Subject:  Deposit of Funds on Contract and Grant Accounts No.        93-1
Date:    June 3, 1993

(Note: This Important Notice is being sent to Account Managers, Chairpersons, Deans and Chancellors. Please forward to others who have a need to know.)

A responsibility of FMS-Contract and Grant Administration is to insure correct and expedient deposit of funds into sponsored program accounts. All awards processed by the research offices indicate that checks are to be sent to Indiana University, P.O. Box 1847, Bloomington, Indiana 47402, but occasionally an agency will send a payment directly to the Project Director. We ask that in such cases these checks for contract and grant accounts, along with any accompanying correspondence, be forwarded upon receipt to FMS, Contract and Grant Administration, Poplars Building, Room 434, Bloomington. The account number to which the payment should be deposited should be indicated, if known. Upon receipt in Contract and Grant Administration, the checks will be entered in a check log for tracking purposes, a Cash Receipts Voucher will be prepared, and the funds will be deposited within twenty-four hours.

A number of problems arise when the above procedure is not followed including:

  1. An incorrect income class (object code) could be used by a department depositing a check that would generate negative indirect costs in error on the deposit. Contract and Grant Administration uses certain object codes for institutional reporting purposes. This is especially true on federal accounts that are financed by Lines of Credit. Incorrect income classes can cause problems in reconciling the Line of Credit, which may contain as many as several hundred accounts.
  2. An incorrect account number could be used which could distort the amount that is to be invoiced by Contract and Grant Administration staff on certain cost reimbursable accounts.
  3. A payment may be for additional funds, over and above the current account budget. This would require that a route sheet, budget for extra funds, and in some cases a formal amendment from the agency be submitted to the appropriate research office to facilitate the proper recording into the award system.
  4. A check may be improperly made payable to the Project Director instead of to Indiana University. At the close of the year, that Project Director could receive a 1099 Miscellaneous Income Form from the agency, making him liable for personal income on that payment.