For Encumbrances Near To and After Termination Date
Items not invoiced for and received during the award period of performance are considered unallowable by an auditor although the PI may considered it to be beneficial to the project and it is a reasonable expense at the time the order was placed. To avoid audit finding of this nature, orders for items need for the project should be placed well in advance (60-90 days) of the project expiration date to ensure invoicing and delivery prior to that expiration date.
Period of performance means the time during which the department may incur new obligations to carry out the work authorized under the award. It is the period between the start and end dates or expiration date of the award. Departments are given an adjustment period of 30 days after the end date of the award to process all payments for outstanding expenses and to clear payroll and Purchase Order (PO) encumbrances. The DBA is responsible for clearing the Sub-recipient PO encumbrances on the award.
Recommended Encumbrances release clean up at project expiration:
Run the 1074 and take the following steps:
- Soft Commitments (UGLS1074.5) - Delete all transactions in soft commitment that will not be processed.
- Open Commitments (UGLS1074.4)
- Release any PO encumbrances that will not be used.
- Run the BOB report and move position funded on the expired cost center to another cost center or to suspense if the position is vacant.
- Contact ORSP to Release any IDC encumbrance.
To ensure timely and accurate award closeout, the University must liquidate all obligations incurred under the Federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award (Uniform Guidance 200.343 - Closeout).
The closeout of the award does not affect the right of the sponsor to disallow cost and recover funds on the basis of a later audit and the University's ability to continue internal review and correction of the cost center to remove overages or unallowable costs not invoiced or allowed by the sponsor. (Uniform Guidance 200.344 - Post-Closeout Adjustments).
At closeout, the department will have a period of time (usually 30 days) following the award expiration date to finalize all expenditures, release all encumbrances and resolve all outstanding budget and compliance issues on the award. The Office of Research and Sponsored Programs (ORSP) will submit all invoices and final reports in accordance to agency guidelines.
After all final financial reports are submitted to the sponsor, ORSP will begin the process of inactivating the cost center in the financial system by first clearing all encumbrances and zeroing out the budget, liabilities and equity. All payments should be received from the sponsor within 180 days after project termination.
Ø 90 days prior to the expiration date of the award, the department and principal investigator (PI) will receive closeout notifications. The notification will include instructions for closeout.
Ø 30 days after expiration, all expenses should be posted to the cost center with the exception of sub-recipient final invoices. On federal awards, the sub-recipients are given 45-60 days after the expiration date to submit final invoices.
Ø 60 days after expiration ORSP will begin its review process in order to generate the final invoice or financial report for the award. During this time the award budget will be reduced to the expenditure amount and ORSP will remove any unallowable cost posted to the grant to the Departmental IDC cost center.
Ø 90 -120 days after award expiration days (some agencies allow less days), all final reports and invoices are due on or prior to the 90 days. Financial reports, property reports, and patent reports are prepared and submitted to the sponsor by ORSP.
Ø Final technical reports must be submitted by the PI and a copy sent to ORSP.
Ø Late invoices and drawdowns that are outside the period of availability may not be honored.
Ø 30 days after the final invoices are submitted, payments are expected from sponsors. Both LOC payments and invoice payments are booked to project cost centers by ORSP Post Award.
Ø After close out with the sponsor (usually 90 days after expiration), the university will continue its process to inactivate the project cost center.
- Underspending of the payment amount on cost reimbursable awards: The award budget will be reduced to the expenditure amount, a revision to the final invoice will be made if needed and the funds will be returned to the sponsor.
- Underspending of payment amount on fixed priced award: When allowed by the sponsor terms and conditions, overages on fixed price awards may be moved to PI residual cost centers (contact ORSP for Residual Guidelines).