There are various activities associated with closing out a sponsored project or award. There are usually reporting obligations to the sponsor, financial reconciliations, forms and reports for the institution, and account closeout tasks which must be completed.
Prudent financial management of sponsored projects include timely and accurate reporting to sponsors and account/award close out. These functions are tested as part of the annual OMB single audit as well as by other sponsoring agencies when requested.
On a monthly basis, the department administrator should run the Sponsored Budget to Actuals Report from Workday to ensure that all project costs are appropriately charged to the account. As the project nears termination it is important to review all costs, remove any unallowable charges, and update costing allocations, service centers, and purchasing cards for any recurring charges.
All purchase orders must be closed in Workday at the end of a project. For questions, contact Purchasing by creating a Remedy Ticket in the Brown IT Ticket System and assign it to Purchasing. When closing a subaward, please complete the Subaward Close-Out Certification Form and submit it to the OSP Grant/Contract Accountant.
End of Award Expenditures
It can be difficult to demonstrate how expenditures near the end of a project period benefited the award in a limited amount of time. All purchases incurred within the last 90 days of a project period should be reviewed to:
- Ensure the item/service was received during the project period; and
- Determine how the item/service provided benefit during the project period, given that it was purchased close to the applicable end date. Providing benefit means having a reasonable amount of use during the project period.
End of Award Equipment Expenditures
In addition to the above, it is recommended that equipment expenditures near the end of the project period should be reviewed to determine:
- If the equipment was included in the original budget proposal. Include this information with the purchase documentation. If the equipment was identified but not purchased until the end of the award, document how the equipment benefited the award given the limited amount of time left on the award.
- If the equipment was not included in the original budget proposal, determine and document how it benefited the award, given the limited time remaining.
- If Sponsor approval, as required, was obtained for the purchase of the equipment, document that the approval was received in the purchase documentation.
- If the equipment will not be used exclusively on this award, document how the cost was allocated to other funding sources.
- If applicable, document why the purchase was necessary when the proposal indicated that the project had access to necessary equipment and/or facilities.
- If the equipment was purchased to replace existing equipment, provide detail of the equipment being replaced.
Final Invoices and Reports
Upon project termination, the OSP Grant/Contract Accountant will review the account and work with the department administrator to determine the final figure to be reported to the sponsor on the financial report or final invoice.
In most cases for federal awards, final financial reports must be submitted within 90 days from the award end date, and within 60 days for final invoices. Non-federal deadlines may vary by sponsor. To meet sponsor deadlines there needs to be clear and timely communication between department administrators and OSP Grant/Contract Accountants.
Adjustments / Post-End Date Costs
Adjustment charges refer to costs incurred after the termination date of an award. Under some circumstances, the costs of final report preparation may be incurred after the end date, and should be carefully documented. The adjustment and reconciliation of charges must be completed in a timely manner after award end to ensure submission deadlines to sponsors are met.
Any charges posted after the termination date will need to be reviewed and justified for allowability if they are included with the final financial report or final invoice.
Generally, the costs of equipment or materials and supplies ordered after the end date may not be charged to the project.
In addition, the grantee typically should not purchase items of equipment, computing devices, or restock materials and supplies in anticipation of the end date of the grant where there is little, or no time left for such items to be utilized in the actual conduct of the research.
However, in accordance with 2 CFR 200.461 (Publication and Printing Costs) grantees may charge the award before closeout for the costs of publication or sharing of research results, if the costs are not incurred during the period of performance of the award. This means that the costs must be posted to the award (paid) by the final action date in order for the costs to be included in final invoicing/reporting.
As with any type of cost, an estimated amount of anticipated publication costs may not be added to the final invoice/financial report to allow for costs to be incurred after the final action date.
Deficits occur when cumulative expenses exceed the amount awarded by the sponsor and could be considered voluntary uncommitted cost sharing. It is the responsibility of the department to transfer deficits out of sponsored awards promptly and no later than 3 months after the termination date.
Management of Fixed Price Agreement Residual Funds (SOP 10.15.01)
At award close-out, OSP will review the account to ensure that all sponsored funds have been received, all expenses related to the project are reflected in the account, all PI and personnel effort that has been charged to the project is in line with the work performed, and all award requirements (e.g., final technical reports) have been met. OSP will confirm that the terms and conditions of the award do not require the return of unspent funds. When there are residual funds remaining on the fixed price award, OSP will transfer the balance to the designated account(s) per the Standard Operating Procedure (SOP). Fixed price sponsored award balance transfer responsibilities are shared among the PI, Department and OSP. For large balances (>25% of total award or > $100K) the Residual Balance Transfer Request Form is required for completion.