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 and Grants Accounting (CGA) will submit the Final Financial Report to the sponsor no later than the due date specified in the award document.
Responsibilities
For grants or contracts sponsored by federal and non-federal entities, financial reports will be submitted to the sponsor by Contracts and 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 BRS Research Admonistrator (RA) 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 the Sponsored Projects Office (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 Research Administrator to see that all 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 the 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 RA 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.
Pre-Closeout Review and Notice of Expiration
Before the award expiration date, the department should record all expenditures and make all necessary adjustments to the general ledger using journal entries and/or payroll cost transfers.
Only expenses recorded in the General Ledger can be included in the Final Financial Report.
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 and cost shared expenses, if applicable, to ensure they are complete, accurate and allowable. CGA recommends using the following report 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 the PI Portfolio from Cal Answers
The RA must advise all appropriate parties of the 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. Please refer to Closeout for Subawards for more information
- Initiate all required salary and benefits adjustments in UCPath
- Initiate non-payroll 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
No-Cost Extension
If a no-cost extension is needed, the PI must request it through SPO at least 60 days before the award expires. Please refer to 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.
Adjustment Period
An Adjustment Period is provided after the expiration of an award to ensure all final accounts payable transactions, payroll, recharge center (for example: OLAC) and other final adjusting entries that could not be processed previously, are posted to the General Ledger prior to preparing the Final Financial Report. The Adjustment Period begins the day after the award expiration date (which is 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)
Please 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.
Accrual and Payroll Transfers
The RA/Department must complete the following tasks during the Adjustment Period:
- Review the GL 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 and subaward balances are correct
- Ensure completion of all required payroll adjustments in UCPath within 57 days of award expiration
- Confirm all required payroll adjustments requested via UCPath have been posted in the GL timely and without any errors
- Verify cost sharing expenditures, if required, and ensure that they are properly coded and recorded in the GL by the cut-off date for the 2nd accounting period after the award expiration date
- Create an auto-reversing accrual for expected expenditures incurred during the award period, but not yet posted to the GL, and post them no later than the cut-off date for the second accounting period following award expiration
- Accrue expected cost share expenses, if required, using the same procedure
- Close all open POs for which all invoices have been paid, deactivate applicable speedtypes, and notify staff of the change
- Verify Overhead posted to the award for accuracy and refer any adjustments to CGA (only CGA is authorized to post Overhead adjustments to the GL)
CGA will ensure the following are completed during the Adjustment Period:
- Notify the RA of any unallowable overdrafts and expenses to be cleared during the adjustment period
- Perform an indirect cost reconciliation and make any necessary adjustments
- Invoice the primary awardee where another UC campus is the recipient of a subaward or request an intercampus fund transfer if the primary awardee is another UC campus
- Ensure requests for reimbursement sent to CGA by UC subaward recipients are processed via Intercampus Transfer and the amounts are recorded to the award
Preparing the Award Closeout Certification
At the end of the Adjustment Period, the PI and RA prepare and submit the Award Closeout Certification Form confirming that all award costs have been recorded in the GL by the cut-off date of the 2nd accounting period following the award expiration.
Cost Share Reporting
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. Please refer to Cost Sharing Reporting for more information.
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. Please refer to Certifying an Award is Ready to Close for more information.
Final Financial Report, Deficit Clearing, and Fund Inactivation
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:
- Prepare and submit Final Financial Report and final Invoice to sponsor and a Cost Sharing Report, if applicable
- Processes any refund due to the sponsor
- Reduce the BFS award budget of the cost reimbursement awards with expenditures lower than the awarded total.
The RA/Department should complete the following tasks no later than 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.
- Close any remaining open POs to prevent overdrafts and disallowed expenses being posted
- Clear any deficits to another fund
C&G deficits will be swept into Deficit Clearing on or after 120 days from the award expiration date.
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 BRS RA/Department should submit a Closeout Exception Request 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. Please refer to the Closeout Exception Request process for more information and the BFS Grants WorkCenter to access the Closeout Exception Request.
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 CGA Deficit Clearing Process.
On a monthly basis, CGA reviews all expired awards where the Final Financial Report 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 submits a request that CGA transfer the balance (less Administrative Full Costing) to the Departmental Revenue fund. Please refer to the procedures for Unexpended Balances on Fixed Price Contracts and Nonrefundable Grants (PDF) for more information.