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, ORSP 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.
- 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 Overruns
- Review Financial Reports
- Suspend Account Use
- Transfer Balances
- Document Patent
- Technology Transfer
- Intellectual Property Information
Materials and Equipment
- Review Equipment Inventory
- Dispose of University Equipment and Materials
- Submit Inventory and Equipment Reports
- Transfer Personnel
- Prepare Technical Report
- Prepare Patent Report
Collect purchasing cards
Close related contracts
Terminate Material Transfer Agreements:
- 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.
Verify project status
- Contact ORSP and the sponsor to confirm end date.
Important: Any costs deemed uncollectible must be removed from the sponsored fund and moved to a departmental nonsponsored fund. Departments are responsible for removing charges that cannot be reimbursed or paid by the sponsor.
Review Delegation of Authority
Look at delegation of authority in file to see who needs to be told to stop spending.
Close open encumbrances
- 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.
- 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: telephone charges.
Close standing orders
Make sure that all units that have an account number on file for charging remove that number, e.g., bookstore, libraries.
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.
The PI is responsible for initiating removal of overexpenditures. They must be removed before the final reports are submitted.
Review financial reports
ORSP 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)
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 fund (if the project and deliverables have not been completed, the PI must request a no-cost extension).
The PI is responsible for disclosing any patent and intellectual property developments to the Office for Technology Transfer and completing the patent report to the sponsor.
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 the Manager of Cost Analysis. Items are screened to determine their condition and possible reutilization.
Transfer or sale of University equipment or materials outside the University can only be completed with the prior approval of the Manager of Cost Analysis.
Submit Inventory and Equipment Reports
The Manager of Cost Analysis prepares and submits inventory and equipment reports.
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.
Prepare Patent Reports
PIs complete and submit patent reports. These must be completed even if no patents or intellectual property were gained from the project.
Under the legal terms of awards to the University, auditors have the right of access to all official University records associated with a project. The University is obligated to make such records readily available for examination.
Because auditors may visit departments to review supporting documentation and interview personnel who have certified effort on projects, departments must maintain complete records. In addition, individuals who have signed Effort Certification Statements must be able to confirm that the effort as certified was accurate at the time it was signed.
PI must retain:
- Scientific Records and Data
- Animal and Human Subjects Materials
The department must retain:
- Financial and Personnel Records
ORSP will retain:
- Pending proposals for two years after the fiscal year in which they were submitted.
- Awarded proposals and award files for three years after project closeout.
What things are usually audited?
- Cost transfers: to an auditor, a cost transfer means that something happened that should not have occurred. They will look at the transfer documents to see if they are appropriate and timely.
- Payroll charges and effort certifications.
- General purpose equipment purchased at the end of the project: auditors question whether the equipment was needed or just purchased to use up funds. They will select a number of equipment items purchased on the project, review the transaction date in comparison with the grant end date, and discuss with the PIs all those purchases within 60 days of the end date.
Types of audits:
- An audit that is part of the annual general financial audit of University financial statements.
- A sponsored-project specific audit of financial systems and expenditures in accordance with OMB Circular A-133. The University is required to provide these audits to the federal government.
- The sponsor can request that an individual award be audited. These audits can be financial or programmatic.
- All University funds are subject to inspection and audit by the University's Department of Audits.
Auditors usually review these records:
- Central Records from Offices such as ORSP, Purchasing, and Payroll
- Departmental Files
- Laboratory Records
The sponsor or auditors should contact ORSP before beginning an audit. ORSP will then notify the department. If the PI or department is contacted by the auditor directly, refer them to ORSP before scheduling any visits or releasing any documents.
Financial liability for audit disallowances, other than for those which result from deficiencies in the University's policies and procedures, rests with the department, school or center having primary responsibility for the project on which costs are questioned.