Cost Reimbursable and Fixed Price
Cost Reimbursable Awards - The sponsor is invoiced based on actual costs expended by the University at the time of invoicing. However, the costs cannot exceed the award amount. Any excess of spending over the award amount will be the responsibility of the college/unit. The frequency of invoicing is based on the terms of the award (e.g., monthly, quarterly, semi-annually, or annually, or other specified times). When the agreement is completed and Research Accounting has received an Account Closeout and Extension form (ACE) to close that award account, a final invoice will be prepared and issued for the balance due. More information on Industry-sponsored Cost Reimbursable Agreements is here.
Fixed Price Awards - The sponsor will pay the University an agreed amount for a deliverable(s), irrespective of the costs incurred by the researcher. If the costs incurred are more than the award amount, the cost overrun will have to be borne by the researcher’s college/unit. Actual project costs will not be reported to the sponsor. The sponsor is invoiced based on a pre-determined schedule, which is usually included with the award document. The payment schedule can be based on specific dates or milestones/deliverables. In the case of specific dates, Research Accounting will proceed to invoice based on the dates. However, the college/unit needs to advise Research Accounting when the invoice is triggered by milestones/deliverables. If there is a residual balance (income exceeds expenditures), the department may be eligible to retain these funds, per Finalization and Closure (RA90). The indirect portion must be transferred to the central indirect cost income account using the overhead rate on the award as indicated in IBIS.
When the agreement is completed the college/unit will send Research Accounting an ACE form to close that award account. Depending on the invoicing terms, a final invoice may not be necessary since invoicing is done on a pre-determined basis.
A template for an Industry-sponsored Fixed Price Agreement is here.
An FAQ for Fixed-Price Agrements - Residual Balance is here.