Contracts and Grants Accounting
Award Closeout Procedures, Final Reporting, and Fund Inactivation
Most contracts and grants require a final report of the award's costs. Agencies of the federal government, as well as non-federal organizations, demand strict adherence to the reporting requirements set forth in the award document. Final financial reports will be based on information recorded in the General Ledger (GL). Contracts & Grants Accounting (CGA) will submit the Final Financial Report to the sponsor no later than the due date specified in the award document.
- Pre-Expiration Review
- Adjustment Period
- Preparing the Award Closeout Certification
- Final Financial Report, Deficit Clearing, and Fund Inactivation
For grants or contracts sponsored by federal and non-federal entities, financial reports will be submitted to the sponsor by Contracts & Grants Accounting (CGA) no later than the due date specified in the award document. CGA is responsible for preparing and submitting all interim and final financial reports to awarding sponsors using information provided in the general ledger (GL).
The Principal Investigator (PI) and Department Manager (DM) must ensure all costs are correctly recorded on a timely basis in the General Ledger. If additional time is required for award activities, it is the PIs responsibility to request a no-cost extension through SPO no later than 60 days prior to award expiration. If there are additional costs not yet recorded in the General Ledger when an award expires, it is the responsibility of the PI or the Department Manager to see that accruals for expected expenses are posted to the GL by the GL close of the 2nd month after the Award's expiration date. The PI is ultimately responsible for management of the award and, as such, must ensure that all expenses charged are accurate and allowable under the terms of the award and that expenses are correctly recorded in the general ledger in a timely manner. The DM should coordinate pre-close out and adjustment period tasks and procedures to facilitate award closeout.
Failure to submit a financial report within the specified time frame puts the University at risk of having punitive actions imposed. Such action can include an awarding sponsor withholding an award(s) to an investigator or to the entire University, withholding of payments on invoices, or revocation of the Expanded Authorities Agreement, which affords the University latitude in the budgeting and management of federally awarded grant funds. Situations giving rise to such actions would undermine the University’s research and training functions, both being core functions of the University. Therefore adherence to close out procedures is non-negotiable.
Before the award expiration date, the Department should conclude all expenditures and make all necessary adjustments to general ledger journal entries and/or payroll adjustments to correct award transactions.
Only expenses recorded in the General Ledger can be included in the Final Financial Report to the sponsor.
90 days before an award expires CGA will send a Notice of Expiration to the PI, the RA, and the DM who should review award transactions – including cost shared expenses-- in all categories of direct costs (salaries, equipment, supplies, tuition, etc.) to ensure they are complete, accurate and allowable. CGA recommends using the following reports to review award spending:
- PI Portfolio: includes award budget, actuals, encumbrance, and balance information. The report summarizes expenditures against the fund by account, including allocations and expenditures on all Dept IDs charged to the fund. PIs can log into PI Portfolio from Cal Answers.
- BAIRS Ledger Account Summary: includes budget, actuals, encumbrance, pre-encumbrance and balance information. The report summarizes expenditures by account (Note: CGA uses this report to produce the Final Financial Report for the sponsor).
- BAIRS Fund Balance Report: includes everything in the Ledger Account Summary, with expenditures summarized by summary account group. Departments can run this report globally, which summarizes all Dept IDs charged to the fund, to ensure no items were miscoded by other departments. (Note: even if the user has not been granted access to other departments in BAIRS, a global report will include all charges on the fund).
See a full list of available BAIRS reports. Also see this Job Aid describes four new BAIRS financial reports based on existing BAIRS reports with added features to support C&G data and proceses.
The DM and/or RA must advise all appropriate parties of action required to facilitate timely closure of the award:
- Recharge centers must be notified to change the chartstring before or immediately upon the expiration date of the award.
- Subcontractors should be notified to submit their final invoices by the award expiration date.
- Initiate all required UPAY payroll adjustments.
- Initiate any required cost transfers to ensure all expenditures are complete, accurate and allowable. When an award involves multiple departments, the Department Manager should verify expenditures from all other DeptIDs on the award fund.
If a no-cost extension is needed, the PI must request it through SPO at least 60 days before the award expires -- see No-Cost Extensions for deadlines and procedures. CGA will change the award end date when the modification notice is received from SPO. CGA cannot extend the performance time of an award.
60 days before an award expires CGA will send a second Notice of Expiration to the PI, the RA, and the DM as a reminder to take all actions required to allow timely closure of the award.
30 days before an award expires CGA sends the last Phoebe Award Summary Expiration.
All expenditures must be incurred by the award expiration date. No new expenditures can be initiated after the last day of the performance period of the award.
An “Adjustment Period” is provided after the expiration of an award for the purpose of ensuring all final accounts payable transactions, payroll, recharge center (e.g. OLAC) and other final adjusting entries that could not be processed previously, are posted to the General Ledger and available in BAIRS prior to preparing the Final Financial Report.
Use the Adjustment Period to record all award expenses -- either actual expenses or accruals – in the General Ledger, as only these transactions can be included on the Final Financial Report.
The Adjustment Period begins the day after the award expiration date (the last day of the final budget period) and concludes upon the GL close of the 2nd month after the Award's expiration date (when the closeout certification is due).
- Review the G/L to ensure that all posted transactions are award related and accurate. Ensure any bluCard transactions are authorized and acceptable. Address any erroneous postings via cost transfer.
- Clear overdrafts and transfer expenses deemed unallowable by the cut-off date for the 2nd accounting period after the award expiration date.
- Verify final transactions from recharge centers are posted by the cut-off date for the 2nd accounting period after the award expiration date.
- Verify subcontract/subaward balances are correct.
- Confirm all required payroll adjustments requested via UPAY have been posted in the G/L. UPAY transfers must be completed within 50-57 of award expiration. Note: GL journal entries for late payroll adjustments are temporarily allowed -- read more.
- Verify cost sharing expenditures, if required, are properly coded and recorded in the GL by the cut-off date for the 2nd accounting period after the award expiration date. Cost Sharing reports should be prepared and submitted by the end of the Adjustment Period.
- Create an auto-reversing accrual for expected expenditures incurred during the award period, but that have not yet posted to the GL. (note: Concurrence Notice or other written notice of outstanding expenses is no longer allowable.) Post accruals no later than the cut-off date for the second accounting period following award expiration -- read more about Accrual Procedures at Award Closeout
- Accrue expected cost share expenses, if required, using the same procedure
- Close all open POs for which all invoices have been paid by the end of the adjustment period (instructions for closing POS are linked here).
- Deactivate applicable speedtypes and notify staff of the change.
- Verify Overhead posted to the award for accuracy and refer any adjustment to CGA. Only CGA is authorized to post Overhead adjustments to the G/L.
CGA will ensure the following are completed during the Adjustment Period:
- Notify the DM of any unallowable overdrafts and expenses to be cleared during the adjustment period.
- If the department requests, investigate and make any necessary adjustment to Overhead. Only CGA is authorized to post Overhead adjustments to the G/L.
- Invoice the primary awardee where UC is the recipient of a subaward (or request an intercampus fund transfer if the primary awardee is another UC campus). CGA must bill the other campus within 60 days of award termination.
- Ensure requests for reimbursement sent to CGA by UC subaward recipients are processing via Intercampus Transfer and the amounts are recorded in the fund.
At the end of the Adjustment Period, the PI and DM need to confirm that all award costs – subaward costs, recharges, accruals, cost sharing, etc. – have been recorded in the GL by the cut-off date of the 2nd accounting period following award expiration (i.e., no “surprise” expenses will surface later). This is done by submitting an Award Closeout Certification form (as of July 1, 2014 the Certification form replaces the Concurrence Report, aka Closeout Instructions for an Award).
If the University has committed cost share for an award, the department must complete and submit a Cost Sharing Contribution Report as part of the Closeout Certification. The completed report must be certified by the PI and submitted online as an attachment to the Closeout Certification Form, along with supporting GL documentation. Read more about reporting cost sharing.
The Award Closeout Certification form and all supporting documentation are due no later than the GL close of the 2nd month after the Award's expiration date.
Use the RA Grants WorkCenter in BFS to complete the Certification form, attach the Ledger report, Cost Sharing Contribution Report, and all other supporting documents. BFS workflow routes the Certification to a Supervisor for approval, and then submits the entire “package” online to CGA. Read detailed instructions for completing and submitting a Closeout Certification.
CGA will review the Certification and support documents for completeness, compliance, and accuracy before preparing the Final Financial Report. If CGA has not received a Certification, or notice of a no-cost extension requested through SPO, by the GL close of the 2nd month after the Award's expiration date, CGA will close the award based on GL transactions alone to meet the sponsor’s 90-day closeout deadline.
Following the Adjustment Period and submission of the Closeout Certification, CGA reviews award transactions for accuracy and compliance, and prepares the final expenditure report and/or invoice for the sponsor. CGA will prepare and submit the Final Financial Report to the sponsor no later than 90 days after the award expires (or sooner, if the sponsor deadline is less than 90 days).
If the department has not submitted a Closeout Certification, CGA will close the award based on expenditures recorded in the general ledger by the cut-off date for the second account period following award expiration.
CGA will complete the following for Final Award Close (90 days after expiration):
- Prepare and submit Final Financial Report (Final Invoice) to sponsor
- Includes Cost Sharing Report, if applicable
- Processes any refund due to the sponsor
- Prepare an "Expenditure Summary Report" (FSCG-50), which serves as the department’s final financial report for an award
The RA/Department should complete the following tasks ~90 days after award expiration:
- Check that actuals have posted for accrued expenses. If the actual expense still has not posted (or if posted expenses are incomplete), re-accrue for anticipated expenses before the accounting cut-off date for the third period following award expiration.
- If the actual expense is greater or lesser than the accrued amount, there are additional actions to take -- read more about Accrual Procedures at Award Closeout.
- Close any remaining open POs to prevent inadvertent vouchers against the award (instructions for closing POS are linked here). Note: until all POs are closed, the award will remain in a BFS status that allows transactions to be posted.
- Clear any deficits to another fund. Unallowable costs or excessive spending should be cleared by the department to another fund, or these balances will be swept into Deficit Clearing on or after 120 days.
Closeout Exception Request: There may be rare instances where the RA/Department needs to charge the award for expenditures that were not included in the Ledger supporting the Closeout Certification. The CSS-RA/Department should submit a Closeout Exception Request (available in the BFS Grants WorkCenter) to CGA as soon as the omission is discovered, and no later than 120 days after the award expiration.The corrective actions CGA can take depend on the reason for the request and the time frame of the request submission. Read more about the Closeout Exception Request Process.
Deficit Clearing and Fund Inactivation
Spending in excess of the authorized amount must be transferred to an appropriate funding source by the ledger cycle cut-off date of the month prior to the FFR due date. If the department has not cleared these charges, CGA will transfer the entire balance to the award’s primary department ID (as outlined in the C&G Deficit Clearing Process). Requests to revise Final Financial Reports will be based on applicable University and/or sponsor policy.
On a monthly basis, CGA reviews all expired awards where the Final Financial Report (FRR) has been issued to the sponsor and inactivates the funds of awards that have no pending transactions or activities.
Unexpended balances: Occasionally a sponsor agreement allows the unexpended balance on a fixed-price contract or nonrefundable grant to be retained by the University. On these occasions, the PI can request that CGA transfer the balance (less Administrative Full Costing) to the Departmental Revenue fund. Read the Procedures for Unexpended Balances on Fixed Price Contracts and Nonrefundable Grants (PDF).