Freeze Grant Accounts Overview

1. Freeze Grant Accounts Overview University of Pennsylvania Office of Research Services October 7, 1999

2. Project Goals • Provide a tool that allows school and department grants managers and Research Services to limit activity against grant accounts. • During the life of the project • During the Closeout (adjustment period)

3. Objectives • Significantly reduce the manual effort and re-work involved in the continuous monitoring of grants both during and after the Adjustment Period, allowing the redirection of effort to more productive grants management activities. • Improve the accuracy and timeliness of final reports by stabilizing the grant after the Project Period End. • Provide more effective control of grant activity to ensure that activity after the end date is more likely to be allocable to the grant. This should reduce cost transfers, as well as involuntary cost sharing for transactions which may not be truly allocable to the grant.

4. General Features • Grants are frozen/unfrozen at the FUND level; the freeze/unfreeze action affects all COA combinations of the FUND. • Freezing a grant has no effect on the ability to query or report on a grant account, but only on the ability to complete transactions against it. • The freeze status of the FUND is available on standard FinMIS reports for grant accounts and new 138.ORG Frozen Fund List Report.

5. Activity Subject to Freeze • Grants can be frozen/unfrozen to prevent activity from any one or more of the following TRANSACTION SOURCES: • Online Journal Entry/Encumbrance Entry • New Purchase Orders • C-Forms • Feeder Journals • Payroll/Salary Management Journals

6. Activity Exempt from Freeze • The following FinMIS activity is exempt from the freeze: • Online activity initiated by Research Services • System generated activity such as mass allocations, grant overhead (F&A) and revenue recognition • Invoice transactions from Accounts Payable related to existing Purchase Orders • Transactions from Purchasing relating to existing encumbrances (e.g., cancel an existing PO) • Budget Entries • Transactions “in progress” before freeze action

7. Implementation Schedule • October 18, 1999 • Freeze Grant Responsibility becomes available • November 1, 1999 • Automatic Freezing of accounts begins for grants that end October 31, 1999 • Automatic Freeze continues daily on a rolling basis for grants ending November 1, 1999 and thereafter. • February 1, 2000 - Grants ending 7/1/99 to 10/30/99 are frozen • April 1, 2000 - Grants ending 7/1/98 to 6/30/99 are frozen • June 30, 2000 - Grants ending prior to 7/1/98 are frozen

8. New FinMIS Reports • 138.ORG: Frozen Fund List Report • Designed to provide information about the Freeze Status of individual grants funds. • Provides a list of those funds that are currently enabled and that have at least one frozen transaction source. • Provides basic identifying information for the fund and then lists, by transaction source, the freeze status and status date. • Information provided is current as of the execution time of the report. • Data is first sorted by RESP ORG and then by FUND number.

9. New FinMIS Reports • 139.ORG: Funds to be Frozen Report • Designed to assist in review of older grants to be frozen on specific implementation target dates (2/1/2000, 4/1/2000 & 6/30/2000). • Provides financial information to identify those grants that may require additional entries prior to freeze and closeout. (PBUD, PBIL, PJTD Budget, Grant Revenue, Total Expense, Total Encumbrance, Total FSR, 1220 Balance, Equipment Balance, Project End Date) • Grant funds are selected based on RESP ORG. • Financial information is provided as of the current open accounting period (when the report is executed). • Data is first sorted by RESP ORG and then by FUND number.

10. Grant Life Cycle • Project Period • The period from the start date of the grant, up to and including the Project End Date. • Adjustment Period • A period of up to 60 days beginning immediately after the Project End Date, during which grant activity is reviewed and final adjustments are made prior to financial reporting. • Reporting Period • The period immediately following the Adjustment Period, during which Research Services issues the financial report and makes final closing entries.

11. Adjustment Period • Typically defined as the period between the Project End Date (PJED) and 30 days prior to the final report due date. • The FUND attribute Submit Final Report indicates the number of days (30, 60 or 90) following PJED that the final report is due. • For grants with the final report due 90 days after PJED, the Adjustment Period would be 60 days.

12. Adjustment Period • For the Freeze Grant function, the adjustment period has been redefined in order to: • Handle those projects that would otherwise have no adjustment period because... • There is no final report requirement • The final report is due 30 days after PJED • Ensure that, whenever possible, the end of the Adjustment Period coincides with the end of a FinMIS Accounting Period.

13. Adjustment Period Calculation • When Submit Final Report = 30 days • The Adjustment Period ends 15 days after the Project End Date. • The Reporting Period allows 15 days for Research Services to review and prepare the final report.

14. Adjustment Period Calculation • When Submit Final Report = 60 days • If the Project End Date is within the first nine days of a month, then the Adjustment Period End is the end of the same accounting period. • If the Project End Date falls after the first nine days of a month, then the Adjustment Period End is the end of the next accounting period.

15. Adjustment Period Calculation • When Submit Final Report = 90 days • If the Project End Date is within the first nine days of a month, then the Adjustment Period End is the end of the next accounting period. • If the Project End Date falls after the first nine days of a month, then the Adjustment Period End is the end of the accounting period following the next account period.

16. Who can Freeze and Unfreeze • During the Project Period • Authorized users with access to the RESP ORG of the FUND can freeze or unfreeze any transaction source except Payroll. • Payroll will automatically be frozen by the system at the end of the Adjustment Period.

17. Who can Freeze and Unfreeze • During the Adjustment PeriodAuthorized users with access to the RESP ORG of the FUND can freeze or unfreeze any transaction source except New Purchase Orders and Payroll. • The system will automatically freeze for New POs immediately after the Project Period End Date. • This transaction source can only be unfrozen by first extending the Project Period of the research. • Extensions of Project Period must be handled according to current University and sponsor guidelines, typically before the Project Period end. • Payroll will automatically be frozen by the system at the end of the Adjustment Period.

18. Who can Freeze and Unfreeze • After the Adjustment Period • At the end of the Adjustment Period, the system will automatically freeze all transaction sources that are not already frozen. • Authorized end users can no longer modify the freeze status. • Only Research Services can Unfreeze/Freeze. • After Unfreezing a particular transaction source, Research Services can specify a re-freeze date and the system will automatically refreeze that source for that grant on the specified date.

19. Function Override Feature • Designed to support the early closeout of accounts • for grants terminated earlier than the original planned Project End Date • for accounts where all adjustments and reviews have been made prior to the Adjustment Period End • Allows Research Services to take control of the freeze/unfreeze function before the end of the Adjustment Period.

20. Function Override Feature • When the Function Override Indicator is turned ON... • only Research Services can perform the freeze/unfreeze function. • authorized end users can no longer update the freeze status. • the system will automatically freeze all transaction sources that are not already frozen. • Any authorized user can turn the Function Override Indicator ON, but only Research Services can turn it OFF.

21. Unfreeze Requests to ORS • The ability to Unfreeze grants after the end of the Adjustment Period is limited to the Office of Research Services (ORS). • Accounts will be unfrozen only under exceptional circumstances. • Requests to unfreeze accounts past the adjustment period end should be made via email to ORS at: unfreeze@pobox.upenn.edu • Requests will be forwarded to relevant personnel for evaluation and handling. • ORS will communicate status of request within 2 business days.

22. Unfreeze Requests • Each unfreeze request should specify: • Individual transactions necessary • Particular Transaction Sources to be Unfrozen • Anticipated time frame for unfreeze • Reason for delay in adjusting the account • Requests for unfreeze action must be consistent with University & sponsor policies for: • Allowability • Allocability • Reasonableness • Documentation should accompany all requests

23. Reporting Period Assumptions • After the end of the Adjustment Period, Research Services will proceed under the working assumption that a grant account is ready to be reported to the sponsor. • If a department considers the account not to be in condition to be reported they should… • notify Research Services of the reasons the account is not in order, before the adjustment period end. • submit an action plan with required time frames to rectify the situation.

24. Implications • Online Activity Freeze (Journal Entries, Purchase Orders, C-Forms) • The Freeze will prevent transactions from being created. • User will receive an error message indicating that the FUND is frozen. • Accounts Payable will return C-Forms to the originating department with a “frozen fund” explanatory message.

25. Implications • Feeder Transaction Freeze • The Freeze will divert transactions to the department’s suspense account. • Suspense transactions caused by frozen FUND will post with OBJECT CODE 9599 for all feeders except Payroll. • It remains the department’s responsibility to notify feeders of account changes and expirations.

26. Implications • Payroll Transaction Freeze • The Freeze will not prevent individuals from being paid. • All Payroll activity will be affected for that FUND. You will be unable to… • Enter a new distribution using the frozen FUND • Pay from existing distributions using the frozen FUND • Reallocate to or from the frozen FUND

27. Implications • Payroll Transaction Freeze • The Freeze will divert the transactions to the department’s suspense account. • Suspense transactions for frozen funds will continue to use Object Code 9501 • If the Contract End Date has not yet passed, the Salary Management System will also create Salary and Benefits Encumbrances in the Department’s suspense account.

28. Summary • Freeze Grants is a tool for more effective grants management. • Freeze Grants will not prevent over-expenditure of grant accounts. • There is no substitute for grant account management throughout the life of an award. • Communication and cooperative effort is key to the successful use of Freeze/Unfreeze functionality in grants management.