Managing Sponsored Projects
UM SPA, May 2008
Chapter 9: Project end
Section 9.2: Project Closure
These final steps in closing an account are extremely important for complete recovery of costs. Unless a request for an extension of time has been made to the sponsor, SPA assumes that the termination date marks the close of project activity. The checklist below outlines the items that must be addressed when closing a sponsored project (not all steps will apply to all projects). Details for each item follow the checklist.
Note: * indicates tasks specific to fixed-price agreements
- collect purchasing cards
- close related contracts
- verify project status
- review delegation of authority,
- close open encumbrances,
- close recurring charges,
- close standing orders,
- reconcile account,
- resolve overdrafts,
- review financial reports,
- suspend account use,
- transfer balances*
- close or purge account
Materials and Equipment
- document patent,
technology transfer, and intellectual property information.
- review equipment inventory
- dispose of University equipment and materials,
- submit inventory and equipment reports
- close payroll encumbrances
- transfer accrued vacation time
- transfer personnel
Collect purchasing cards
- Close related contracts
- Terminate Material
- Review the agreement for specific information. If required in the Material Transfer Agreement, send a report to the material
provider on the results of the project and return or dispose of the material as
directed by the provider.
- make sure all invoices have been submitted.
- Collect purchasing cards
- Verify project status
Contact SPA, SFR, and the sponsor to verify that the project is indeed closing.
Confirm end date.
Important: According to the policy on Removing Uncollectible Costs Charged to Sponsored Projects, any costs deemed uncollectible must be removed from the sponsored account and moved to a departmental nonsponsored account. For costs not moved by departments, SFR will move the costs to "default" nonsponsored accounts which have been set up within each CUFS area. Departments are responsible for removing charges that cannot be reimbursed or paid by the sponsor.
Review Delegation of AuthorityClose open encumbrances
Look at delegation of authority in file to see who needs to be told to stop spending. These individuals must be notified in writing and include an effective date on which they cannot use the account any longer.
- Supply funds encumbered as of the closing date can normally be held open until
invoices are received.
- Encumbrances related solely to the preparation of a final report, e.g.,
printing and duplicating costs, can normally be held open.
- Other encumbrances, i.e., for equipment, cannot normally be held open.
- Make sure last payment is marked 'final.'
Close recurring charges
Recurring charges are charges that continue to hit on an ongoing basis without continued paperwork being processed. Example: gas cylinder refills, telephone, human subject advance payments.
Close standing orders
Make sure that all units that have an account number on file for charging remove that number, e.g., bookstore, Biomedical Graphics, computer facilities, libraries, Vet Med Diagnostic.
Departments should start reviewing their accounts for charges processed against
the project long before it ends. By the time the project ends, it could
be too late for timely posting of expenses to the account. Some sponsors
will not accept invoices that are a single day late. No matter how big
the invoice is, they will not pay.
Review Delegation of Authority
- Resolve overdrafts
- As they are preparing the final financial reports, SFR will alert the
unit administrator if overdrafts exist on the account.
- The PI is responsibile for initiating removal of overexpenditures.
They must be removed before the final reports are submitted.
- Review financial reports
- SFR prepares and submits a final financial report. Since some sponsors
require final financial reports within 90 days, all project charges should
appear on the University accounting system by the termination date.
- Suspend account use
- Verify that each person who has been delegated authority to spend on
the account stops spending.
- Transfer balances (for fixed-price accounts)
- Common problem: Money is left in the sponsored account. If work
is done, close out the account so it will not be liable for later charges.
- F&A is taken on the unspent portion of the award.
- When the end date on a fixed-price project has arrived, and the project
and deliverables are completed, the PI requests the remaining direct cost
balance be transferred to a nonsponsored account (if the project and deliverables
have not been completed, the PI must request a no-cost extension). To initiate
the process, the PI writes a letter or e-mail including the following information:
- A statement that the project is complete.
- A statement that all deliverable and contract requirements have been
- A statement that the sponsor is satisfied and that all revenue has
- A nonsponsored account number to which the balance should be transferred.
The nonsponsored account must have an 1198 fund number and must carry
a function code of the activity for which the balance will be used.
The function does not have to be the same as for the original award.
- If the balance to be transferred is
"significant," the PI must complete a closeout request form and obtain the department head's signature. A "significant balance" is 25% for total payments received of $25,000 or more, or, for payments received of under $25,000, a balance of $2500 or greater.
- If the request is made by e-mail, the department head/designee must write
a statement indicating approval. This documentation is required to assist
the University in preserving the classification of these activities as "non-profit."
- The PI must forward this letter to the SPA grant administrator. The grant
administrator will confirm that the contract end date has passed, the award
was indeed fixed-price, and the University has been fully paid for work
- Note: F&A Waivers:
On occasion, the Vice president for Research negotiates a reduction from
the published Facilities and Administrative (F&A or indirect cost) rate
in order to make a project proposal more competitive for funding. If
such a reduction is negotiated and a balance remains in the fixed-price
account, the F&A account will be reimbursed before the balance is released
to the department. For example, if a waiver has been obtained to charge
a research project a 25 percent F&A/indirect cost rate instead of the
published 47 percent rate and there is a balance, the entire project will
be charged the 4 percent rate. If the balance is insufficient to recover
the full 47 percent, then the full balance is reclaimed, and nothing is
returned to the department.
- Deans and department heads can use a financial report
(http://financial.reports.umn.edu) to see if there is a pattern by principal
investigators or departments of over- or underestimating the cost or effort
needed to complete a project. The report provides the current balances of
an account where the price was fixed for the outcome proposed and the end
date has been reached.
Close or Purge Account
Departments do not delete sponsored orgs. SFR performs this function. After
SFR determines that all revenue has been received and expenses incurred, they
will mark the account for 'purge'. FSS purges
the account from the system in the fall of each year.
If department staff receive a budget worksheet during budget prep that lists
sponsored accounts that they believe were already deleted, they should not
do anything. The account will be closed out by SFR. If there are transactions
between July 1st and the purge date, the account will not be purged until
the following year.
The PI is responsible for disclosing any patent and intellectual property
developments to the Office for Technology Commercialization. OTC will then report inventions
to the sponsors.
Inventions policy outlines responsibilities for invention reporting.
MATERIALS AND EQUIPMENT
Review Equipment Inventory
Make sure all equipment assigned to the project is where it belongs.
Dispose of University Equipment and Materials
To dispose of equipment or materials, contact Inventory Services. Items
are screened to determine their condition and possible reutilization. Unusable,
or junk, items will be carried to the warehouse or sent to the University
scrapyards. Functional items of value will be taken to the inventory warehouse
for eventual use within the University.
Transfer or sale of University equipment or materials outside the University
can only be completed with the prior approval of Inventory Services and the
Office of the Vice President for Finance and Operations, as well as the head
of the department or college. Requests are made on a BA1393 form.
Submit Inventory and Equipment Reports
Inventory Services prepares and submits inventory and equipment reports.
- Close payroll encumbrances.
- Transfer Accrued Vacation
- Transfer Personnel
- Transfer to next project by processing redistribution documents.
Prepare Technical Report
PIs complete and submit technical reports. The sponsor usually indicates
the format and deadline for these reports.
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