|
|
|
PURCHASES AT THE END OF BUDGET AND PROJECT PERIODS
For a purchase to be included in a specific budget period, a purchase order must have been written before the budget period has ended. This procedure is important in the case of an NIH Program Project, for example, or any other awards that do not extend automatic carry-forward authority to the University.
A number of federal agencies restrict the purchase of equipment in the last ninety days of a project. This limitation refers to the end of the overall project duration and not to a budget period (e.g., year 1 of a three year project). The basis for this restriction is that the cost of the equipment would not be justified in terms of the direct benefit to the sponsored project.
Therefore, special consideration should be given to the last year of a sponsored project. Even though a purchase order has been written, the amount should be paid within ninety days of the end date of the project. If it does not appear likely that payment will be made in this period, a no cost time extension should be requested.
While federal guidelines are not as specific in regard to other purchases, similar consideration should be taken in determining allowability of all costs on a federal project. The "commitment" to the project is not established until an actual purchase order has been written to a vendor, or a "notice of commitment" has been enacted between the Purchasing Office and a vendor. The submission of a requisition by a department to Purchasing does not represent a commitment, as viewed by federal auditors. Submission of a requisition on a confirming order may be viewed more sympathetically by auditors. However, it is important to remember that, based on Section 507.1 of the Standard Practice Guide, only the Purchasing Office is authorized to make procurement commitments on behalf of the University.
As the end of a project is approached, the appropriate Federal Fund coordinator and Purchasing should be contacted to ensure this process is completed as quickly and smoothly as possible. It is important for the University to follow these procedures and guidelines, especially as more detailed reviews of University expenditures by federal authorities become more and more prevalent.