Cash Surplus and Cash Deficit Procedure

The Office of Sponsored Projects (OSP) considers cash surpluses and cash deficits of $100.00 or less on closed awards to be immaterial. Any award that has a cash surplus or a cash deficit cannot be closed. To expedite close out, OSP staff will perform journal entries necessary to eliminate cash surpluses and cash deficits for sponsored projects.

Cash Surplus

When a nongovernment sponsor does not provide instructions to return a cash surplus of $100.00 or less, OSP credits the surplus to the Principal Investigator's unrestricted unit fund using a journal entry. If the cash surplus is interest, however, it is credited to the Institution's general fund as required by Smithsonian Directive 309. The journal entry eliminates the cash surplus and records the transaction on the financial report issued to the sponsor.
For government awards, regulations require OSP to return small cash surpluses. The reasons for returning balances on government awards are noted in the OSP Handbook under Procedure for Federal Advances, in OMB Circular A-110, in Smithsonian Directive 309, and in an audit finding issued by the Defense Contractors Audit Agency.

Cash Deficit

OSP uses a journal entry to charge cash deficits from nongovernment and government awards to the Principal Investigator's or the unit's unrestricted fund. The journal entry aligns the expenditures with the revenue received from the sponsor and produces a net balance of zero.

 

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