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Entries at the End of an Award Period for Restricted Funds

Restricted fund accounts do not reflect the University’s fiscal period. This is because the majority of restricted funds are research awards and for these the fiscal period is the award period.

In most cases the award period coincides with the sponsor’s fiscal year. For example, the award period for awards from the Federal Government research councils is April through March, the fiscal year of the federal government.

Of course, the financial activity in restricted funds is included in the University’s annual financial statements and, as a result, the year-end procedures designed to ensure the full and accurate reporting of income and expense also apply to restricted funds.

However, the fiscal year account administration for restricted fund accounts is based on the award (grant or contract) period and the external sponsor’s policies on the carry forward of underspending.

 

Account administration at the end of an award period

The objectives are similar to those carried out for the operating fund:

  • to ensure that all expenses for the award period are recorded prior to preparation of the financial report to the sponsor for the period
  • where an award is continuing into another year, to adjust the accounts to reflect the sponsor’s carryforward policy with respect to underspending in the current year
  • to clear the account of budgets and expenses for the fiscal period after reporting on that period is completed

The section Reporting to Sponsors addresses these objectives.

 

Sponsor Carry forward rules

Sponsors have three possible types of carry forward rules:

Total carry forward
When the sponsor allows the carry forward of all unspent funds, the amount of budget removed from the account equals the year-to-date expenses removed from the account.
Partial carry forward
When the sponsor allows the carry forward of under-spending only in an amount sufficient to cover outstanding purchase order commitments, the amount of budget removed from the account equals the total budget less the outstanding commitments.
No carry forward
When the sponsor allows no carry forward of under-spending, the total budget is removed from the account.

Clearing mechanics

For the CIHR, NSERC, and SSHRC, the annual reports and the clearing entries are prepared systematically. i.e. the reports are prepared in March and the clearing entries in April

 

Last revision November 2015