Cost Reimbursable agreements for sponsored projects are the most common type of agreement which we receive at ANR. In these agreements the sponsor reimburses ANR, usually in arrears, for actual allowable and allocable costs incurred in the performance of a project. The agreement should identify a not-to-exceed amount and the budget should clearly detail the intended use of the funds to help define appropriate and allowable expenditures. At the end of the project the sponsor expects us to submit a final financial report detailing actual project expenditures and, if applicable, a refund of unused funds.
Fixed price agreements, on the other hand, have a set value that will be paid generally based on completed deliverables. Upon successful completion of the deliverables, the sponsor will only be obligated to pay the contracted amount, even if the actual expenditures exceed this amount. These excess costs would need to be covered by the PIs via a discretionary fund source. However, if there are funds remaining after all deliverables have been met, these unspent funds will be retained by the University and may be transferred into a Research and Education (R&E) Account for the PIs continued research/programmatic efforts.
The proposed budget in a fixed price agreement should be within a reasonable range of actual anticipated expenditures. ANR should not be generating a profit from externally funded activities, but rather break even in order to fully cover costs. Balances over 20% require a justification and approval from the County or REC Director or your department head before the excess costs can be transferred into R&E accounts.
Thank you.
Kathleen Nolan, Director, ANR Office of Contracts & Grants (OCG)