Finance Administrative Policies and Procedures
Section: 4- Grants and Contracts Accounting148
Policy Procedure: 4-4.01
Subject: Closing a Sponsored Project
Effective Date: 8/1/2002
Responsible Department: Grants and Contracts Accounting

Overview

This procedure explains the methods used to review and financially close Sponsored Projects in the accounting system. Sponsored Projects must be closed out and final financial and technical reports delivered to the sponsor on a timely basis in order to demonstrate good stewardship of external funds, eliminate or reduce audit findings for late reports, improve cash flow, and reduce the risk of loss or reduction in funding due to late reports.

Forms

Residual/Unused Supplies Accountable to Grants and Other Agreements - GCA Accountant will e-mail this form to the department during closeout of Federal and Federal flow-through grants (but not contracts).

Sample Form

General Guidelines

Grants and Contracts Accounting (GCA) is responsible for coordinating financial closeout of Sponsored Projects with the department and for issuing final financial reports, invoices, and other required financial reports to the sponsor for all projects except corporate clinical trials and corporate basic research projects. The Departmental Business Manager or designated staff is responsible for coordinating final reporting on those due to requirement for patient case reporting.

Sponsored Projects must normally be financially closed and reports issued within sixty (60) or ninety (90) days after project period or budget period termination. The specific award terms and conditions and specific sponsor guidelines will state the final due dates.

The Office of Research and Sponsored Programs (ORSP) is responsible for coordinating timely submission of technical reports, invention reports, and other required scientific reports and deliverables by the Principal Investigator. If the Principal Investigator has not completed the scientific work and technical reporting for the project within the project period, then he/she must contact ORSP in order to request a no-cost extension of the project period to complete these tasks. Sponsor approval for a no-cost extension may be required or may be approved by ORSP under Federal "Expanded Authorities".

Specific direct expenditures which may be reviewed and may be subject to disallowance if determined to be inappropriate charges include, but are not limited to:

a. Equipment and/or supplies purchased within 90 days of the termination date.

b. Expenditures incurred for pay periods or invoice dates after the project termination date.

c. Encumbrances or commitments incurred after the project termination date.

d. Travel expenditures.

e. Expenditures for administrative and clerical salaries, general purpose equipment, computers, and/or office supplies that are normally charged indirectly through the Facilities and Administrative (F&A) Cost Rate.

Questions regarding financial closeout should be addressed to the appropriate Grants and Contracts Accounting Accountant based on departmental assignment (see Distribution of Grants by Administrator) or at 792-2850.

Procedures

1. GCA issues a monthly report to the Business Manager of Sponsored Projects with project or budget periods ending within ninety (90) days. The report includes a listing of the employee(s) being paid from the Sponsored Project UDAK per payroll records. The Business Manager should use the report to initiate changes to the employee(s)' salary distributions to remove the terminating project as of the termination date.

2. ORSP notifies the Principal Investigator and Departmental Business Manager of project termination sixty (60) days prior to the termination date and again at thirty (30) days.

3. Thirty (30) days prior to termination, GCA sends a project termination notice to the Business Manager with a copy to the Primary Investigator (PI) to notify them of closeout procedures and the final report/invoice due date.

4. After the termination date, GCA will contact the Business Manager to begin verification that all appropriate expenditures/encumbrances have been properly recorded in the accounting records. GCA also reviews project expenditures for allowability under sponsor guidelines, award terms and conditions, and approved budget.

5. Approximately thirty (30) days prior to the final report/invoice due date, the GCA Accountant will provide the Business Manager with a detailed expenditure and encumbrance analysis reflecting information recorded in the official University financial records, plus pending adjustments.

6. The Business Manager must review the expenditure and encumbrance information provided by GCA and provide requested information by ten (10) working days prior to the due date of the final report/invoice so that the project is ready for closeout. Specific departmental responsibilities include, but are not limited to:

a. Request salary distribution changes (fund changes) as of the project termination date for the employee(s) in order to discontinue salaries and fringe benefits being paid under the Sponsored Project UDAK.

b. Ensure that the effort percentages reported on the employee(s)' Quarterly Activity Reports during the project period support the salaries expenditures which have been charged to the UDAK.

c. Close or transfer open encumbrances/commitments that are not valid charges to the UDAK.

d. Allocate allowable Purchasing Card transactions to the UDAK as soon as possible in the P-Card allocation system.

e. Request cost transfers to remove unallowable expenditures or cost overruns, and/or align salary charges with reported effort in accordance with Procedure 4-3.12: Requesting a Cost Transfer to/from a Sponsored Project.

7. For Federal and Federal flow-through grants and cooperative agreements only (but not contracts), GCA will e-mail the form or web page link to "Residual/Unused Supplies Accountable to Grants and Other Agreements" for completion by the Business Manager or Principal Investigator. See the forms section of this policy for a link to the form and an example.

8. Upon confirmation that all expenditures and/or obligations have been identified, GCA will make a final review of transactions and recalculate F&A costs. GCA will also ensure that cost sharing obligations have been met and that cost sharing expenditures included in the final report meet the requirements of OMB Circular A-110.

9. GCA will prepare the final invoice or reimbursement request and prepare the final financial report, if required, to complete external reporting requirements. GCA will send copies of the final invoice and/or final financial report to the Business Manager for final confirmation of expenses. GCA will notify the department if the Principal Investigator's signature is required on these documents per sponsor guidelines.

10. If the department does not respond by ten (10) working days prior to the due date of the final invoice and/or report, then GCA will transfer any inappropriate charges to the responsible unit?s F&A Recovery UDAK if funds are available. If funds are not available from F&A Recovery, a State Appropriations UDAK will be charged. Click here to read the memorandum establishing this procedure "Policy/Procedure for Financial Closeout of Sponsored Projects".

11. GCA will monitor projects that have been financially closed until all expenditure obligations have been satisfied and all outstanding sponsor payments have been received and processed. GCA will transfer residual revenue for corporate clinical trials in accordance with Procedure 4-4.02: Distributing Residual Funding from Corporate Clinical Trials Projects. When all adjustments are complete, GCA will inactivate the Sponsored Project UDAK in the accounting system.