RSP Notice 2011-2

NOTICE 2011-2
March 31, 2011

TO: Deans, Directors, Department Chairs, and Department Administrators (for distribution to all Faculty)
FROM: Kim Moreland, Associate Vice Chancellor; Martin Cadwallader, Vice Chancellor for Research; Darrell Bazzell, Vice Chancellor for Administration
SUBJECT:  Financial Responsiblity for Uncollectable Costs on Extramural Projects

The purpose of this notice is to reaffirm the University’s long-standing policy of primary fiscal responsibility and accountability for extramural projects in terms of:

In all cases, ultimate financial liability rests with the Dean/Director. 

Even though sponsored project administration is a shared responsibility among Principal Investigators, Department Chairs, Deans or Directors, and Research and Sponsored Programs, the responsibility for promptly clearing budget overdrafts, especially at the end of a project rests with the Dean or Director.  While this responsibility has been identified in the past and the subject of the 1992 RSP Notice 93-3, the actual clearance of overdrafts has not always happened in a timely manner.  Campus-wide  administrative redesign initiatives have repeatedly identified delays in removing overdrafts and unallowable expenditures as a root cause of delays in submitting financial reports and invoices to sponsors, presenting accurate financial information to Principal Investigators, and closing out sponsored projects.   

Delinquent or uncollectable payments from sponsors create situations where total expenditures exceed the amount of receipts collected, both on federally and non-federally funded projects.  In these cases, the principal investigator and other project staff are usually the first to become aware of either the sponsor’s potential dissatisfaction with project results or the sponsor’s financial difficulties.  It is extremely important to minimize the financial damage when such facts are known.  Spending should be stopped immediately and Research and Sponsored Programs should be notified through the Dean or Director’s office.  While RSP, along with the Office of Legal Services, will make every effort to alleviate the difficulties, ultimate financial liability again rests with the Dean/Director.

Because of the negative consequences related to overdrafts, we do expect that everyone, including Principal Investigators, Department Chairs, Deans or Directors, and Research and Sponsored Programs, will cooperate in avoiding overdrafts and rectifying them in a timely manner should they occur.  Please find a list of existing and future tools that are available to facilitate the fiscal management of overdrafts at this helpful page in Attachment A.

We appreciate the efforts by you, your staff, and Principal Investigators in your school or college to improve the management of extramural funds at the University of Wisconsin-Madison.  In order to maintain our current levels of fiscal autonomy, it is extremely important that we comply with the terms and conditions of our extramural support, as well as the State of Wisconsin’s financial management requirements.

Please be advised that Research and Sponsored Programs will continue to provide Dean and Director’s Offices with the monthly overdrawn projects reports.  We are also willing to assist you in obtaining any additional data and support needed to fulfill your financial management responsibilities.  If you have any questions, contact Robert Andresen, Assistant Director, RSP, at or 608-262-2896. 

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