The University Record, December 5, 1995

Unspent grant funds worry federal agencies

Several federal agencies have voiced concern that principal investigators (PIs) finished the federal fiscal year without spending a significant portion of grant funds budgeted for FY 95. At issue: the unexpended balances can lead to a reduction by Congress of their annual appropriations at the same time the agencies strive to preserve the appropriations in the face of sweeping budget cuts.

For instance, a recent message from the Office of Naval Research (ONR) to researchers with ONR grants noted that many PIs are "spending funds more slowly, and over a longer time period, than they proposed to do in their proposals. It is not unusual to find grants that haven't spent any current fiscal year funds during the entire current fiscal year. Many other grants are spending only modest percentages of funds during the year for which funds were allotted."

ONR points out that unspent funds from one fiscal year carry over to the next fiscal year with the assumption that these funds will never be spent as originally proposed. Congress looks at these carryovers as a way to reduce the amount of "new" money that must be appropriated to an agency budget.

"For example, if ONR principal investigators are sitting on $100 million of FY 95 funds as of Oct. 1, 1995 (start of FY 96), then the FY 96 appropriation to ONR can be reduced by $100 million."

Financial Operations has stepped up efforts to bill federal agencies on a timely basis, in accordance with the terms and conditions of the award. PIs can assist in these efforts in several ways.

Prompt initiation of personnel changes (submission of turnaround documents), for example, will help ensure that salary charges to sponsored projects are recorded within the appropriate billing periods. Other transactions against project accounts, including expenditure transfers, should be processed as soon as possible within the appropriate billing period.

If you have suggestions or questions regarding these issues, contact Alan Steiss, director of the Division of Research Development and Administration (DRDA), or the DRDA project representative who serves as the liaison with federal agency sponsoring your research.

Reprinted from the DRDA Reporter, Nov. 13, 1995