Grants and Contract Administration

Effective Date: 07/01/95 Last Update 11/10

Policy Statement 15: Budget and Expenditure Reports

Availability and Purpose

A wide variety of Banner "budget and expenditure" reports provide financial data on each sponsored project. Information is available on-line on a daily basis, monthly through eprint reports, and ad hoc through ecubic queries available to Principal Investigators (PI) and Departmental Administrators (DA). The Banner website and the financial systems coordination website provide additional information on reports and other information for monitoring sponsored projects financial activities and (For sponsored projects, note especially the additional “research accounting queries” available on the systems coordination site.)
At a minimum, OGC recommends use of the FRIGITD on-line screen and the FRRGITD monthly e-print report for monitoring sponsored projects. These reports provide information on the project’s Approved Budget, Expenditures to Date, Outstanding Commitments/Encumbrances, and Budget Balance. All sponsored project funds are managed on a cumulative to date basis and expenditures roll over from fiscal year to fiscal year. The amounts reported are cumulative from the inception date of the fund.

Unencumbered Obligations

The Banner reports will not necessarily reflect all expenditures or outstanding obligations as of the report closing date. The Banner reports will only reflect transactions that have cleared/posted to the accounting system as of a specific time/date. Banner does not reflect future commitments for payroll/fringe. There may also be additional charges pending from recharge centers or subcontractors or other types of transactions in transit for processing (e.g., travel reimbursements, equipment invoice payments, etc).

In addition to the University’s Banner system, PIs/DAs should maintain additional internal mechanisms (such as spreadsheets) to track unencumbered obligations. Internal mechanisms will be needed to ensure that all costs have been posted or are in transit (are not missing) and to use for projected budget balances to avoid over or under-expenditures. Both under- and over-expenditure issues could lead to management findings or disallowed costs.

It is the PIs/DAs responsibility to ensure that the project is adequately tracking committed expenditures on an actual and projection/encumbrance basis (that may not always be reflected in Banner due to timing issues). The internal tracking should reconcile to the Banner reports.

Use of Report

The "budget and expenditure" reports should be reviewed at least monthly and used for the on-going financial management process for each award; until final closeout. Fund balances should be continuously evaluated in regard to expenditure trends, new or continuing requirements, remaining project period, etc. Under the UNC FIT* requirements, PIs/DAs should maintain documentation of internal procedures that show that expenditure details and the overall status of the fund balance is reviewed on a monthly basis.

Every attempt should be made to ensure that only appropriate and allowable costs, within the budget availability, are processed against a sponsored project. Occasionally errors may occur in the accounting transactions or budget projections. When these do occur, prompt action should be taken to process corrections or to curtail additional project costs.

All necessary accounting corrections (cost transfers) should be made as soon as possible but by no later than 90-days from the date the original cost was incurred. Awards should not be managed primarily by cost transfer. Large numbers of cost transfers could be an indicator of inadequate oversight and might lead to a management or audit finding. Late transfers may be disallowed.

Budgets should not be overdrawn with the intent of making adjustments at a later date. This imposes an unnecessary administrative burden on all levels of the University, necessitates retroactive adjustments subject to additional compliance and audit requirements, and exposes the University to potential audit findings and cost disallowances.

While it is not expected that award budgets will be spent evenly, or on a 1/12 per month basis, another part of the budget oversight process is to review the “burn rate” for an award. Large deviations (under or over) should be reviewed for reasonable cause and/or corrective action.
Example: It would be unusual and a possible indicator of a problem if the award period is 50% complete but expenditures are either at 25% or 90% of the budget.

Large expenditures in the last few months of the award period are especially subject to audit scrutiny. Some types of transactions may not be allowed in the last 60-30 days of the award period (e.g., equipment purchases).

Necessary projected expenses and budget balances should be reviewed throughout the budget period; not just in the last quarter of the award.


PIs should normally communicate/coordinate with their DA for assistance and information/action on the accounting transactions and the projected budget balance for their award. The DA will have more comprehensive information about pending or planned transactions and internal practices than will OGC. OGC will only have information on transactions already posted to the institutional system and/or as conveyed to us by the PI/DA.

OGC staff do not provide routine accounting services or management for the fund; those activities take place at the departmental level. The PI and DA are responsible for the day-to-day management of the award fund. OGC staff are primarily responsible for other duties related to institutional oversight aspects of the award. OGC staff will provide advice/assistance, whenever possible, but primary responsibility is with the PI/DA to ensure that transactions are accurate and timely and that the budget balance is being appropriately monitored. OGC staff may not be able to provide detailed assistance and/or may not be able to provide assistance at the moment requested; due to other institutional priorities and deadlines for the office.

Contact your OGC representative if you have any questions about the budget and expenditure reports or for additional information on Banner reports we recommend for management of sponsored projects. The OGC staff assignment listing is located on the OGC website