Blog
August 3, 2023
The closeout process is an integral part of the sponsored award lifecycle—Institutions and organizations carry obligations to sponsors and funding agencies to close sponsored projects in a timely manner.
Closeouts are closely monitored as part of OMB Uniform Guidance (2 CFR §200), and without effective practices in place, closeouts can fall behind and start piling up, creating future issues with the organization and sponsored awards.
Why Should Awards Be Closed in a Timely Manner?
The closeout process is a collaborative effort between multiple parties that work together to ensure sponsor obligations are met, project work is completed, required reports are filed, and financials are accurate and complete. Failure to efficiently close sponsored awards may put the organization at risk, affecting future funding opportunities for the organization. Sponsors may take corrective actions, suspend or terminate current awards, or withhold future awards to the organization if obligations are not completed within the sponsor’s timeframe.
Closeout requirements differ between sponsors, making it difficult for an organization to initiate “blanket” procedures to ensure an award is properly closed. When you notice the number of closeouts piling up, consider seeking expert support to get your organization back on track.
At Attain Partners, we understand the headache of an overwhelming number of expired awards—and we want to help get your organization back on track. Our Interim Staffing services can help place talent into your institution to assist with award closeouts, allowing your team to continue to focus on day-to-day operations while we tackle the backlog. We’ve helped countless organizations and have compiled a list of seven key components to ensure a smooth closeout.
Seven Key Components for Smooth Closeouts
1. On-Time Reporting
The sponsor agreement provides timelines for required reports during the performance period. Sponsors may require final invoices, PI technical reports, invention/patent certifications, financial reports, and other reporting documentation to close an award. Submitting reports and sponsor-required closeout documents on time will prevent sponsors from withholding final payments to the award, delaying payments on other institutional awards, and inhibiting new funding to be potentially awarded to the institution.
2. Financial Reimbursement
Nonpayment of externally sponsored projects can seriously impact an organization’s resources. Invoices for sponsored programs may be unpaid for reasons including sponsor complications (bankruptcy), execution issues (deliverables not met, reports not filed on time), or internal administration problems such as invoicing. When sponsored work is completed but not reimbursed, costs must be covered by the institution using non-sponsored funding or indirect costs. Nonpayment of sponsored programs is a considerable financial risk to academic units and may affect an organization’s funding status.
3. Financial Compliance
Implementing a detailed closeout process can safeguard organizations in financial accuracy and relativity of expenses. Regularly reviewing award expenditures ensures costs are allowable, allocable, reasonable, and consistent within the terms of the sponsor contract/agreement to maintain compliance and avoid auditing headaches. Reconciling expenditures frequently can streamline the closing of a project by avoiding trailing expenses that post after an award ends and preventing cost transfers while finalizing expenses charged to the award, sub-awards, and cost share accounts.
4. Account Balance Resolution
Once expenditures on a sponsored program are finalized organizations need to close the final account balance. Grantees are also required to refund unobligated cash balances during the closeout process if the organization is not authorized to retain the funds for use in other projects. If a sponsored program account is overspent, the organization must clear the deficit by using non-sponsored funds.
5. Cost Share Requirements
Many sponsors will have cost share/match requirements listed in the Request For Proposals (RFP) and award documents. A sponsor may reduce expenditure reimbursement amounts if proper cost share requirements are not met. If an award is overspent, excess costs may be moved to a cost share account funded by non-sponsored funding to properly record the project expenditures. Timely closeouts ensure cost share requirements are met and the organization’s obligations are fulfilled.
6. Subrecipient Monitoring
Subrecipients often play a critical role in the sponsored project’s objectives. If a sub-recipient is behind on deliverables or final reports this can also delay the final report filing to the prime sponsor. Delayed reports and invoices from sub-awards may also affect payments to the subrecipient and encumbrances, making it difficult for the prime award to finalize expenses and submit final invoices to the sponsor for reimbursement.
7. Effort Reporting
If a sponsored award requires additional time past the end date to complete deliverables, a no-cost extension may be requested. However, if a no-cost extension is denied and the PI requires additional time past the end date to wrap up the project, the PI’s effort may not be recorded properly, and the institution is required to cover the costs associated with the extra work.
Attain Partners – Sponsored Programs Experts
Are you overwhelmed with your institution’s closeout process? Too many closeouts, too little time? Contact the sponsored program experts at Attain Partners to discuss how we can update and strengthen your closeout procedures, provide interim staffing, and boost your closeout process to peak performance.
Attain Partners has worked with institutions to successfully improve business and sponsored program management, including closeout procedures. Drawing on our deep and talented pool of subject matter experts, Attain Partners helps place interim talent into your institution to ensure operations continue to run smoothly and that you receive optimal funding. We can help you fill workforce gaps with functional and technical experts who understand research administration, financial aid, and Federal compliance.
About the Author
Nicole Hansen is a Senior Associate at Attain Partners with experience in higher education research administration and public administration. She specializes in post-award financial management, fiscal reconciliation, and problem-solving. Prior to joining Attain Partners, Nicole was employed by Utah State University as a Business Manager for Statewide Campuses where she focused on fiscal reconciliation, budget development, and training business services.
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