Drawdowns

Policy Statement

Clarkson University Research Accounting/Controller’s Office is responsible for preparing and performing cash drawdowns for federally sponsored programs in accordance with Uniform Guidance 2 CFR 200.302 (Financial Management) and 200.305 (Federal Payment). Under the terms of certain awards with some federal agencies, the university can drawdown funds via electronic systems. The federal sponsoring agencies (e.g., NIH, NSF, USDA) authorize funds that meet the aggregate expenditure activity of the agency’s awards to the University.

Purpose of Policy

The purpose of this policy is to provide guidance and identify requirements of using LOC’s or other electronic payment mechanisms to drawdown federal funding.

Applicability

The specific requirements for cash management are unique to each federal program and are found in the laws, regulations, and the provisions of award agreements pertaining to the program. This policy identifies documentation required when cash requests for federal awards are paid through a Letter of Credit (LOC) financing system or other electronic payment mechanisms and is applicable to all Principal Investigators (PI’s) and administrators at Clarkson University within all schools, departments, institutes, and centers, who are involved with the administration of sponsored awards who must comply with this policy.

Procedures

The University submits a payment request for an identified group of federal awards when funds are needed for reimbursement of expenses. Amounts received under this method of payment are recorded directly to the applicable sponsored program revenue account. The University must not draw funds from the U.S. Treasury in excess of immediate needs or in excess of the limits for any award. Program costs must be paid for by University funds before reimbursement is requested from the Federal Government. SRS and the Controller’s Office must manage the cash position of the respective LOCs and other Federal drawdowns. The Draws are prepared based on the actual monthly expenditures that have posted to the general ledger. Supporting documentation for each draw will be reviewed and approved by the Associate Controller or Controller prior to submission. Once approval is granted the Research Accountant will submit and certify the drawdown.

Refunds to Sponsor

Any amounts drawn in excess of expenditures resulting in a positive cash balance, must be remitted to the federal government in a timely manner. Any interest earned on excess cash in excess of $250 per year is required to be remitted to DHHS.

Roles and Responsibilities

Research Accounting/Controller’s Office

  • Calculate correct amounts to be drawn down for each award and submit federal draws
  • Perform managerial review to approve all LOC and other federal draws on a monthly basis
  • Monitor the release of appropriated funds by sponsor and ensure federal compliance for cost sharing requirements are met before drawdowns
  • Ensure compliance with federal cash management requirements

Principle Investigators and Research Administrative Advisors

  • Make immediate corrections if expenditures exceed the budget for the award
  • Continuously monitor sponsored project expenditures

Procedures

Drawing Down Funds for Reimbursement of Expenses on Federal Awards

Awards from federal agencies are not paid in full or in advance at the time they are awarded to the University. Instead, the University is required to draw funds down from the federal agencies payment systems periodically to reimburse the University for its expenses on all of our federal grants.

The Research Accountant accesses the federal payment systems periodically to prepare cash drawdowns for reimbursement of expenditures on federal grants at the University. The Research Accountant receives a report on all sponsored projects. That list of grants can be used to run an expense detail report for the period of time that the reimbursement request is covering on a monthly schedule throughout the year. That list of grants can also be used to check that our records are up to date and accurate as far as award amounts and budgets are concerned.

The payment request amount is calculated as the difference between the Cumulative Expenses as of the end date of the month you are doing the drawdown for and the Cumulative Expenses as of the last day of the period the last drawdown was requested. This calculation is done each active award and the sum of all of the calculated payment requests is the total amount of the drawdown to be requested.

The payment calculations are reviewed and approved by either the Sr. Research Accountant, Associate Controller or Controller. In the event the Sr. Research Accountant prepares the drawdown, the Associate Controller or the Controller must review and approve prior to submission. After receiving approval, whoever initiated the drawdown will submit and certify the drawdown. In no circumstance, shall the preparer submit and certify without first obtaining approval from the Associate Controller or Controller.

Definitions

  • Draw-down (Draw) – accessing the payment website designed by the federal agency and transferring funds from the federal government account to the University’s account.
  • Letter of Credit (LOC) – an electronic method of payment for requesting reimbursement of expenditures aggregated by funding source.
  • Appropriation – money for a particular purpose: a sum of money that has been set aside from a budget, especially a government budget, for a specific purpose.

Regulatory References

  • OMB Uniform Guidance, 2CFR 200:302 and .305