Specific procedures must be followed in order for any overdraft to be considered allowable. A continuation proposal is normally submitted at the end of each budget period in order to receive the next increment of funding. These might include testing or evaluation of proprietary products, development or construction of equipment, rights to data, patents, copyrights, technical reports or evaluation, consulting services. Funding for these costs may come from another source, from the University's own funds, or from a reduced indirect cost rate. Personnel effort on a project without salary recovery is considered cost sharing.
Encumbrances reduce the available balance of an account.
All indirect cost rates are negotiated with the federal government or the agency providing the award. The granting agency will provide additional funds equal to the private matching funds raised for the project. Federal funds may not be used for matching on another federal project. Unlike cost sharing, neither personnel effort against the project nor reduction in indirect costs can be used for the matching component. Some Federal agencies require matching in order to receive an award.