Section 12. Closing Out a Project

Closeout Procedures

Grants are considered completed when all work under the grant is finished, or on the date on which federal grant support comes to an end. If, at the end of the project period, the Principal Investigator (PI) has not secured a continuation, supplement or no-cost extension, closeout must be conducted. Since granting agencies usually do not send notices of upcoming end dates or expiration letters, it is the responsibility of the PI to check the award document for all pertinent details about closeout procedures, required documents or reports and dates. RSP will send each PI a notice of the upcoming end of the period of performance 90 days prior to the end date. This notice will require the PI to review grants/funds for specific purposes at these intervals and to assist RSP in preparing for the termination of the project. (Insert link to a standard upcoming end date notice sample).

The closeout of a project is the process by which the sponsor determines that all applicable administrative actions and all scientific work on the grant have been completed. The requirement to retain records is not affected by closeout, nor is the federal government's right to audit records. In addition, grantee's responsibility to be accountable for property, royalties and program income is not affected by closeout.

Key features of closeout are the submission of all final technical and fiscal reports and the settlement of cash (including disposition of property). Unspent balances may have to be refunded to the sponsor. Charges to the project are not permitted after the termination date, although purchase orders for outstanding items (i.e., encumbrances) or other final disbursement such as last payroll or monthly billing charges may still be honored. Salaries for work performed by either salaried or OPS employees, purchasing, and travel must all be performed clearly within the project period dates.

RESPONSIBILITIES:

The completion of the final reporting responsibilities is a shared responsibility of the principal investigator (PI) and the Research and Sponsored Programs (RSP). The following list is a guide to the usual required close out procedures identified by the primary responsible party. An RSP Project Close Out Review/Checklist may be used as a guide in reviewing projects prior to and after the end of the project period. This sample list may be found at (insert link) but should be modified to reflect any other requirements identified in the prime award.

• PI:
  • Ensure prior to the end date that all obligations and encumbrances are complete and all charges, except standard monthly charge backs (copy service, postage/shipping charges, phone service), related to the project are appropriately charged to the account.
  • Ensure that any standard charge back orders or arrangements are discontinued as of the effective end date or are changed to an alternate source,
  • Ensure that any personnel appointments which need to be changed to another salary source are completed at least 2 weeks prior to end date and that any required notices of non-renewal of appointment have been completed per University Human Resources policy available at http://uwf.edu/ohr/policies.cfm or as otherwise described in Section 8 Hiring Research Personnel.
  • Coordinate any required documents or reports with subrecipients.
  • After end date, work with RSP Post-award to insure that required reports and/or invoices are submitted to the sponsor.
     
• RSP:
  • Provide notice of upcoming end date 90 days prior to end of period of performance.
  • Prepare any final invoices or reports on financial operations and inventory of equipment to sponsor in collaboration with PI.
  • Monitor status of accounts receivable until payment is made on any final invoices.
  • Prepare final expenditure report of the grant life-to-date and budget transfers to recover deficit expenditures or distribute applicable fixed price residual shares per the formula below.

1. Residual funds remaining at the end of a fixed-price contract need not be returned to the funding agency. Distribution of any unexpended funds will be completed according to the University Procedure (approved by Faculty Senate and adopted by the Provost December, 1999). (See Section 6 and Section 7 for terms and conditions regarding acceptance and budgeting for Fixed Price Contracts). Given these criteria, the University will accept such contracts that include these measures of performance and deliverable. Upon close-out (including determination that all appropriate charges related to the performance have been met by direct cost allocation), if prudent and efficient management has allowed the PI to complete the deliverables for less than the agreed upon price/unit/fee, the residuals (unexpended funds) will be distributed as follows:
    
   1. For contracts with total budgets of less than $5,000, 100% of the residual is returned to the PI.
   2. For contracts equal to or greater than $5,000, two distribution schedules apply based on Facilities & Administration (indirect cost) recovery.

      1. For projects which recover less than 8%, the distribution is:

      40% to the SRT;
      40% to the PI;
      10% to the department/center/institute; and
      10% to the college/division.

      2. For projects which recover F&A equal to or greater than 8%, the distribution is.

   80% to the PI;
   10% to the department/center/institute; and
   10% to the college/division.

If it is determined after the distributions have been made that the agency has over-compensated the University, the recovery for any disallowed payments is made according to the approved Procedure for Recovery of Deficit Expenditures.

2. Expired Accounts With Deficit Balances

1. Expired accounts are checked for receipt of all outstanding invoices.
2. If a deficit remains in the expired account the PI is contacted via telephone to discuss and provide a source account from which to recover the deficit. Usually, funds needed to cover deficits are first taken from the PI’s seed account. If the PI’s seed account balance is insufficient, then the department, the college, and the division are responsible for covering the unrecoverable funds.
3. If there is a residual (unexpended) balance, the funds are distributed as shown in Fixed Price section above.
4. A budget transfer closing the account by transferring funds to cover the deficit or to distribute the residual shares is prepared and sent to the PI for signature. The attached cover letter explains that if the signed budget transfer forms are not received back in Research within ten (10) working days, it is assumed that the PI approves and forms will be processed. The appropriate dean and department/division head are also copied.
5. When the account balance is cleared a final cash flow/grant life-to-date statement is printed and the grant folder is moved to the expired grant files in accordance with the Records Retention schedule which applies.

Closeout Documents

Final Technical Report

Many sponsors (including all federal agencies) require submission of a final technical report, although each agency may prescribe a different format. If special forms are to be used, the agency will send them directly to the PI or provide a sample in the award or a web address for download of the required format. When the report is completed, RSP will coordinate submission of the report to all required recipients by a receipted delivery process or the PI may submit it directly to the sponsoring agency. A copy of the cover letter, transmittal confirmation and the report should be sent to RSP, to notify the university that the reporting requirements have been taken met. If the report is required for final invoice or billing approval, a full copy is requested 5 working days before the deadline for submission to support these final financial actions.

Final Report of Inventions

Most sponsors require reports about inventions made during the conduct of research to insure disclosure, if applicable. Usually such declarations are made via a standard format, either annually or at the end of the project period. Investigators may confirm specific requirements for each sponsor in the award document or by contacting RSP Pre-award staff. Copies of the Final Report for Inventions should be submitted to RSP office along with required technical reports for receipted delivery of the documents.

Final Fiscal Report

The final fiscal report is generally due 60-90 days after the end of the project period for a federal prime award project or 30-60 days for a subaward or state/local government/private sponsor. This report is prepared by RSP Post-award staff and is usually submitted directly with copies to the PI for verification prior to submission . It is advisable that principal investigator monitor project obligations closely, by careful review of the accounting records throughout the project period, to make sure all expenditures are accurately recorded. It is recommended that these records be reviewed at least monthly in order to make any corrections within the next 30 day budget period. The completed final fiscal report is sent to the sponsor's project director by RSP Post-award staff. The researcher receives a copy of the report and transmittal letter when it is submitted to the agency.

Since OMB Circular A-21 requires a certification of charges, the Post-award office will provide the statement, "I certify, to the best of my knowledge, that all expenditures reported are for appropriate purposes and in accordance with the agreements set forth in the application and award documents," and endorse it with the signature of the accountant in charge and PI, if agency terms require it.

Final Property Inventory

Many grants and contracts do not require a final property inventory. For those agencies that do require a final property inventory, contact RSP Post-award staff.

Some agencies will not release new funds to a PI, or even to the institution, if all the reports due at close-out are not submitted on a timely basis.

Disposition of Equipment and Excess Supplies

When original or replacement equipment is no longer to be used in projects or programs currently or previously sponsored by the federal government or by the sponsor agency, (see Section 11 Records Retention for more information) disposition of equipment shall be made as follows in accord with the applicable OMB Circular A-21 and OMB Circular A-110 guidelines.

Equipment with a unit acquisition cost of less than $5,000 may be retained, sold, or otherwise disposed of, with no further obligation to the federal government.

Equipment with a unit acquisition cost of $5,000 is usually retained or sold, with the federal government entitled to an amount calculated by multiplying the current market value or the proceeds from the sale by the federal share of the equipment. Of the amount due, $100 or 10 percent of the total sales proceeds (whichever is greater) may be deducted from the amount due for handling charges. The balance of money due will be remitted to the sponsor by check.

In some very limited instances, the federal agency may reserve the right to transfer equipment costing $1,000 or more. When this is the case, the award terms will stipulate so and specifically identify the property affected. This right lapses if it is not exercised before other permissible disposition takes place or before 120 days after the end of the grant. If the granting agency exercises this right, the grantee must be paid for the non-federal share of the market value plus shipping costs.

Special authority exists in some research grants to Universities to vest title to equipment and supplies without obligation to the federal government (i.e., exempt property). If the cost is over $1,000, this authority exempts the property from all rules except the right of the federal agency to require transfer.

If supplies exceeding $1,000 in total aggregate market value are left over upon expiration of the grant or subgrant for which they were acquired and the supplies are not needed for any project or program currently or previously sponsored by the federal government, the grantee may retain or sell them, paying the granting agency its share of the market value or sale proceeds. If sold, grantees may deduct from the federal share the greater of $100 or ten percent of the proceeds as selling expenses. The balance due is remitted to the sponsor by check.

If, at the end of the grant, the residual value of supplies is $1,000 or less, the grantee may, at its option, either retain or sell the property without compensating the federal agency.

Grantees should be careful not to build up an overly large inventory of supplies, particularly if the value greatly exceeds $1,000. These costs could be considered unallowable under the cost principle rules which stipulate that costs must be reasonable and necessary.

Subrecipients:

The University is usually required to flow-down the requirements that are part of the prime award on fiscal activities, inventions, and equipment to all subcontractors or subawardees. If such a requirement applies to a subrecipient, the documentation will be included in the formal subaward instruments (purchase order for services; subaward or subcontract) as part of the contracting procedures. The PI is responsible for insuring that any required reports or documents are submitted as part of the final reporting process. For information, the PI should refer to the prime award documents and the subrecipient documentation or contact Research & Sponsored Programs.