Closeout Accruals

Accruing for Expected Award Expenses

An expense accrual is the recording of the cost estimate for a product or service that was delivered during the award period but has not yet been recorded in the General Ledger. Most non-payroll expenses that, in the past, were included on the Closeout Instructions for an Award (a.k.a. Concurrence Report) as "adjustments" should now be handled as accrual journals directly in BFS. This will ensure all direct expenses are recorded in the GL at award close and keep our processes in line with federally-mandated requirements.

Examples of Expenses to Accrue

  • Subaward services performed where the invoice has not yet been received and/or processed
  • Recharges which have not yet shown up as expenses in the Actuals Ledger
  • Travel which occurred within the award period but the expense has not yet been recorded in the Actuals Ledger for the award

Award Accruals are Not Used For

  • Estimated expenses for goods or services which were not incurred before the award expiration date
  • Cost transfers
  • Payroll transfers
    • Please note: as of July 1, 2014, journal transfers to record payroll costs in BFS are temporarily allowed
    • Please refer to the Transfers for Payroll Expenses page for more information

When and How to Accrue

Accrue by the GL Close of the 2nd month after the award's expiration date.

The objective of closeout accruals is to ensure all award costs, regardless of their payment status, are represented in the Ledger report that supports Award Closeout Certification. While you can accrue for expenses at any time, there are a few days at the end of the Adjustment Period when award accruals must be processed so these journal entries are included in the closeout GL; it is one of the last tasks to do before submitting the Closeout Certification.

On the first business day of the third month after the award expires, run a BAIRS report to determine which anticipated expenses have not yet posted. Once you have determine what to accrue, process the accrual journal entry before the cut-off date for the second accounting period following the award expiration.

The accounting period cut-off date for any month is listed on the BFS General Ledger Monthly Close Schedule, in the row labeled "Enter all other Temporary Budget Journals/Approve Online Financial Journals."

You will need the full chartstring for each direct expense you intend to accrue.

  • Use the COA Validation page found in the BFS RA Grants WorkCenter to look up the Project and Activity values for each chartstring
  • Navigate to 'Create/Update Journal Entries'

Please be sure to make the accrual journal reversible, as this ensures the expense does not get double booked:

  • In the Journal Entry Reversal field, select 'Beginning of Next Period' and click OK
    • You may enter as many rows as necessary in the accrual journal, and finish the entry with an Accrued Liability Chartstring row
    • Always use Account 23090 for "other accrued liability" in this row
  • Post the accrual
    • You will see it in BAIRS the next day, after the overnight upload process has run

Example of an Accrual Journal for General, Travel, and Other Expenses/h4>

BUAccountFundDept IDPC BUProjectActivityAnalysis TypeJournal Line Description
10000 23090 22698 23845 GM100 1000201 01 GLR Accrued Expenses

Recording Payroll Costs

To enable timely closeout of award funds where payroll information has not been updated in the GL, the transfer of payroll expenses will temporarily be allowed via an auto-reversing journal entry (not an accrual). This applies only during the adjustment/closeout period for expiring awards (from expiration date to 90 days or more after expiration).

This procedure has been implemented due to the lag between submitting a UPAY request and seeing the subsequent payroll correction in the Ledger. This procedure is in effect until payroll systems and processes are revised. Please refer to the Transfers for Payroll Expenses page for more information.

Process any payroll transfer journal entries after payroll posts but before the cut-off date for the second accounting period following the award expiration.

Finalizing Accrued Expenses at Award Closeout (90 Days After Expiration)

On the first business day of fourth month after the award expires, around 90 days following expiration, run a BAIRS report to check that actual expenses have posted and match the accrued amount.

  • If the actual amount has not posted or is incomplete, re-accrue for the expected expense using another self-reversing accrual
    • This gives an additional 30 days for actual expenses to post
  • If the actual amount is $300 or more over the accrued amount, submit a Closeout Exception Request as soon as possible
  • If the actual amount is less than the accrued amount, please contact CGA to revise the Final Financial Report and process a refund for the sponsor

Example Timeline of When to Process Accruals for an Award

The following example timeline illustrates when to process accruals for an award that expires on July 31, with the Closeout/Final Financial Report deadline 90 days later on October 29. Please refer to Financial Accounting's Year-End Accrual Procedures for more information.

October 1, 2021 to October 7, 2021

  • Check the GL to determine if an accrual is needed

No Later than October 7, 2021

  • Accrue expense before the cut-off date of the second GL cycle following the award expiration
  • Date the accrual entry for September 30, 2021 with an automated reversal on October 1, 2021

October 10, 2021 to October 29, 2021

  • Submit a Closeout Certification form to CGA by the next business day
  • CGA will send a Final Financial Report/Invoice to the sponsor on October 29, 2021

November 1, 2021 to November 7, 2021

  • Check to see if the actual expense was recorded
    • If the actual expense is greater than the accrual, clear the deficit
    • If the actual expense is less than the accrual, contact CGA

No Later than November 7, 2021

  • If the actual expense is not recorded or is incomplete, record a subsequent accrual
  • Date the subsequent accrual entry for October 31, 2021 with an automated reversal on November 1, 2021

Award Inactivation (120 days after expiration)

If the actual expenses still have not posted by 120 days after the award expiration, the department is responsible for the costs. CGA will revise the final invoice, refund the sponsor for the accrued amount, and inactivate the award fund. The department is responsible for any accrued expense where the actual cost has not posted to the GL by 120 days from the award expiration date.