Revenue and Accounts Receivable Collections

Overview

On a monthly basis, Contracts and Grants Accounting (CGA) invoices agencies for amounts owed on the university's contracts and grants in accordance with the terms of the agreement. Many of the awards have different billing terms, hence the accounts receivable balance can vary throughout the year. Amounts due to the university at any one time range from $25 to $50 million.

To effectively manage the resources of the university, CGA works with the agencies to assist the agencies in paying on time, hence meeting their contractual obligations to the university, along with accounting for these receipts. In addition, CGA works with the Principal Investigators (PI) and the departments in coordinating collection activities to promote on-time payment for amounts due to the university.

Billing Procedures

Invoices are prepared based on the terms negotiated in the award agreement such as monthly cost reimbursable basis, fixed amounts, payment schedule, etc.

When an invoice is generated, the invoiced amount is posted to the following general ledger accounts:

  • Debit: Accounts Receivable a/c (12xxx)
  • Credit: Revenue a/c (4xxxx)

For example, a $1,000 invoice billed for a Private Grant will post to the following chartstrings:

Debit:

BUAccountFundDept IDAmount
10000 12330 93499 00510 1000

Credit:

BUAccountFundDept IDAmount
10000 44100 Award Fund number Department ID number 1000

Hence, running Cal Answers reports by the revenue account and the award fund number shows the total amount of invoices recorded for the specific fund or award. The department can view revenue and invoicing transactions in Cal Answers by the individual fund using the following accounts:

AgencyRevenue Account
State Agencies 41200
Federal Grants 42100
Federal Contracts 42200
Local Government 43100
Private Grants 44100
Private Contracts (Includes Flow-Through funds) 44200

For cost reimbursable agreements, if a fund or award is in overdraft, it will not be billed, however, when the overdraft is cleared, billing will resume. Cost reimbursable invoices have to be supported by a breakdown of expenses by major cost category (when the award is in overdraft the billing system cannot identify which cost category will be reduced to clear the overdraft). To enable the university to bill agencies on a regular basis, departments need to clear overdrafts on a timely basis.

The final invoice includes any accrued expenses included on the department's closeout statement. The final invoice will be prepared within 90 days following the termination of the award.

All receivable balances are posted to six generic funds as opposed to the individual fund relating to the award. This allows the individual award or fund to be inactivated in the General Ledger even though there may be an outstanding receivable amount. All information with regard to the outstanding receivable at the award level will be retained in the subsidiary AR system. This detailed information is currently not available at the award level in Cal Answers. Please refer to the Collection Procedures section for details on the accounts receivable reports available to the department.

The receivables balances are posted to the following funds:

AgencyFund
State 77999
Federal Grants 30499
Federal Contracts 27499
Local Government 77499
Private Grants 93499
Private Contracts 96499

If a department sees problems in the billings, please contact the award analyst responsible for the award or the CGA team lead as soon as possible. They can then review the situation to ensure we bill the agencies timely and accurately.

Collection Procedures

  • CGA collection staff on a daily basis pursues collection of amounts owed by sponsoring agencies to the university
    • Contact with the agency is primarily by phone or e-mail
    • Key agency officials as identified in the award document are the main point of contact
  • CGA sends out reminder letters to sponsoring agencies on unpaid invoices 45 days past due
    • The letters are sent for each award (fund number)
  • Monthly, CGA prepares a report of all amounts over 60 days past due
    • This information is sorted by the primary org code for the award
    • This report is sent to each Department Manager responsible for the primary org
    • The Department Manager should share this information with the PI ensuring all relevant parties are aware of large overdue amounts owed to the university
    • If the PI or other departmental staff have information (for example: pertinent conversations or correspondence with key agency officials, contacts at the agency who may expedite payment, etc.) with regards to assisting in the collection of the amounts due, please advise the CGA collections staff
  • Monthly, CGA prepares a report of all amounts due to the university that are being withheld due to either pending technical reports for the agency or contractual disputes with the agency
    • A list of these items are forwarded to the Sponsored Project Office (SPO), who work with the PI to take care of these outstanding items
  • If the university has met all its contractual obligations, and the agency will not pay, overdue accounts will be passed over to a collection agency and the legal department to pursue recovery of the amounts owed

Central Responsibilities

Collection of Contract and Grants accounts receivable (i.e., amounts billed to sponsoring agencies for which we have not been paid) is considered a shared responsibility between CGA and the departments.

Department Responsibilities

The Department Manager should keep the PI and other relevant research staff informed of the status on large overdue accounts. The PI and Department Manager should advise the CGA collections staff of any pertinent collection information. It is important for CGA collections staff to be informed in a timely manner of agencies encountering financial difficulties which will affect their ability to pay the university. This will enable the university to take other courses of action in collection of the amounts due and the administration of the award.

Invoicing of awards is the primary responsibility of CGA. However, the department can review and run Cal Answers reports including the 4XXXX (Revenue) account to view billings and invoices for the award. All invoices are posted to the primary org for the award.

Please note: If you do not have Cal Answers access for the primary org, all Cal Answers users have global access to the Fund Balance report. If a department is aware of an invoicing issue, please contact the CGA award analyst responsible for the award as soon as possible.

During the performance period of an award, CGA will not invoice the agency for any cost reimbursable awards in an overdraft position. A hold is placed on billing the award until the department clears the overdraft. Once the overdraft is cleared, billing will commence in the month following the clearance of the overdraft. It is essential to clear these overdrafts as soon as possible - any costs incurred since the prior period billed will not be invoiced until the overdraft is cleared. The only time CGA will invoice a cost reimbursable award in an overdraft position is when preparing a final bill as part of the close out process. To ensure the correct expenditure categories are recorded on the final bill, CGA requires the closeout concurrence from the department to indicate which accounts will be cleared or adjusted, as CGA cannot prepare the invoice using the amounts recorded in the ledger whilst the fund is in an overdraft position.

Uncollectible Accounts

The following details the accounting treatment of amounts identified as uncollectible:

  • Uncollectible extramurally-funded awards arising from:
    • Non-performance issues, including the failure of the Principal Investigator (PI) to prepare interim and final reports or overspending by the PI
    • Administrative issues and late ledger entries or adjustments resulting in late or inaccurate billing
    • Amounts will be charged to the department
  • Uncollectible extramurally funded awards, where the university has met all its contractual requirements:
    • The nonpayment may arise from the third party having insufficient funds to meet its commitment or for other reasons resulting in the university not being reimbursed for amounts due
    • Amounts will be charged or written off according to the campus policy

Contact

AR Help Desk

Email

CGA_ar_help@berkeley.edu

Contracts and Grants Accounting (CGA)

Fax

510 643 8997