All grant and contract revenues should be placed in ledger 6 accounts, which are established and monitored by the Office of Research and Sponsored Programs. However, under the following circumstances, and subject to approval by the provost, grant and contact revenues may be placed in ledger 5 accounts.

1. A ledger 5 account may be established for receiving revenues from grant and contract services, defined as "other sponsored programs" (public service), by the Office of Research and Sponsored Programs, providing:
1. the funds are not received either directly or indirectly from the federal government (i.e., subcontracts or pass-through funds from state or local governments);
2. the funds are not subject in any manner to line-item budget control, sponsor-directed audit, or any other sponsor-imposed financial or administrative restriction;
3. the individual grant or contract is not in an amount in excess of $5,000; and,
4. the total projected annual revenue for the account is less than $25,000.

2. The first character in the title of accounts established for this purpose shall be the letter P. At the close of each fiscal year, previous fiscal year expenditures from P accounts shall be assessed the university approved indirect cost rate for public service by the Office of Financial Services.
3. Each college or school shall be responsible for filing an annual report for the preceding year for each ledger P account. The report should be filed by September 1 with the Office of Research and Sponsored Programs and shall provide:
1. a brief narrative of the types of clients served and the nature of services provided;
2. a financial statement showing total revenues, expenditures, university indirect costs paid, and year-end balance; and,
3. the report shall list each contract in excess of $500, along with the name of the client and the dollar amount of the contract.

1. A ledger 5 account may be established for receiving revenues from grant and contract services defined as "research" by the Office of Research and Sponsored Programs, providing:
1. the funds are not received either directly or indirectly from the federal government (i.e., subcontracts or pass-through funds from state or local governments);
2. the funds are not subject in any manner to line item budget control, sponsor-directed audit, or any other sponsor-imposed financial or administrative restriction;
3. the individual grant or contract is not in an amount in excess of $5,000; and,
4. the total projected annual revenue for the account is less than $25,000.

2. The first character in the title of accounts for this purpose shall be the letter R. At the close of each fiscal year, the previous fiscal year expenditures from R accounts shall be assessed the university-approved indirect cost rate for research by the Office of Financial Services.
3. Each college or school shall be responsible for filing an annual report for the preceding year for each ledger 5-R account. The report should be filed by September 1 with the Office of Research and Sponsored Programs and shall provide:
1. a brief narrative of the types of clients served and the nature of services provided;
2. a financial statement showing total revenues, expenditures, university indirect costs paid, and year-end balance; and,
3. the report shall list each contract in excess of $500, along with the name of the client and the dollar amount of the contract.

An audit of all ledger 5 accounts coded P or R shall be conducted annually during the month of October by the Office of Research and Sponsored Programs. Accounts found not to be in compliance with university rules and regulations will be closed.