Federal Awards: The government shutdown was averted on September 30th due to a stopgap agreement that is in place through November 17th. At that time, the federal government may again face the possibility of a shutdown. We will continue to monitor the situation and share guidance as it is received.
The most important action for Northwestern’s research activity is to spend federal funds according to plan to ensure funds can be drawn timely. The current pace of expenditures has drawn the attention of federal agencies, as noted previously. Spending that does not match the budget plan has two significant consequences:
1) Reporting red flags: ASRSP can only report expenditures that have posted; if funds are not spent, reports will reflect unobligated balances. Northwestern has received inquiries regarding spending lags from federal sponsors, some including requests for reports of burn rates.
2) Carryover requests at risk: Requests to carry over large amounts of funding are being denied more frequently. Across agencies, sponsors are disinclined to permit carrying over funds when there is a spending lag (as evidenced in reporting). Denial of a carryover request may result in the loss of the unobligated balance.
Single Audit: The FY23 Single Audit is underway, focusing on Student Financial Aid and FEMA (Federal Emergency Management Agency) funding, which was provided to universities for COVID mitigation efforts.
The FY24 Single Audit is expected to focus on research and development (R&D). That means sponsored research activity will be reviewed with primary focus on evidence of internal controls; adherence to policies, procedures, and terms and conditions of the sponsored award; cost allowability; and proper documentation. Each transaction should be considered auditable. Please consider the following best practices for each transaction:
* Test allowability (consider the cost principles: reasonable, allowable/permitted, allocable, consistently treated)
* Prepare comprehensive documentation
* Retain evidence of transaction review and approval
* Reconcile accounts monthly
* Resolve overdrafts
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