The University prefers not to accept fixed-price contracts as they pose a greater financial risk than cost-reimbursable contracts. In instances where fixed-price contracts are accepted, the following procedure is followed at the contract end:
- Ninety (90) days after the contract ends and it has been ascertained that all charges have cleared, the Principal Investigator is asked by Accounting for a "3" account into which the residual funds, LESS INDIRECT, will be transferred. Indirect is deducted prior to the transfer of residual funds because the proposal and award were made based on estimated costs, including indirect costs. Indirect costs are incurred regardless of the accounts from which these funds are expended and they must be reimbursed.
- If a fixed-price contract account has an over-run at the end of the contract period, the fiscally responsible organization must cover this over-run. Contract and Grant Accounting will contact the P.I. about clearing this over-run.
- If, at the end of the contract period, the residual amount is in excess of ten (10%) percent of the original contract amount, the Principal Investigator must submit a justification and a transfer approval request to the Research Administrator prior to transfer of the residual funds to a "3" account. Lack of significant expenditure on a fixed-price contract account causes the auditors to question the accuracy of the proposal pricing or investigator which accounts were possibly charged for the work instead of the fixed-price account.