Overdraft Policy

Background

The purpose of this policy is to establish guidelines for managing and resolving overdrafts on Wisconsin Partnership Program (WPP) awards.

Definitions

Overdraft: when an award recipient incurs grant expenditures that exceed the total awarded amount.

Policy

Recipients are not allowed to overdraw WPP awards. Any overdrafts must be addressed within ten business days upon identification of the overdraft to avoid financial and compliance risks. If WPP staff anticipates an award will be overdrawn, it will take action to prevent the overdraft, including changing the project status in the University of Wisconsin–Madison financial system to reject future transactions.

Procedures

Recipients are responsible for monitoring award expenditures at least monthly to ensure they align with the approved project budget. Recipients must promptly, within ten business days of identifying a potential or actual overdraft, resolve overdrafts or anticipated overdrafts through funding updates or accounting adjustments (see Cost Transfer/Accounting Adjustments policy).

WPP staff will monitor spending rates on a biweekly basis and will notify Recipients of any overdrafts or anticipated overdrafts. If an overdraft is anticipated within the next month, WPP staff will promptly notify the recipient to encourage preventative action. If action is not taken within ten business days of the anticipated overdraft, WPP staff will change the project status in the UW financial system. Recipients will be notified before WPP staff changes the award status.

Failure to address overdrafts within the specified timeframe may result in suspension or termination of the award.