Award Close-out Procedures-an overview Review award documents Complete Reconciliation Sheet Budget Reconciliation Expense Reconciliation Oracle Balances Cost Sharing (if applicable) Questionable Direct Costs (federal and federal pass-thru) Personnel adjustments due to Sponsor Imposed Salary Caps Indirect Cost Reconciliation Subcontracts
Award Close-out Procedures Analysis of Effort for Key Personnel PI Certification Completion of Final Financial Report (report varies by sponsor) Additional Close-out Documents Final Report of Inventions and Subcontracts Final Property Report Contractor’s Release Contractor’s Assignment of Refunds, Rebates, Credits and Other Amounts
Award Close-out Procedures continued Refund of Cash Received in Excess of Expenditures Sponsored Projects Close-out Checklist Submission to SPA Management for Review Submission of Reports Close Project and Award in Oracle
Stumbling Blocks Cost Sharing/Matching Final Adjustments (PDA’s, Re-distributions) What SPA needs in order to incorporate said adjustments-(supporting docs., signed PDA’s, Re- distributions) Late modifications/change notices-Vehicles to alleviate-Early Center Request, Request for Award Extension At Risk (RAE)
Cost Sharing/Matching We will need to have met our cost sharing/matching obligation in order to close out the award. Supporting documentation-ideally should be on a 2XXXXXX award linked to the same project as the award In Kind should be supported by letters detailing the amount of the in-Kind (a pledge letter does not suffice) If its written in the text (quantified) it is considered cost sharing the same as if it was expressly put in the budget.
Final Adjustments- Cost Transfers- Things to consider Why is this charge appropriate or inappropriate for this award? Why it was not correctly charged originally? If > 90 days, why is the charge just being corrected now?
> 90 days-What does not constitute an extenuating circumstance The PI was out of town/I couldn’t reach the PI To use up the remaining funds on award 1xxxxxx/to clear overdraft The PI was out of the office or out of the country” – bad reasoning because PI approval could have likely been obtained via email. “When discussing with the PI up-coming expenses and the budget, it was determined that these expenses should go against the other account” – bad reasoning because does not explain the reason the charge is being moved nor explain the extenuating circumstance. “The financial reviewer in our department did not notify me of this error until after 90 days” – not extenuating, this is a clerical error not caught within the 90 day window. “There was a turnover in employees delaying the processing of the error” – again, missed the 90 day window & not extenuating really.
Monthly Meetings-Facilitate Close-out The starting point of close out should begin with monthly meetings-going thru the list of awards that are about to close in the next month or two. Subcontract close out, securing final invoice and final deliverables, the latter being the key to approving the former. Questionable Costs and Justifications SPA cannot ‘approve’ a cost, only the sponsor can SPA can provide guidance as to whether a justification is deemed ‘acceptable’
Monthly Meetings continued Standard disclaimer of ‘acceptable’ justification- ‘As you know, we (SPA) cannot approve expenses to an award. Only the sponsor can actually approve an expense. However, were we closing this award today and this justification was provided for this cost, we would accept (not accept) this justification and not (ask) that the charge be removed. Your office should retain any documentation that supports this purchase as a direct cost to the award so that should an auditor inquire about it, you are able to prove the appropriateness of the charge. ‘ Having said that, if the auditors review the costs and deem them unallowable then the department will be responsible for those disallowed costs.
Importance of Timely Submission It’s a compliance issue of utmost importance; late submissions can lead to potential audit findings; audit findings in sufficient numbers can lead to loss of sponsor funding. Additionally, audit findings can make other entities/schools hesitant to do business with us. Subrecipient monitoring is a significant topic these days.
Facilitating Timely Submission Incorporate pre-term meetings as part of your monthly 1-1’s with your SPA Rep. At these you should be reviewing the awards that are scheduled to close, and ironing out any final items that need to be resolved prior to closing the books (i.e. final sub-K invoices, A/P re-distributions, PDA’s, cost sharing, effort issues, etc.)
Final Thoughts Working together-SPA Reps. and Business Managers can meet the goal of timely close out. Questions?