Award Close Out Procedures

Transcription

1 Award Close Out Procedures 1. Overview 2. Requirements 3. Responsibilities 4. Reporting criteria 5. Pre-close out review 6. Notice of award termination 7. Final close out procedures 8. Timeline of major activities 1. Overview Award close out procedures at the University are primarily focused on achieving the following goals in accordance with Agency and University requirements: a. Preparing all final reports (including cost share reports) and invoices for submission to the awarding agency. b. Inactivating the fund in JDE. Agencies of the federal government, as well as non-federal organizations, demand strict adherence to the reporting requirements set forth in the award document. Federal and Non- Federal sponsors often require periodic interim financial reports in addition to final financial statements. 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 agency withholding an award(s) to an investigator or to the entire University, withholding of payments on invoices, or revocation of the Expanded Authorities Agreement. The Expanded Authorities Agreement 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. 2. Requirements Most contracts and grants require a final report of the award s project costs. This report is usually submitted to the agency at the end of the award period. In addition, some awards also require interim reports to be submitted to the agency during the life of the award. For grants or contracts sponsored by federal and non-federal agencies, financial reports will be submitted to the agency by Extramural Funds Accounting (EFA), New York Office, no later than the due date specified in the award document.

2 3. Responsibilities EFA is responsible for preparing and submitting all interim and final financial reports to awarding agencies. The Principal Investigator (PI) and OSP must ensure all costs are correctly recorded on a timely basis in the general ledger. If there are additional costs or adjustments to costs not yet recorded in the correct general ledger for the award 65 days after the award termination date, it is the responsibility of the PI or OSP to advise EFA. The written notice of these unrecorded expenses must be sent by and received by OSP at least 20 days prior to the due date of the report. 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 expenses are correctly recorded in the general ledger in a timely manner. 4. Reporting criteria The reporting process is based on the premise that all expenses posted to the general ledger for that award are accurate and allowable under the terms of the award. This assumption is made with the understanding that grant and contract funds are actively managed on an ongoing basis from the date of activation to the date of final termination. Periodic reviews of the costs incurred during the budget period must be routinely undertaken by OSP and the PI and adjusting entries processed as needed and before the end of the budget period. Direct cost expenditures that are considered erroneous or unallowable amounts must be adjusted and journalized to the appropriate source of funding within 120 days of the original transaction. A full review of the accounts must be completed 65 days or sooner, of the termination date to ensure that adjustments are processed during the adjustment period and before issuance of the financial report. 5. Pre-close out review The Grants Manager responsible for the fund should coordinate the pre close-out process as follows: a. Preferably at least 3 months prior to expiration of the budget period the Grants Manager should review the fund(s) relating to the award. b. The review should be undertaken with the collaborative effort of the PI and the Grants Manager. c. All categories of direct cost (salaries, equipment, supplies, tuition, etc.) must be reviewed for completeness, accuracy and allowability before the close of the budget period. d. All necessary adjusting general journal entries and /or payroll adjustments should be made preferably before the close of the budget period or if this is not possible during the 65 day adjustment period described below. e. If the PI needs more than the allotted time to close an award, the Grants Manager needs to request an extension from the agency. EFA cannot extend the performance time of an award. The termination date will change when EFA receives the modification from OSP.

3 6. Notice of Award Termination a. Notice of Award Termination is sent to Grants Manager 30 days prior to the termination date of the award, requesting a closeout concurrence within 70 days after the expiration of the award. b. For early terminations, less than 90 days to report after the award expired, the notice indicates Early Termination and is sent to the Grants Manager 60 days prior to the termination date of the award. c. The Grants Manager must advise all appropriate parties of the notice to terminate the award and action required by them to allow timely closure of the award. 7. Final close out procedures a. Adjustment period The "Adjustment Period" is the 65 day period that begins at the end of the last day of the final project budget period and concludes 25 days prior to the due date of the final financial report. Example; if an award terminated June 30, 2010; the "Adjustment Period" is July, 1, 2010, through September 5, 2010, (i.e. terminates on the departmental general ledger cut-off date for the August general ledger). The Adjustment Period is provided for the purpose of ensuring all final accounts payable transactions, payroll, recharge and other final adjusting entries that could not be processed during the final month of the budget period, are posted to the general ledger. It is during this period that all final adjusting entries must be processed allowing sufficient time so that all changes can be posted to the G/L by the close of this adjustment period. The following procedures should be followed by the PI during the adjustment period. i. All activity must be concluded prior to the award closing and never beyond the last day of the performance period of the award. ii. Ensure that transactions from recharge centers are posted and transactions are authorized and acceptable. Recharge centers must be notified before or immediately upon the termination date of the award. iii. Subcontract / subaward balances should be verified to be correct. iv. If the final invoice for a subcontract has not been received the PI or OSP should contact the subcontractor for the invoice. v. All required payroll adjustments must be posted either during the budget period but not later than the close of the Adjustment Period allowing sufficient processing time so that the results can be viewed through G/L. vi. OSP will verify overhead posted to the award for accuracy, refer any adjustment to EFA. Only EFA is authorized to post Overhead adjustments to the G/L.

4 vii. Review G/L to ensure that all posted transactions are project related and that encumbrances accurately reflect open commitment status and amount. Address any erroneous postings prior to the close of the Adjustment Period. viii. If required, Cost Sharing reports should be prepared and sent to EFA by the end of the Adjustment Period. ix. The PI and OSP should close all open PO's by the end of the adjustment period unless notice of unrecorded AP/PO liabilities has been sent to Purchasing. In which case the PO should be closed as soon as the related invoice has been paid. x. If 70 days after the award termination date EFA has not received a concurrence notice by or an extension has not been requested through OSP, EFA will close out the award and if applicable refund any amounts due to the agency - see following section. b. Final financial report preparation and inactivation of fund/award i. If a closeout concurrence is received within 70 days after the award expired, EFA will prepare the final expenditure report according to the information and instructions provided by the Grants Manager. A financial report will be prepared based on the general ledger balances for the award as described above and will be issued based on the amount of expenditure activity recorded in the general ledger during the reporting period. Hence if the award has a credit balance (i.e. Appropriated/budgeted funds not spent at the time of closing), the balance will be reported and if necessary amounts will be refunded to the agency. ii. A "Monthly Budget Report" will be submitted to the PI. The Grants Manager should advise all appropriate individuals including the PI of any unexpended balance. iii. EFA will inactivate the fund unless the fund has balances in the fund balance account which need to be cleared, unbilled/overbilled amounts, or unrecorded items included in the final report that are not yet posted to the ledger. iv. Overdrafts and expenses deemed unallowable by EFA should be cleared during the adjustment period. In the event that the Grants Manager has not complied with these procedures and these amounts have not been cleared by the end of the adjustment period, these expenses will not be reported to the agency and must be reversed by the Grants Manager and charged to an appropriate funding source. If after 120 days from the termination date the Grants Manager has still not cleared the overdraft. EFA will charge the balance to an unrestricted fund source of the PI or College (if funds are not available). v. Grants Manager must ensure any accrued expenses included in the final report are posted to the general ledger within 120 days of the award termination. vi. Unexpended balances will be cleared on or after 120 days and if appropriate, funds (net of any receivables due from the agency on this award) will be returned to the agency and final reports will be revised. In some cases if the agency agreement allows unexpended balances will be transferred to the College Revenue fund and will be subject to Administrative Full Costing. This situation will occur if after 120 days the department has not posted the charges which they noted as unrecorded at the time of the concurrence. vii. Requests to revise final reports will be based on applicable University and/or agency policy.

5 8. Timeline of major activities 0 days prior to award expiration PI and the Grants Manager reviews activity and prepares for final close out. 30 days prior to award expiration EFA sends "Notice of award of Termination" to the Grants Manager days from date of award expiration Adjustment period PI and the Grants Manager reviews activity, makes final adjustments days from date of award expiration EFA will submit financial report to agency, refund any amounts due to the agency and inactivate the fund in JDE (unless the fund has outstanding transactions included in final report that are not yet posted to the general ledger at the time of filing the final report). After 120 days from date of award expiration If balances have not been cleared after 120 days, EFA will inactivate any outstanding terminated funds in JDE, write off any outstanding overdrafts and refund the agency for any unexpended funds received. On monthly basis: EFA reviews all closed funds (i.e. funds where the final financial report has been issued to the agency) and automatically inactivates all closed funds with a zero balance; Zero balance is defined as: At the fund level actual revenue/expenditures less budgeted revenue/expenditures = 0.