeout.
· Activity Subject to Freeze
Grant funds can be frozen to prevent activity from any one or more of the following transaction sources:
On-line Journal Entry/Encumbrance Entry
The following FinMIS activity is exempt from the freeze:
Online activity initiated by Research Services
Examples of when to freeze a fund during the lifetime of the project:
Monitor the fund on at least a monthly basis. Project the salary/wages and employee benefits for either the lifetime of the project or the current budget year (regardless of the payroll system job end date). Encumber the projected indirect costs based on projected direct costs expenditures. Project or encumber transactions not encumbered in FinMIS (recurring feeder system charges such as animal per diem, cell center, tuition, etc.) and the related indirect costs.
Look at the projected bottom line. Is it positive? By how much? If the projected positive balance is within your comfort zone, say one month's average total expenditures, do not freeze the fund.
An efficient way to determine if you are spending funds more quickly than they were awarded is to review the burn rate in GRAM. However, the burn rate includes encumbered salaries and will be misleading if encumbrances are correct. To more accurately determine, calculate one third of three months' expenses to obtain a more reliable estimate of monthly expenses.
Is it positive but with a balance less than one month's average total expenditures? Consider all the resources available to the PI, and consider freezing new Purchase Orders if the PI has no unrestricted funds available.
Is it negative but with a future year of funding committed? If there is a future year of funding committed within the same project period, and the fund will retain the same fund number in the following year, and the projected deficit is less than 25%, do not freeze the fund. Talk to the PI about the implications for the future of the project, and complete the Account Continuation Request Form on the Research Services web site, which will authorize expenditures against the next year's committed budget. If the projected deficit is greater than 25%, freeze the fund and talk to the Principal Investigator about reallocating the resources available (e.g. reassigning a technician's workload to allow him or her to work on a different project that has available budget and reallocate available resources in compliance with sponsor guidelines).
Keep in mind whether it is allowable, allocable and reasonable. Refer to:
Is it negative in the final budget year of a project period but with a high likelihood that the competitive renewal will be funded? Freeze the fund. Is it within 90 days of the probable start date of the new project period? Submit an Advance Account Request for the new project period and, if allowable, request authorization for pre-award expenses. Discuss with the PI the implications for the future budget period and begin charging project related expenses to the new fund.
Is it negative in the final budget year with a competitive renewal not
likely to be funded? Freeze the fund immediately. Talk with the PI. Are
other projects in the lab funded? Can technicians/postdocs/graduate students
be assigned to those projects? If so, do so. If not, contact Human Resources
re Position Discontinuation and Staff Transition policy; contact the Office
of Postdoctoral Affairs re termination of postdocs, and contact BGS if
graduate students will need emergency support.
Freeze grant will not stop feeder charges but simply divert them to a suspense object code of 9599. Refer to Suspense SOP. After the adjustment period payroll will also divert to this suspense account because the system will have automatically frozen the account at that time.
Function override is a freeze action performed when you are sure all
manual on-line, c-forms, and feeder system (including payroll expense
and outstanding payroll reallocations) journal entries have posted to
the account and the fund can be reported on. This may occur prior to the
end date of the sponsored project. Payroll/salary management journals
can not be frozen independently like manual on-line journals, etc. Endusers
cannot freeze payroll/salary management journals without performing 'function
override' which freezes all journal entries on the entire fund. You should
use the function override cautiously as only Research Services can reverse
the action if the function override was done prematurely.
Refer to Suspense SOP