HBP Part 17.4. Salary Clearing Accounts

Date published: Oct. 12, 2009
Last revised: Oct. 12, 2009
Issued by: Office of Sponsored Projects


A. Introduction

Salary clearing accounts are established for departments that have employees who work on more than one research project every month at levels of effort which vary from month to month. This fluctuation of effort prevents accurate planning and results in an unnecessary administrative burden when the traditional appointment methodology is used (i.e., appointments are changed on monthly and/or weekly basis). The clearing account process allows the distribution of actual salary expense to a project one month after the effort was actually performed on the project. This process has an unfavorable impact on the university’s cash flow, because it delays the project’s reimbursement to the university by one month. For that reason, salary clearing accounts are established only when a need for funding is demonstrated that cannot be met through existing avenues, such as credit approval.

B. Departmental Responsibilities

Departments bear certain responsibilities with regard to salary clearing accounts:

  • Departments that approve the use of salary clearing accounts each month are required to fully distribute the salaries charged during the previous month.
  • At fiscal year-end, departments are usually required to distribute the salaries within one week. The year-end timeline is normally provided one month in advance to allow departments time to prepare for the shortened time frame.

Departments that do not adhere to the responsibilities for distribution may have their salary clearing account authorization revoked.

Administrative oversight for the salary clearing account process resides with the Sponsored Projects Award Administration section of the Office of Sponsored Projects. Approval for establishment of salary clearing accounts resides with the Office of the Senior Vice President and Chief Financial Officer.



Part 17. Office of Sponsored Projects/Sponsored Projects Award Administration - Table of Contents