Financial Reporting and Closeout Policy (Policy No. 600.0)

 

Effective Date:

March 1, 2019

Revision Date:

N/A

Responsible Office(s):

Office of the Vice President for Research and Office of Sponsored Projects

Approval:

Office of the Vice President for Research


Financial Reporting and Closeout Procedures/Guidelines

 

Scope

This document sets forth the requirements for final and interim financial reporting of expenditures and closeout of all sponsored projects at the University in accordance with sponsors’ award terms and conditions.

Policy Statement

This policy ensures compliance with Office of Management and Budget Uniform Guidance (2 C.F.R., Part 200) and promotes adherence to federal, state, and other sponsor requirements related to timely reporting of sponsored projects financial expenditures as recorded in the award documentation.  2 CFR 200.343 requires that final financial, performance, and other reports be submitted within 90 calendar days after the project end date.  It is Brown’s policy that all award closeout deliverables are completed and submitted to sponsors within 90 days after sponsored projects expire.

The policy also outlines the responsibilities of the Principal Investigator (PI), Department Administrator and The Office of Sponsored Projects (OSP-POST AWARD), who together are responsible to submit reports timely and ensure:

  • Reports are submitted timely within the reporting deadline set forth in the award agreement/contract;
  • Financial reports accurately reflect the actual use of sponsored funds as recorded in the financial records of the University; and
  • Awards are closed-out timely to avoid the risk of financial activities posting to the award general ledgers after the award performance period.

Purpose of the Policy

This policy alerts the research community to the urgency of timely submission of final deliverables and the prompt closeout of expired sponsored projects.  Federal agencies have become increasingly stringent about the timely submission of required reports as this is considered a key mechanism reflective of proper accountability and good stewardship of funding. Non-compliance with sponsored project reporting term and closeout of award record has adverse consequences including but not limited to, forfeiture of final payment, delayed or reduced future funding, less favorable award terms and conditions, and audit finding risks.  The submission of final financial, performance, and other reports to the sponsor and the closeout of completed projects within 90 days of expiration help mitigate risks and negative consequences.

Applicability of the Policy

In order to maintain consistency in the treatment of sponsored projects, this policy on sponsored project financial reporting and closeout applies to all awards, regardless of the funding source. 

Financial Reporting

The Office of Sponsored Projects is responsible to prepare interim financial reports, final financial reports and invoices based on financial information reflected on Workday general ledger and ensure expenses posted to the ledgers are in accordance with the terms and conditions of the sponsored award and University policies.  The general ledger system represents the official record supporting all required financial statements.  Additionally, it is the responsibility of OSP-POST AWARD to sign and submit all financial reports to the sponsor on behalf of the institution.  On rare occasions and with the prior approval of OSP-POST AWARD, financial reports may be submitted to the sponsor by the department in collaboration with OSP-POST AWARD.

Interim/Annual Financial Reporting

Depending on the nature of the interim report, PI and/or department certification may not be required prior to submission of the report.  OSP-POST AWARD will prepare and submit report to sponsor based on the transactions posted to the general ledger as of the end date of the interim reporting period.  However, in instances when sponsor deems an interim financial report to be “final” for a budget period and carryforward (i.e., moving unspent funds from one budget year to a subsequent budget year) is not automatic, PI and/or Department Administrator certification is required on a financial rough draft.  Financial rough draft reports must be returned to OSP-POST AWARD within the period specified by OSP-POST AWARD.  In cases where draft interim financial reports are not returned within the specified period, the interim financial report will be certified by OSP-POST AWARD and submitted to the sponsor based on University’s financial records and without PI and/or departmental approval.

Final Financial Reporting (FFR)

PI and/or department administrator must certify financial rough draft reports and return to OSP-POST AWARD within the deadline specified by OSP.  PI and/or Department Administrators should reflect legitimate adjustments on the financial rough draft prior to returning certified report to OSP-POST AWARD.  In cases when the draft final financial rough draft report is not returned to OSP-POST AWARD as instructed, OSP-POST AWARD will submit to the sponsor a certified final financial report based on University’s financial records without departmental approval.

Cost overruns (overdrafts) must be removed from the project prior to submission of the certified financial rough draft to OSP.  OSP will reassign costs that overrun the award amount to the cost center associated with the award if the departments do not remove overruns prior to the submission of a certified rough draft.

Except in unusual circumstances, the University will not file final financial reports which indicate unliquidated obligations or commitments. As stated in the NIH Grants Policy Statement, “Final FFRs must indicate the exact balance of unobligated funds and may not reflect any unliquidated obligations.”  Any unique circumstance that may require a final financial report to be filed with unliquidated obligations or commitments, OSP-POST AWARD in consultation with sponsor, will report the unliquidated on the final financial report.

Revised Final Financial Reports

Revision to a financial report or final invoice should be rare and must be legitimate.  Sponsors policies will determine when a revised financial report and revised financial invoice that includes additional costs are acceptable.  However, credits to sponsors will always result in a revised report and invoice.   

Note:  Some sponsors may not require a revised final financial report under a certain threshold but rather will require a refund of funds resulting from any reduction in expenses originally reported to and paid by the sponsor.

Requests to submit a revised final financial report may require a recertification of the financial rough draft by the PI and/or department administrator, and sent to OSP-POST AWARD along with supporting documentation as may be necessary.  A revised final financial report wherein the University claims less in expenditures than what was originally reported is required regardless of timeframe.

It should be noted that the submission of a revised final financial report may call into question the veracity of the original final financial report, University’s certification of that report, internal controls and financial management of its sponsored awards.

Non-Financial Reports

Annual progress and/or technical reports

Depending on the reporting terms of an award, annual progress and/or technical reports may be required.  The progress and/or technical reports are prepared and submitted to the sponsoring agency by the Principal Investigator. The submission of required progress and/or technical reports is the responsibility of the Investigator. While some sponsors permit online submission of these reports, many do not. Copies of reports, or report transmittal letters, should be forwarded to OSP-POST AWARD. Please note that the failure to submit reports in a timely manner may jeopardize current and future funding from the sponsor.

Final Invention Reports

Many sponsors require reporting about new technologies conceived or reduced to practice during the conduct of a sponsored research project. PI’s are responsible to complete invention reports/statements and route to OSP-POST AWARD for approval and final submission to sponsors. 

Property Reports

If award terms require the submission of a property report, OSP-POST AWARD will complete report in consultation with PI and/or designee and the Manager, Capital Asset Accounting and Analyst in the Controller’s Office.  OSP-POST AWARD is also responsible for the submission of property reports.

Closing Sponsored Awards

After the final financial report is filed with the sponsor, and all financial obligations satisfied, OSP-POST AWARD is responsible to permanently close and/or inactivate the award in both the award system (Coeus/InfoEd) and the financial system (Workday).   Once the award is inactivated in Workday, no further financial activity can occur.  OSP-POST AWARD documents the total cumulative expenditure amount reflected on the final financial report on the award record in Workday.  Most sponsors require retention of records, including interim and final reports for a period of time following the end of the project period.

Definitions
 

Closeout

The act of completing all internal procedures and sponsor requirements to terminate or complete a research project. Specifically, closing out a sponsored project that has ended/terminated includes:

  • completion and submission of non-financial deliverables stipulated in the award document by PI and/or OSP,
  • submission of final financial reports and invoices,
  • final payment requests (for LOC drawdowns), and
  • Inactivation of an award hierarchy in Workday (inactivation of all grant worktags associated with an award).
  • Changing the award status to “Close” in Coeus

Final Financial Reports and/or Final Invoices

The accounting of expenditures and obligations incurred during the period of performance and/or at the conclusion of the sponsored project using the sponsor-mandated report format.  A financial report may also contain “cost share” expenditures and program income (reported and disbursed) for the sponsored project when applicable.

Final Letter of Credit Draw Down

Funding issued via a Letter of Credit must be drawn down within 90 days of the end of the award. These draw down requests are made by OSP-POST AWARD monthly and based on expenditures posted to the general ledger.

Final Number

Cumulative expenditures reported to the sponsor.  Final numbers are logged on the award line record in Workday.  Entering the final figure into Workday confirms that payments expenditures in the general ledger agree to the final number reported to the sponsor. 

Financial Rough Draft Report

A draft of the financial report certified by the PI and/or department manager.  Changes and/or adjustments are also included on this document.

Interim/Annual Financial Reports

Many sponsors require the submission of annual and/or interim financial reports or invoices at the end of a budget period.  The expenditures reported on interim/annual reports represents expenditures that incurred within the specific budget period. 

No Cost Extension

A mechanism to extend the performance period of an award without adding additional funding. NCE’s typically must be requested before the award period ends.

Progress and/or Technical Report

Programmatic report of the project- includes the science/technical aspect of the project. This report is the responsibility of the Principal Investigator.

Unliquidated Obligations

The amount of obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, these represent obligation amount incurred by the recipient that has not been settled or paid.

Unobligated Balance

The portion of the funds authorized by the sponsor for expenditure under a Notice of Award (NoA) that has not been obligated by the end of a budget period.

Unreconciled Accounts

These are expired/terminated awards having Coeus Status other than “Close” because there is a difference between what was reported to the sponsor and what is reflected on the general ledger.  Or, in some cases, there may be outstanding non-financial reports.  These present obvious risks and must be managed and fully closed out/disabled to limit their financial risk.

Note:  Most awards have strict deadlines for completion of closeout activities. Failure to complete closeout within the deadline can result in non-payment of the final amount due or may affect the ability to obtain another award from the sponsor. 

Roles and Responsibilities:
 

Principal Investigator

  • Ensures all expenses are allowable, reasonable and allocable to the project and that any required adjustments to expenses are posted in compliance with accounting, reporting and close-out policies and procedures.
  • Certify final/interim financial rough draft report by the due date set by OSP-POST AWARD during the reporting period.
  • Ensures final invoice from subawardees is received and all payments have been processed prior to confirming final expenditures.
  • Determine whether the project will end up with an unobligated (unexpended) balance, and be aware of the award terms regarding treatment of such a balance: Can the unobligated balance be automatically carried forward? Or must it be returned to the sponsor?  Contact your Pre-Award Grant/Contract Administrator if you require assistance.

Department Manager/Financial Coordinator

  • May certify final/interim financial rough draft report on behalf of PI and submit by the due date set by OSP-POST AWARD.
  • Determine whether the project will end up with an unobligated (unexpended) balance, and be aware of the award terms regarding treatment of such a balance: Can the unobligated balance be automatically carried forward? Or must it be returned to the sponsor?  Contact your Pre-Award Grant/Contract Administrator if you require assistance.
  • Reviews Workday general ledger reports regularly (e.g., no less frequently than monthly and more frequently for high dollar awards) to ensure costs are properly and completely recorded.
  • Provides OSP-POST AWARD with any requested documentation to support questioned charges by due date set forth by OSP-POST AWARD during the reporting period.
  • Submits to OSP-POST AWARD all adjustments after the performance period along with adequate documentation.  Process adjustments immediately, once approved by OSP-POST AWARD and provide operational transaction number on report (example, journal number, supplier invoice number, etc).
  • As may be required per sponsor award documentation, prepares interim/final report and submit to OSP-POST AWARD for review and approval before submitting report to sponsor.
  • Remove all over- expenditures of an expired award within pre-defined deadline set by OSP-POST AWARD.
  • Remove unallowable costs or sponsor disallowances from the general ledger.
  • Notify service centers with recurring billings (example, animal charges, printing, laboratories, etc) of the sponsored project expiration date and provide a new grant number, if applicable.
  • Ensures all open commitments are closed and costing allocations have ended by the due date set forth by OSP-POST AWARD during the reporting period.

Office of Sponsored Projects - Post Award

  • Performs desk review of expenditures to ensure compliance and selects cost items for allowability, and notifies PI and/or department manager of appropriate action to take, if necessary.
  • Confirms with PI and/or Department Manager that all expenses are final.
  • Reviews and approves all adjustments after the performance period that are included in the certified rough draft package submitted by department.
  • Signs and submits financial report to sponsors based on total expenditures confirmed by PI and /or department manager.
  • Submits final invoice to sponsor or processes final cash draw, if applicable.
  • Reconciles payments against cumulative expenditures reported and ensures all payment received.
  • Refund or transfer unexpended cash balance per the award terms and conditions.
  • Process final project budget adjustment and general ledger closing entries as may be necessary.
  • Obtains confirmation from PI and/or department manager that all required non-financial deliverables have been submitted to sponsor.
  • Closeout award in COEUS and request the inactivation award hierarchy in Workday.
  • Marks award file with discard date.
  • Remits unspent funds back to sponsor, as required.

Office of Sponsored Projects - Pre Award

  • Certifies and submits final progress reports or technical reports when institutional signature is required.
  • Submits carryforward and no-cost extension requests to sponsor when applicable.
  • Submits relinquishment statement when applicable.

FAQs

Q- When is a Financial Report due? 

A- Reporting deadlines vary by agency. Generally, Federal sponsors require a final report within 60/90/120 days of project expiration. It is Brown’s policy that all award closeout deliverables are completed and submitted to sponsors within 90 days for all awards with reporting deadline greater than 90 days after sponsored projects expire.  The submission of final financial, performance, and other reports to the sponsor and the closeout of completed projects within 90 days of expiration help mitigate risks and negative consequences and ensure all funds are drawn down within 90 days of award expiration as is the federal requirement.

 

Q- Who prepares and signs off on Financial Reports? 

A- Office of Sponsored Projects (OSP-POST AWARD) prepares and signs off on all interim and final financial reports based on amounts recorded in the University’s financial system (Workday) general ledger.  Interim reports are generally not submitted to departments for review and certification unless carryforward of unobligated balance is not automatic.  OSP-POST AWARD submits the Final Financial Rough Draft report to the department for review and certification.  The department will return the financial rough draft report to OSP- POST AWARD within the set internal deadline. In cases where financial rough draft reports are not returned within the specified period, the financial report will be signed by OSP-POST AWARD and submitted to the sponsor based on University’s financial records and without PI and/or departmental approval.

 

Q- Are there circumstances when departments submit reports directly to sponsors? 

A- Generally, OSP-POST AWARD prepares all financial reports/invoices. Occasionally, as may be required per sponsor award documentation, departments may have to submit reports directly to sponsor. If departments are required to submit financial reports directly, departments are required to submit financial reports to OSP-POST AWARD for review and approval before submitting the report to sponsor.

 

Q- Who is responsible for the timely collection of Accounts Receivable (A/R)? 

A- OSP-POST AWARD is responsible for collection with assistance from the departments. E.g., a payment may be 90 days overdue because a deliverable has not been submitted by the department. However, the department is ultimately responsible for any receivables which cannot be collected from the sponsor.

 

Q- What if there is a surplus (fund balance) at the end of the project?

A- Departments must confirm that all appropriate expenses posted to the project.  If the award requires funds be returned to the sponsor, OSP-POST AWARD will process a refund to the sponsor.  If the award states that the balance be retained by the University (mostly Firm Fixed Price agreements), OSP-POST AWARD will process a manual journal entry to transfer the surplus to the cost center associated with the award.

 

Q- In a multi-department award, where do the responsibilities for financial closeout and reconciliation lie? 

A- In a multi-department award, the parent department assumes prime responsibility.  The parent department receives from OSP POST AWARD the rough draft with excel tabs in the workbook for each grant.  The parent department is expected to distribute the relevant tab to the appropriate department; this may require setting a new deadline for return of the completed child reconciliation back to the parent.  After receiving the child reconciliations and completing the reconciliation of the parent account, the parent department should populate the excel template as well as the summary page of the rough draft.  The parent is responsible to collate the whole rough draft and scan the entire document, in order, with any documentation, back to OSP POST AWARD by the deadline.


Contacts

Subject

Contact

Phone

Financial Reporting & Closeout Policy

Grants/Contracts Accountant

401-863-2777