Annual Contract & Grant Deficit Clearing Process

[Accounting and Fiscal Services]

Contracts & Grants Accounting Annual Contract & Grant Deficit Clearing Process This month, UC Irvine will begin the annual process of clearing deficits on all awards that ended in the prior fiscal year. Any award that ended in FY 2025 and was still in deficit as of March 31, 2026, is significantly past the usual 120-day window for clearing deficits. These deficits must be addressed promptly to ensure UC Irvine can accurately report financial data and avoid other fiscal impacts.   What Causes Deficits? For sponsored research funds, a deficit is defined as the amount by which final cumulative expenditures exceed the budget amount after final reconciliation by Contracts & Grants Accounting (CGA). This can be caused by:   Expenditures beyond the authorized amount by the sponsor Non-payment by the sponsor even if expenditures are within original authorized amount Untimely posting of expenses at the end of the award or during a restricted budget period when CGA may only bill or draw cash for the final expenses per ledger.   How are Deficits Normally Cleared? During the life of an award, departments are responsible for moving specific payroll and non-payroll expenses that are the cause of the overspending from the award to another department funding source. After project ends, deficits are expected to be cleared by departments within 120 days of the award end date. If a fund is expecting an amendment or pending final transactions at 120 days, Departments need to inform their CGA accountant.   Annual Process for Clearing Deficits Deficits on expired awards that were not addressed using the normal means described above will be cleared using a process created by the campus Research Compliance Assessment Workgroup (RCAW). The steps below have been approved by the Office of Research and Division of Finance and Administration.   March 31: Any awards that ended in the prior fiscal year and remain in a deficit on March 31 of the current year (i.e., 270 calendar days or longer in deficit) will be cleared starting in April. This will ensure they are cleared in time for fiscal year-end close, ensuring financial reporting accuracy. April 15: The Assistant Dean of each school will be provided with a list of awards requiring a deficit clearing by April 15.  April 30: Beginning on April 30, all deficits will be cleared by transferring direct expenses on C&G accounts to their continuation accounts. May 31: A detailed list of transfers and affected continuation accounts will be provided to each school by May 31. This will allow for all entries to be completed before the end of June.   Have Questions? Information about the new deficit clearing process is available on the CGA website. If you have any questions about your awards or need help with clearing deficits, please contact your assigned CGA accountant.

UC Irvine Accounting & Fiscal Services 228 Aldrich Hall | Irvine, CA 92697-1050 | accounting.uci.edu

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