Research Administration Office

University of California

Memo Operating Guidance

No. 85-23

August 23, 1985

Subject: Southern California Edison Master Agreement -- Amendments to Appendix J (Advance Payment), and Appendix K (Invoicing/Expenditure Reporting Formats)

Enclosures 1 and 2 for your guidance are revised Appendix J and Appendix K to the Master Agreement between the Southern California Edison Company and the University. A brief background discussion and explanation of these changes follow:

GENERAL

The revisions of Appendix J and Appendix K are the result of Edison's initiative to both simplify and improve the "awkward" advance payment and invoicing requirements which most campus Accounting Offices have been reluctant to follow. Jeanne Thornburg on the Riverside campus met with Wayne Carls of Edison to assist with redrafting these appendices. In our view they represent an improvement over previous requirements and from a cash management perspective are more advantageous to the University.

REVISED APPENDIX J

Basically, under the revised Appendix J, Edison will make available to the University with each award two types of advance funding: (1) Equipment Purchase Advance Funding will be paid to the University in one lump sum at the beginning of the contract for the total amount of equipment purchases budgeted for the project; and (2) for all other operating Reimbursable Costs, one month's advance funding will be paid to the University in equal installments, determined by dividing the remaining Reimbursable Costs (after subtracting the equipment advance) by the months in the project period. As for example, a 6 month's project will have six 1/6 installments; a 1-year project will have twelve 1/12 installments, and so forth. Payment by Edison in all cases will be made within 30 days upon receipt of invoices from the University. In order to assure timely receipt of advance funding for the start of the project the first three invoices to cover the equipment funding advance and the initial two months' operating funding must be prepared by the campus Accounting Office and submitted to Edison at the same time or shortly after the executed agreement is returned by the C& G Office. The fourth invoice would be submitted one month after the start of the project, with subsequent invoices submitted 30 days prior to the month for which payment of the advance is requested. (Refer to Flow Chart Enclosure 3 which outlines in detail an example of how the new requirements are to be implemented).

The addition of a new paragraph 2.3 under Appendix J is intended to mitigate occurrences whereby the University inadvertently accumulates significant surplus balances which remain unexpended over the project period.

REVISED APPENDIX K

Utilizing the revised Appendix K format on page K-2, the University continues to be obligated to providing Edison with a quarterly Report of Expenditures indicating cumulative costs incurred to date. Please note, however, that the revised expenditure reporting format has been simplified with the due date changed to 45 days after the end of the quarter, instead of 30 days previously required. The requirement for a final expenditure report 90 days after project expiration also remains unchanged.

FUTURE DEVELOPMENTS

We are continuing our discussions with Edison in hopes of reaching agreement on the inclusion of mutually acceptable patent provisions and improved publication provisions under the Master Agreement. We will keep you informed of these developments.

Refer: Willie C. Archie (415) 642-2885 ATSS 8-582-2885

Subject Index: 6, 22

David F. Mears

University Contracts and Grants Coordinator

Enclosures

cc: Accounting Officers


ENCLOSURE 1 TO C& G MEMO 85-23

APPENDIX J

REIMBURSABLE COSTS AND PAYMENT

1. REIMBURSABLE COSTS

Reimbursable costs shall consist of direct and indirect costs which are incurred during performance of the Work as defined in the Purchase Order and as specified through the effective period as identified therein.

PAYMENT

In consideration of the Work to be performed under individual Purchase Order agreements, payment of Reimbursable Costs by Edison to the University will be made in the following manner:

2.1

Upon signature of the Purchase Order "Acceptance Copy", by an authorized representative of the University, an advance payment invoice may be submitted to Edison which will allow for reimbursement of equipment to be purchased, as required to start the Work. Such equipment shall be specifically identified in the University's proposal and duly authorized for purchase as defined in the Purchase Order. In addition, Edison shall provide for a monthly advance progress payment wherein the remaining Reimbursable Costs (excluding initial equipment purchases) are equally divisible by the number of months which remain through the Effective Period of the Purchase Order. It is understood that these advance payments are based upon estimated costs only; however, the University shall not exceed the total authorized amount of the Purchase Order except as authorized by Change Order. A separate invoice will be required for each successive progress payment and payments shall be made within thirty (30) days of invoice receipt at Edison.

2.2

Within forty-five (45) days after the end of each quarter, the University shall provide Edison with a statement of actual (cumulative) costs by major cost category in accordance with the Invoice Format (i.e., Appendix K) which defines actual cost incurred by the University during the preceding quarter.

2.3

In order to minimize the surplus difference between actual cost and advance progress payments, Edison may, at its sole discretion, and upon review of the quarterly statement as defined in Section 2.2, request an adjustment to the advance progress payment, should actual (cumulative) costs be less than projected expenditures as defined in the University's proposal.

Within ninety (90) days from the end of Purchase Order expiration, or termination of the Purchase Order, the University shall submit a final report of expenditures by major cost categories in accordance with the Invoice Format which defines actual cost incurred during the Effective Period. Unless otherwise authorized by Edison, the University shall return any unexpended funding which remains after expiration or termination of the Purchase Order.


APPENDIX K Invoice Format

To: Southern California Edison Company

Accounts Payable Division

From: University of California,

Invoice No.: Edison Purchase Order No.

Date:

Account No.:

TOTAL AUTHORIZED AMT.

(As defined in the

Purchase Order)

Less Advance Payments to Date (As applicable) -

$

Less Equipment Advance. -

REIMBURSABLE COST $

Subtotal

div. by # of months

remaining in Effective Period

(as defined in

Purchase Order)

Monthly

Progress

Payment

= $

Note:

Equipment advance may be added to the initial invoice of each new Program period which is incorporated by Change Order.

If additional Work is incorporated by Change Order, the new Total Authorized Amt. and Effective Period may result in a revised Monthly Progress Payment.

1431c 999

K-1

Amendment No. 1 II CRC UC

6/5/85


ENCLOSURE 2 TO C& G MEMO 85-23

Quarter Report, 198

Major Cost Category

Salaries and Wages Employee Benefits

Supplies and Expense

Equipment

(Initial Advance)

Travel

Other Direct Costs

Subtotal - Direct Cost

Subtotal - Indirect Cost

@___%

Total Actual Cost versus

Total Authorized Amt. (as defined in the Purchase Order)

Current

Quarter

of Program Period

DATE: --, 19

Actual (Cumulative Cost)

Cumulative

Total of

Quarterly

Program Cost

Total Authorized Amt. (Cumulative to Date)

4078g 999

K-2

Amendment No. 1 II CRC UC

6/5/85


ENCLOSURE 2 TO C& G MEMO 85-23

- EXECUTION COPY -

Amendment No. 1 to Appendix J, dated June 5, 1985

and Amendment No. 1 to Appendix K, dated June 5, 1985

IN WITNESS WHEREOF, the parties have executed these Amendments which supersede Appendix J and K, both dated January 13, 1982, as originally executed in the Master Agreement between the University of California and Southern California Edison Company, coded II CRC UC, dated April 23, 1982.

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

Name: David F. Mears

Tit1e: University Contracts and Grants Coordinator

SOUTHERN CALIFORNIA EDISON COMPANY

Name:

Title: Manager of Procurement and Material Management

Date:

APPROVED AS TO FORM JOHN R. BURY

Attorney