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Procedure: Research Office

Research Office Accounts Receivable Monitoring, Collections and Write-offs Procedure

  1. OVERVIEW
    The University of Delaware is responsible for requesting and collecting funds related to externally sponsored grants and contracts. Ensuring timely receipt of these funds is an important function of the Research Office Billing Team in close coordination with Principal Investigators (PIs), Department/College Administrators, other central administrative offices, and sponsors.

    The Research Office Billing Team completes billing and collections activities for sponsored research programs. These activities are conducted in accordance with sponsor payment terms set forth in contractual agreements. Contractual payment terms generally require the University to submit invoices or cash drawdowns for payment by the sponsor. While the University receives most sponsor payments reliably, there are scenarios which may place receivables at-risk for nonpayment. Common scenarios which require extra attention from the Research Office include:

    • Issues or questions identified with a submitted invoice. Such instances typically require support documentation or a revised invoice be provided to the sponsor.
    • Incorrect or outdated sponsor billing contacts and/or address information. Such instances require follow-up to ensure invoices reach the correct sponsor contact/office for payment.
    • Unwillingness or inability of a sponsor to fulfill their obligation to pay the University in accordance with contractual payment terms. Such instances require internal escalation and may result in a stop work order depending on risk factors involved.

    The goal of this procedure is to minimize financial loss resulting from uncollectible accounts receivables for sponsored research programs at the University. As such, this procedure sets forth guidance for the Research Office Billing Team to proactively:

    • Monitor and collect outstanding accounts receivables in a consistent, timely manner.
    • Write-off accounts receivables balances deemed uncollectible by the University.
  2. DEFINITIONS
    1. Invoice or Cash Drawdown: A formal billing statement requesting a sponsor pay the University in accordance with contractual payment terms.
    2. Accounts Receivables (AR): A monetary balance owed to the University by means of an invoice or cash drawdown. Any unpaid accounts receivables are considered “outstanding”.
    3. AR Aging Report: A list of outstanding accounts receivables categorized by age (total days old) in the University’s financial system. Regular AR aging reports are generated for review:
      1. Monthly for the Research Office Billing Team
      2. Quarterly for the Research Office and Finance
      3. Semi-Annually for the Board of Trustees Finance Committee
    4. AR Monitoring: Administrative activity related to regular review and tracking of outstanding accounts receivables.
    5. Dunning Letter: A formal notice sent to the sponsor requesting payment for outstanding accounts receivables.
    6. Uncollectible AR Balances: Outstanding accounts receivables balances which have virtually no chance of being paid by the sponsor.
      1. The University designates balances as uncollectible after thorough collections efforts have made without receipt of payment from the sponsor.
    7. AR Write-Off: The process of removing uncollectible AR balances from University financials.
  3. RESPONSIBLE PARTIES
    All University faculty and staff who are responsible for administering externally sponsored grants and contracts should be familiar with this procedure.

    The Research Office Billing Team (Billing Coordinators and the Assistant Director of Billing and Receivables) manages billing, collections, and write-off activities for all sponsored projects in close coordination with other central offices, PIs, and departments/colleges. Specific roles and responsibilities are outlined in the matrix below:

     

    Accounts Receivable Monitoring, Collections, and Write-offs Procedure

    Responsible Party
    P = Primary, S = Secondary, O = Oversight, I = Input

    Research Office

    Departments/Colleges

    Action

    Billing Coordinators

    Assistant Director of Billing and Receivables

    Department/ College
    Administrators

    Principal Investigators

    Complete invoices and cash drawdowns per payment terms in the award agreement

    P

    P, O

    I

    I

    Monitor outstanding accounts receivables via the AR Aging Report

    S

    P

    I

    I

    Follow-up with sponsors to determine payment status of outstanding AR

    P

    S, O

    S

    I

    Send Dunning Letter(s) to request payment from sponsors for outstanding AR

    P

    S, O

    I

    I

    Escalate outstanding AR to other individuals (ex: AVP Research Administration, Deans, General Counsel, Finance)

    S

    P

    I

    I

    Complete write-offs for uncollectible AR balances in coordination with other central offices/leadership

    I

    P

    I

    I

     

  4. PROCEDURE GUIDANCE
    Accounts receivables monitoring, collections, and write-off activities will occur per steps outlined in the timeline below, based on the aging category of outstanding receivables. It is critical that communications from the Research Office, PIs, and departments/colleges be both timely and consistent with the steps below to realize high collection rates and maintain a positive working relationship with the sponsor. Below is a standard timeline to guide these activities:

     

    Aging Category

    Collection Resolution Steps

    30 days
    Current AR

    No collections action is required for AR items outstanding for 30-days or less, as these are considered current by the University.

    31-90 days
    Billing Coordinator Follows-Up via Email

    Billing Coordinators will:

    • Include past due amounts on subsequent invoices.
    • Request the sponsor provide payment status for all outstanding AR items when submitting subsequent invoices for payment.
    • Document collections efforts and sponsor correspondence via receivables comments in the University Financial System.

    The Assistant Director of Billing and Receivables will:

    • Review outstanding AR collections via the monthly AR Aging Report.

    91-120 days
    Billing Coordinator Follows-Up via Email, Phone, and Dunning Letter

    Billing Coordinators will:

    • Include past due amounts on subsequent invoices.
    • Request the sponsor provide payment status for all outstanding AR items when submitting subsequent invoices for payment.
    • Take additional steps to contact the sponsor via phone calls, follow-up emails, and other contact points.
    • If 2-4 weeks pass by and no response is received regarding outstanding items, issue a Dunning Letter to formally request sponsor payment.
    • Document collections efforts and sponsor correspondence via receivables comments in the University Financial System.

    The Assistant Director of Billing and Receivables will:

    • Review outstanding AR collections via the monthly AR Aging Report.

    121-180 days
    Billing Coordinator Follows-Up via Email and Escalates Items to the PI and Department/College Administrator

    Billing Coordinators will:

    • Include past due amounts on subsequent invoices.
    • Request the sponsor provide payment status for all outstanding AR items when submitting subsequent invoices for payment.
    • Alert the PI and Department/College Administrator of unsuccessful collections efforts. Request them to contact the sponsor for resolution.
    • Document collections efforts and sponsor correspondence via receivables comments in the University Financial System.

    The PI and/or Department/College Administrator will:

    • Contact the sponsor to request payment status of outstanding AR and copy the Billing Coordinator. Notify the Billing Coordinator of any other attempted correspondence and/or resulting information obtained.

    The Assistant Director of Billing and Receivables will:

    • Review outstanding AR collections via the monthly AR Aging Report.

    181-365 days
    Billing Coordinator Follows-Up via Email; Assistant Director Escalates Items to the AVP Research Administration and consults University General Counsel

    Billing Coordinators will:

    • Include past due amounts on subsequent invoices.
    • Request the sponsor provide payment status for all outstanding AR items when submitting subsequent invoices for payment.
    • Document collections efforts and sponsor correspondence via receivables comments in the University Financial System.

    The Assistant Director of Billing and Receivables will:

    • Review collections and outstanding receivables via the monthly AR Aging Report.
    • Alert the PI, Department/College Administrator, College Business Officer, Dean, and AVP Research Administration, and Finance of unsuccessful collections efforts.
    • Coordinate with appropriate parties to determine if work should continue based on financial risk.
    • Consult with University General Counsel to determine legal recourse if deemed necessary.

    >365 days
    Assistant Director Escalates to Dean, AVP Research Administration, and Finance; University Determines
    Write-Offs for Uncollectible Balances

    The Assistant Director of Billing and Receivables will:

    • Review collections and outstanding receivables via the monthly AR Aging Report.
    • Alert the PI, Department/College Administrator, College Business Officer, Dean, AVP Research Administration, and Director of Cost Accounting of unsuccessful collections efforts.
    • Coordinate with appropriate parties to determine if outstanding AR balances are uncollectible.

    If all collections efforts fail, including applicable legal recourse, the AR balance will be deemed uncollectible and be written off by the University. All write-offs must be approved by both the Research Office and Finance prior to processing.

  5. ADDITIONAL SCENARIOS

    Below are additional scenarios requiring actions outside of the above standard timeline:

    1. Sponsor Refusal to Pay Due to Identified Billing Issues: The sponsor may refuse payment due to a billing issue, such as unallowable costs included, additional backup required, and/or format updates needed for an invoice. In these instances:
      1. The Billing Coordinator will work to resolve any billing errors via a revised invoice and/or provide additional backup detail to the sponsor.
    2. Sponsor Refusal to Pay Due to Inadequate Work Performance: The sponsor may refuse payment due to inadequate work performance (pending deliverables, reports, and other technical functions for which the University is contractually obligated). In these instances:
      1. The Billing Coordinator will notify the Assistant Director of Billing and Receivables and request the PI and Department/College Administrator reach a resolution with the sponsor within 2-weeks time:
        1. If resolution is not reached in 2-weeks, the Billing Coordinator will send a reminder to the PI and Department/College Administrator.
        2. ii. If resolution is not reached in 4-weeks, the Billing Coordinator will send a reminder to the PI and Department/College Administrator, copying the PI’s Chair, Dean and/or College Business Officer.
      2. Depending on risk factors involved, a meeting may be scheduled with the AVP Research Administration and other appropriate parties to discuss whether work should continue.
    3. Sponsor Refusal to Pay Due to Unwillingness/Inability: If a sponsor refuses to pay due to their belief that the receivable is not their obligation, or due to their inability to pay, the PI and Assistant Director of Billing and Receivables should be notified immediately.
      1. The Assistant Director of Billing and Receivables will escalate the situation to the AVP Research Administration and appropriate parties will review the validity of the claim, determine whether additional work should continue based on applicable risk factors, and consult with University General Counsel for legal recourse.
      2. If a sponsor has defaulted on a debt, the AVP Research Administration will consult with the VP Research, Innovation, and Scholarship to determine if further contract assignments should be accepted by the University.
      3. A stop work order may be issued based on University review of risk factors involved.
        If the PI continues work after issuance of a stop work order, the PI and his/her department will become wholly responsible for all additional deficits that occur after the date of the stop work order.

 

Procedure Details:

OWNER: UD Research Office

RESPONSIBLE OFFICE: UD Research Office

REVISION DATE(S): 9/16/19

Procedure Source Email https://research.udel.edu/forms-policies-procedures/?entry=51447

ASSISTANCE

Compliance Hotline
Phone: (302) 831-2792

UD Research Office
210 Hullihen Hall
Newark, DE 19716
Phone: (302) 831-2136
Fax: (302) 831-2828
Contact us

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