Overspending on a sponsored research fund can reflect poorly on the Principal Investigator, Research Accounting Services, and Drexel University. It can indicate the award was not planned carefully enough to support a request of sufficient funding to complete the award. It can also be seen as indication of haphazard internal financial management of a sponsor's funds. Because the implications of overspending are so serious, a major responsibility shared by the Principal Investigator and the Research Accountant is to carefully monitor the budget.
If a sponsored research fund ends with a deficit, the Principal Investigator's department or administrative area is responsible for covering the remaining expenditures. For those sponsored research funds that end with a deficit, prompt cost-transfer requests must be submitted by the department or the administrative area. The cost transfer will initiate the process of moving remaining outstanding expenditures from the sponsored research fund to the appropriate departmental General Leader account.
While the financial implications of under spending on a sponsored research fund are not nearly as serious, severe under spending, 20% or more of an award's total direct costs, can also reflect poor project planning, haphazard internal financial management of a sponsor's funds, or that the goals of the award were not met.
There is little virtue in ending a sponsored research fund with a large balance of funds. Rarely does the sponsor allow the institution to keep the money. Rather, it must be returned to the sponsor where it can create a fair amount of accounting inconvenience. Institutions that return large unused portions of sponsored research funds are not rewarded for their frugality.
This does not mean that there will never be instances when there are legitimate reasons for major under spending of a sponsored research award. Nor does it mean that unbridled spending of remaining sponsored research funds should take place in the waning months of a project. Rather, careful planning, monitoring, ongoing communication with the sponsor, and revising of the work plan as needed should be the norm throughout the life of the award.