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Collections and Write Off Procedures for Sponsored Research Invoices

Last Updated: September 27, 2021 12:03:31 PM PDT
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Learn about procedures for sponsored research invoices that require a write off.

Many of UCSD's research awards are invoiced which means that in accepting these awards there is a risk that we may not receive reimbursement according to the award contract. Although a write off situation is rare with invoiced research awards, the information below sets forth SPF and department responsibilities in managing awards together, in particular the collection process and write off process.

Situation examples that may result in bad debt:

  • Contractual issues: agency not paying because they feel our PI did not do something when our PI feels he/she did
  • Invoice backup documents needed such as DOPES, ledgers, etc.
  • Untimely submission of invoices
  • Sponsor bankruptcy/out of business
  • Sponsor spending federal funds elsewhere instead of reimbursing UCSD
  • UCSD PI did not fulfill obligations
  • Email communications not supported by contract

High Risk Awards:

Research awards from foreign sponsors are deemed high risk. Additional reporting has been put in place for monitoring.

Collections Responsibilities:

    Departments:

  •  Work with OCGA to ensure clear billing terms and conditions prior to agreement on the award. Try to get payment in full up front
  • Work with PI to ensure that he/she submits all necessary reports and documentation such as progress reports so payments are not delayed
  • Monitor outstanding invoices (Accounts Receivable) using the General Ledger Trial Balance, General Ledger Transaction and/or the AR Aging report in Financial Link
  • Ask your SPF accountant or use the Document Lookup Tool for any correspondence regarding Accounts Receivable (AR)
  • If there is outstanding AR, work with your PI to slow/stop work until payment resolution
    SPF:
  • Create and submit invoices timely and according to the terms and conditions of the award
  • Follow up by 60 days outstanding with the sponsor
  • Communicate regularly with department if any potential payment issues
  • Escalate as needed
  • Process write off/ bad debt entries
  • Quarterly report of potential issues on AR > 180 days on the AR Aging Report to the Controller’s Office
  • Report of foreign sponsors with AR > 120 days provided to OCGA

60 -119 Days outstanding:

The SPF Accountant will be in contact with the sponsor for payment resolution.  In addition, they will inform the department fund manager of the award of delinquent payment.

 Accountant will continue to:

  1. Attempt resolution at least monthly
  2. Document collection attempts in iDocs (Department Award Lookup Tool)
  3. Document reasons why they are not paying (if they respond)
  4. If everything required by the agency has been provided in terms of copies of invoices, backup, etc. and the sponsor is still not paying, the Accountant will escalate to their Associate Director.  This should be done by the time the debt is 120 days old

120 Days outstanding:

SPF Associate Director will then:

  1. Attempt collections from the agency by contacting the agency management.  The Associate Director will use professional judgment for whom to call and will ensure that proper backup documentation has been gathered to effectively communicate with the sponsor
  2. Will inform SPF Director as needed through a Quarterly AR Aging Report
  3. Will inform department Fiscal Manager/MSO of situation
  4. It is the department’s responsibility to inform the Principal Investigator, the Department Chair as appropriate
  5. May inform OCGA for contract assistance
  6. OCGA/SPF may contact UCOP and/or General Counsel for further assistance

180 Days outstanding

SPF Director will then:

  1.  Attempt collections from the agency by contacting the agency management.  The Director will use professional judgment for whom to call
  2. Will provide quarterly reporting to Controller covering AR status highlighting high risk awards and items that need executive action
  3. Controller will inform the VC and or Dean

240 Days outstanding (or when determined uncollectible)

If the debt appears uncollectible (bankruptcy, or standstill with agency) and award is ended:

  1. SPF will inform the department of non-payment
  2. SPF will process credit memos to clear the AR from ISIS
  3. SPF will deallocate the fund/award to equal payments received
  4. SPF will prepare a summary memo of the situation and rationale for deeming AR uncollectible for the department and then to pursue further actions as determined by the Controller
    1. Summary memo will include:
      1. Age of outstanding AR
      2. Amount of AR
      3. Amount of Direct Costs to be written off
      4. Steps taken to resolve outstanding AR
      5. Request to move off the bad debt balance
    2. SPF will follow the Sponsored Research Deficit procedures [https://blink.ucsd.edu/finance/awards/managing/sponsored/Managing%20Deficit.html]
Find answers, request services, or get help from our team at the UC San Diego Services & Support portal.

Note: this page has a friendly link that's easy to remember: http://blink.ucsd.edu/go/collections