Letter of Credit
For awards where Harvard requests payment via Letter of Credit (LOC) drawdowns, the OSP Cash Team allocates income to each account string based on the expenses posted to that account. The Cash Team cannot draw more income than the obligated award amount. Upon award closeout, the Cash Team processes a final drawdown based on the Final Figure(s) for the project. Once the Cash Team receives the payment, they allocate income to offset the final figure.
Non-Letter of Credit
For non-LOC awards, sponsored income posts to the current year’s Main account. The OSP Cash Team posts sponsored income for Federal Funds (100000-199999) and Non-Federal Contracts (2000000-249999). For payments to Non-Federal Grants (2500000-299999), the OSP Cash Team reviews and identifies the associated sponsored project and notifies Alumni & Development Services for tracking and allocating the income to the Main account.
When OSP Research Finance completes a final financial deliverable or close-out review, the Financial Analyst processes a journal to re-allocate income from the Main account to any Part-of or Subaward accounts. The Final Figure amount indicates the amount of income for allocation.
The Financial Analyst reconciles unspent income by either:
- Processing a refund to the sponsor
- Posting a journal entry to re-allocate the balance to the next year of the project, if there are no carryforward restrictions
- Posting a journal to transfer the balance to a departmental account per the Fixed Price Guidance
The treatment of unspent balances varies by the terms and conditions of the sponsor.