Research Accounting
Collection Policy
Elec. Payments
Rsrch Acctg Mission
Letter of Credit
OPAS
Organ. Chart
Sponsor Types

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Research Receivables & Letter of Credit

Overview

LETTER OF CREDIT - (L/CR)

Payment for research performed at the University for most federal agencies is done through a letter of credit. The Controller's Office requests that cash be drawn down from the Federal Reserve, for deposit into a campus bank account. The amount drawn is based on actual expenditures by the grant/contract.

Organization and Function

The Research Receivables section reports to the Assistant Controller for Grants and Contracts. This section is staffed by one Accountant (Nadine Mazzard Wallace; phone 413-577-1233; fax 413-545-6088; e-mail nadinemw@admin.umass.edu) and by the Receivables Manager (Ann Koski phone 413-545-1117; fax 413-545-4233; e-mail akoski@admin.umass.edu). The function of this section is to:

  • Submit draws to the University Treasurer’s Office which, in turn, submits the draws to the appropriate agencies. After the funds arrive on campus, the Treasurer’s Office transfers the funds to the pertinent Letter of Credit (L/CR) control account.

  • Report expenditures to the appropriate agencies on or before the reporting deadlines and according to the agency’s reporting requirements.

  • Perform ongoing reconciliations of grant accounts to assure that authorized amounts, expenditures and receipts as shown on the letter of credit report, the University accounting system and on the individual grant report (Financial Status Report or Report of Cash Transactions) are in agreement.

  • Investigate and follow up on any letter of credit variances from funds drawn and what we are allowed to report.

  • Notify research accountants when research awards are due to close off letter of credit reports.

Scope
At this time,Research Receivables handles L/CR draws and reporting for three campuses: Amherst, Boston, and Worcester. By fiscal year 2002 each campus will be responsible for their own management of letter of credit.

The following agencies each have separate letter of credit accounts:
National Science Foundation (NSF)
Health and Human Services (HHS)
Department of Education (D/Ed) - (also under D/Ed are Direct Loan accounts)
Environmental Protection Agency (EPA)
US Information Agency (USIA)
National Aeronautic and Aerospace Administration (NASA)- (2 reporting centers)
Department of Energy (DOE) - (2 reporting centers)
U.S. Department of Agriculture (USDA) - (no sub- 2 reporting centers)
USDA - Extension Service [part of the Cooperative State Research, Education, and Extension Services (CSREES)]
USDA - Experiment Station [part of the Cooperative State Research, Education, and Extension Services (CSREES)]
US Geological Survey (USGS)
US Agency for International Development (USAID)

Frequency of Agency Reports:

  • No report: Dept of Education, CSREES Extension Service

  • Quarterly: NSF, HHS, NASA, USDA, USIA, DOE, USAID, USGS, and CSREES Experiment Station

  • Semi annually: EPA

Type of Federal Management Program:
Payment Management System (PMS):
USDA
HHS
DOE
USIA
US Aid
USGS

Other:
NSF- SF272 via FastLane
NASA- SF272
Dept of Educ- Grant Application Management System (GAPS)
EPA- SF272

Background Information
Many, but not all, grant accounts from the agencies listed above are paid by the L/CR method. Under this method, an automated journal entry (J.E.) is made to that agency’s control account each month-end for expenditures in the individual grant accounts; the entry code for these automatic entries is 068. The amount of the expenditure in the grant account is deducted from the cash in the control account and shown as a receipt on the grant account. Therefore, individual grant accounts will show a cash balance of zero even though the expended funds may not be drawn.

In anticipation of the month-end entry, draws are made during the month, usually twice a week for NSF and HHS accounts because of their large volume of expenditures. The receipts are deposited to the control account for that agency and the reconciliation between drawn amounts and reported amounts is completed either monthly or quarterly, depending on that agency’s requirements.

Financial Status Reports
The grant accountant is responsible for preparing the Financial Status Reports (FSRs) as required by each agency according to the requirements of the contract.

 

Controller's Office
Room 405 Goodell Building
University of Massachusetts Amherst
Tel:  (413) 545-0806
Fax: (413) 545-4233

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Last Updated: 10/09/09