Effective Date: March 1, 2019

The official version of this information will only be maintained in an online format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material online prior to placing reliance on a dated printed version.

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 sponsor’s award terms and conditions.

Policy Statement

This policy ensures compliance with Office of Management and Budget (OMB) 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. Uniform Guidance (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 staff in Sponsored Projects, 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 in a timely manner 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. Noncompliance with sponsored project reporting terms 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.

Sponsored Projects is responsible for preparing interim financial reports, final financial reports and invoices based on financial information reflected on Workday general ledger and ensuring 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 Sponsored Projects staff to sign and submit all financial reports to the sponsor on behalf of the institution. On rare occasions and with the prior approval of Sponsored Projects, financial reports may be submitted to the sponsor by the department in collaboration with Sponsored Projects staff.

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. Sponsored Projects will prepare and submit a report to the sponsor based on the transactions posted to the general ledger as of the end date of the interim reporting period. However, in instances when the 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 Sponsored Projects within the period specified. In cases where draft interim financial reports are not returned within the specified period, the interim financial report will be certified by Sponsored Projects and submitted to the sponsor based on University’s financial records and without PI and/or departmental approval.

Final Financial Reporting

The PI and/or department administrator must certify financial rough draft reports and return them to Sponsored Projects within the deadline specified. PI and/or department administrators should reflect legitimate adjustments on the financial rough draft prior to returning the certified report to Sponsored Projects. In cases when the draft final financial rough draft report is not returned to Sponsored Projects as instructed, the Sponsored Projects staff 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 Sponsored Projects. Sponsored Projects 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 that indicate unliquidated obligations or commitments. As stated in the National Institutes of Health (NIH) Grants Policy Statement, final financial reports must indicate the exact balance of unobligated funds and may not reflect any unliquidated obligations. For any unique circumstance that may require a final financial report to be filed with unliquidated obligations or commitments, the Sponsored Projects team, in consultation with the sponsor, will report the unliquidated obligations on the final financial report.

Revised Final Financial Reports

Revision to a financial report or final invoice should be rare and must be legitimate. Sponsor 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.   

Some sponsors may not require a revised final financial report under a certain threshold but 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 Sponsored Projects 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.

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.

Annual Progress and Technical Reports

Depending on the reporting terms of an award, annual progress and/or technical reports may be required. The progress and technical reports are prepared and submitted to the sponsoring agency by the PI. The submission of required progress and 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 Sponsored Projects. 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. PIs are responsible for completing invention reports or statements and routing the reports to Sponsored Projects for approval and final submission to sponsors. 

Property Reports

If award terms require the submission of a property report, Sponsored Projects will complete a report in consultation with the PI or their designee and the Controller’s Office. Sponsored Projects 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 are satisfied, the Sponsored Projects team is responsible for permanently closing or inactivating the award in both Brown’s grants management system and financial system (Workday). Once the award is inactivated in Workday, no further financial activity can occur. Sponsored Projects 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.

Closeout

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

• Completion and submission of nonfinancial deliverables stipulated in the award document by the PI and/or Sponsored Projects
• Submission of final financial reports and invoices
• Final payment requests (for line of credit drawdowns)
• Inactivation of an award hierarchy in Workday (inactivation of all grant worktags associated with an award)
• Changing the award status to “Close” in Brown’s grants management system

Final Financial Reports and Final Invoices

Final financial reports or final invoices are the accounting of expenditures and obligations incurred during the period of performance 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 Drawdown

Funding issued via a letter of credit must be drawn down within 90 days of the end of the award. These drawdown requests are made by Sponsored Projects monthly and based on expenditures posted to the general ledger.

Final Number

The cumulative expenditures reported to the sponsor are known collectively as the final number. 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 financial rough draft report is a draft of the financial report certified by the PI and/or department manager. Changes and adjustments are also included on this document.

Interim/Annual Financial Reports

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

No-Cost Extension

A no-cost extension is a mechanism to extend the performance period of an award without adding additional funding. No-cost extensions typically must be requested before the award period ends.

Progress or Technical Report

A progress report, or technical report, is a programmatic report of the project that includes the science or technical aspect of the project. This report is the PI’s responsibility.

Unliquidated Obligations

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

Unobligated Balance

An unobligated balance is 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

Unreconciled accounts are expired or terminated awards that have a status in Brown’s grants management system other than “Closed” because there is a difference between what was reported to the sponsor and what is reflected on the general ledger. In some cases, there may be outstanding nonfinancial reports. These present obvious risks and must be managed and fully closed out or disabled to limit their financial risk.

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

The Sponsored Projects team is available to help PIs, department managers and financial coordinators understand the terms and conditions of an award, including report due dates and processes.

PI

• 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 closeout policies and procedures.
• Certifies final and interim financial rough draft reports by the due date set by Sponsored Projects during the reporting period
• Ensures final invoice from subawardees is received and all payments have been processed prior to confirming final expenditures
• Determines whether the project will end up with an unobligated (unexpended) balance, and is 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?  
• Understands and complies with the technical/programmatic reporting requirements of their award, including reporting formats, templates and any online submission portals 

Department Manager/Financial Coordinator

• May certify final or interim financial rough draft report on behalf of PI and submit by the due date set by Sponsored Projects
• Determines whether the project will end up with an unobligated (unexpended) balance, and is 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?
• Reviews Workday general ledger reports regularly (no less frequently than monthly and more frequently for high dollar awards) to ensure costs are properly and completely recorded
• Provides the Sponsored Projects team with any requested documentation to support questioned charges by the due date set forth by Sponsored Projects during the reporting period
• Submits to Sponsored Projects all adjustments after the performance period along with adequate documentation; processes adjustments immediately, once approved by Sponsored Projects; and provides the operational transaction number (e.g., journal number, supplier invoice number) on the report 
• As may be required per sponsor award documentation, prepares interim and final reports and submits reports to Sponsored Projects for review and approval before submitting reports to sponsor
• Removes all over-expenditures of an expired award within the pre-defined deadline set by Sponsored Projects
• Removes unallowable costs or sponsor disallowances from the general ledger
• Notifies service centers with recurring billings (e.g., animal charges, printing, laboratories) of the sponsored project expiration date and provides a new grant number, if applicable
• Ensures all open commitments are closed and costing allocations have ended by the due date set forth by Sponsored Projects during the reporting period

Sponsored Projects Post-Award Team

• Performs desk review of expenditures to ensure compliance, 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 the department
• Signs and submits the financial report to the sponsors based on total expenditures confirmed by the PI and/or department manager
• Submits the final invoice to the sponsor or processes the final cash draw, if applicable
• Reconciles payments against cumulative expenditures reported and ensures all payment has been received
• Refunds or transfers the unexpended cash balance per the award terms and conditions
• Processes final project budget adjustments and general ledger closing entries as may be necessary
• Obtains confirmation from the PI and/or department manager that all required nonfinancial deliverables have been submitted to the sponsor
• Closes out the award in Brown’s grants management system and requests the inactivation award hierarchy in Workday
• Marks the award file with a discard date
• Remits unspent funds back to the sponsor, as required

Sponsored Projects Pre-Award Team

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