Closing out a sponsored project or award involves certain activities, including reporting obligations to the sponsor, financial reconciliations, forms and reports for the institution and account closeout tasks that must be completed by the primary investigator (PI) and department in coordination with Sponsored Projects.
Division of Research
Close Out an Award
Overview of the Closeout Process
Prudent financial management of sponsored projects includes timely and accurate reporting to sponsors and account/award closeout. These functions are tested as part of the annual Single Audit by the federal Office of Management and Budget (OMB) as well as by other sponsoring agencies when requested.
On a monthly basis, the department administrator should run the Sponsored Budget to Actuals - Commitments and Obligations Report in 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. Departments close their own purchase orders. For questions, contact Purchasing by submitting a request in the OIT Service Center and assign it to Purchasing.
If you are closing a subaward, please complete the Subaward Closeout Certification Form and submit it to your Research Subcontracting grant and contract administrator and your Post-Award grant and contract accountant in Sponsored Projects. Subaward Closeout Certification Forms should be submitted whenever a subrecipient has completed its scope of work, even if the overall project is continuing into subsequent periods of performance or a no-cost extension.
Post-Award Support
Each department is assigned a Post-Award grant and contract accountant from Sponsored Projects who will provide guidance and assistance as well as answer any questions throughout the life of an award.
At the conclusion of the award, after the financial report is filed with the sponsor, and all financial obligations are satisfied, the grant and contract accountant is responsible for closing the award within the University’s financial system.
Find Your Post-Award Contact
To assist you in closing out an award, each department has a specific Post-Award grant and contract accountant within the Sponsored Projects team.
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 or service was received during the project period and determine how the item or service provided benefit during the project period, given that it was purchased close to the applicable end date. An item or service provides benefit if it has a reasonable amount of use during the project period.
Equipment expenditures near the end of the project period also should be reviewed. The following information should be included with the purchase documentation.
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Budget Justification
If the equipment was identified in the original budget proposal 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. -
Sponsor Approval
If sponsor approval, as required, was obtained for the purchase of the equipment, document that the approval was received in the purchase documentation. -
Other Funding Sources
If the equipment will not be used exclusively on this award, document how the cost was allocated to other funding sources. -
Necessity of Purchase
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 details of the equipment being replace
Equipment purchases on a sponsored program must be purchased and disposed of per the requirements outlined in the award document. At closeout, Brown retains a conditional title to equipment purchased with federal funds unless the awarding agency notifies Brown of its intent to retain the title. The equipment can be used in the project or program for which it was acquired as long as needed after the ending date of the grant or contract.
Before using the equipment for other activities or disposing of the equipment, please contact Sponsored Projects if the equipment is in working condition. Items not in working condition may be disposed of following the Disposition of Surplus Property policy.
Data Management at Closeout
Research Data Management, part of the Research Integrity team, provides centralized support, education and policy development to facilitate and promote the responsible and ethical acquisition, use, sharing and maintenance of research data at Brown.
Principal investigator (PI) transfer or terminations can involve multiple offices and actions. The Division of Research offers recommendations and requirements for a successful exit from Brown.
Final Invoices and Reports
Upon project termination, the grant and contract accountant in Sponsored Projects 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. Nonfederal deadlines may vary by sponsor. To meet sponsor deadlines there needs to be clear and timely communication between department administrators and Sponsored Projects.
Adjustments and 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 or 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
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 three months after the termination date.
Surplus
If a department has a surplus (fund balance) at the end of the project, the PI and department administrator must confirm that all appropriate expenses are posted to the project.
- If the award requires that funds be returned to the sponsor, the Post-Award accountant will process a refund to the sponsor.
- If the award states that the balance should be retained by the University (mostly firm fixed-price agreements), the Post-Award accountant will process a manual journal entry to transfer the surplus to the cost center associated with the award.
Fixed-Price Agreements with Residual Funds
In a fixed-price agreement, the sponsor pays Brown an agreed-upon amount for a deliverable, based on anticipated costs. This agreement type puts Brown at maximum risk and full responsibility for all project costs. The sponsor is invoiced based on a predetermined schedule, which is included in the award document. Federal definitions of fixed-price instruments for grants and cooperative agreements are found at 2CFR 200.45 and for contracts at Federal Acquisition Regulations (FAR) 16.201 (a). Fixed-price agreements are identified at the award acceptance step and confirmed at time of award set-up.
At award closeout, a review is done 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. Sponsored Projects will confirm that the terms and conditions of the award do not require the return of unspent funds.
For small residual balances (less than 25% of total sponsored award amount and/or less than $100,000), Sponsored Projects will initiate and transfer the direct cost portion of residual funds to the cost center and the indirect cost portion per the unit’s Facilities and
Administrative (F&A) revenue allocation method after the award period ends as part of the account closeout process.
Large Residual Balances
For large residual balances (greater than 25% of total sponsored award amount and/or greater than $100,000), the PI may request that residual funds be transferred to a non-sponsored account only after the sponsored project has ended, the work is completed, the deliverables submitted and the sponsor indicates or it is otherwise determined that the return of unspent funds is not required. To complete the request, the PI and department administrator will complete a Residual Balance Transfer Request Form for the Sponsored Projects team’s review and approval. The PI will participate in a post-closeout desk audit of completed milestones and deliverables and/or accounting review as necessary.
Once the request form is approved, Sponsored Projects will initiate the transfer of direct and indirect costs by applying the project’s established F&A rate to total unspent funds. The F&A rate applied is the rate in effect during the final year of the award.