Clear an Overdraft

Stanford expects administrators to manage sponsored projects in accordance with the sponsor terms and conditions and within the established budget. 

Before the Award End Date

If you anticipate an overdraft on a sponsored project PTA before the award end date, either:

• Transfer the cost onto another research related gift PTA or sponsored project which also benefited from the cost and provide documentation. OR

• Treat the transfer in the same manner as cost sharing.

  

After the Award End Date

Errors

If you discover an error after the award end date, transfer the expense prior to closeout.

If you determine an expense is unallowable to the project, but did benefit the project, you must transfer the expense to a Cost Sharing PTA for accounting purposes. However, the cost cannot be counted towards a Cost Sharing commitment.

Overdrafts

An overdraft exists if after the end date of an award expenses exceed funding. An overdraft does not represent cost sharing, but it must be charged to a cost sharing account in order for it to be properly reflected in the calculation of the Indirect Cost (F&A) (Facilities & Administrative) cost rate.

If the award is in overdraft at the end of the project period, remove the overdraft from the award according to rules outlined in Stanford Policy. Expenses removed as a result of an overdraft should have been incurred during the last 6 months of the project.

Remove the overdraft in a timely manner

• If total overdraft is less than $500, transfer lump sum (net of indirect costs) Expenditure type 56135 (which allows the Cost and Management Analysis group to segregate these costs for purposes of indirect cost calculation)
• If the overdraft is greater than $500 dollars the overdraft is transferred to a cost sharing PTA. Your OSR accountant can help you with this. 
• Explain reasons for the transfer. For example: Charges are legitimate project expenses, but funds were inadequate. This is accounted for in the same manner as cost sharing.

Document the Cost Transfer

Include all the necessary elements of a cost transfer justification, and, as appropriate, attach supporting documentation.  Cost transfers made after a project end date will be closely scrutinized. 

Note, late charges are generally not allowed and must be transferred to a cost sharing PTA unless the expense also benefited a non-sponsored award, in which case it can be transferred to the other benefiting non-sponsored account.  Only OSR or RAPC may authorize a transfer onto a sponsored PTA after six months with the concurrence of a school level approval. 

Click here for complete instructions for requesting exceptional approval for a late cost transfer.