Pre-Award Close Out / Extension Process Crystal Miller Amy Carson October 27 - 2:00-3:30 PM October 29 – 9:00-10:30AM C

1. Pre-Award Close Out / Extension ProcessCrystal MillerAmy CarsonOctober 27 - 2:00-3:30 PMOctober 29 – 9:00-10:30AMCON 1010

2. Purpose To clarify award close out policy, procedures, roles and responsibilities related to Sponsored Projects from the Pre-Award perspective

3. Background

4. Everyone Has a Role • SPAdmin • SPAcct • Principal Investigators • Departmental/Unit Administrator

5. What is the Role of SPAdmin? • Understanding and assisting in interpretation of • Sponsor’s requirements • Effects of these requirements on department/unit • Restrictions/flexibility of SPAcct to meet spoonsor’s terms • University policies and procedures related to close outs

6. What is the Role of SPAdmin? • Negotiating subagreements • Out • Flowdown sponsor agreements • Ensure reports and deliverables are received on time • In • Ensure project is not continuing without a contract in place • Ensure prime monitoring expectations are being met

7. What is the Role of SPAdmin? • Monitoring End dates • Notify PIs and departmental/unit administrators of upcoming award expirations • Clarify departmental needs and sponsor expecations • Extension • Advance Accounts • Close Outs

8. What is the Role of SPAdmin? • Reporting to Board of Regents • Reconciling Revenue reported (Plans) to Revenue Received

9. Myths • Pre-award does not need to know when a grant/contract is closed out • If it’s not federal – begin and end dates don’t matter • No cost extensions are not required in industry sponsored agreements • We do not have to treat clinical trial contracts the same as grants • Advance accounts are not allowable on contracts • Residuals are allowable on non-federal projects • Receiving partial indirects is a justification for keeping greater than 25% residuals

10. General

11. Myth 1 • Pre-award does not need to know when a grant/contract is closed out • BOR reporting • Sponsor reporting • Terms/Conditions • Advance accounts

12. Extensions

13. Myth 2 • If it’s not federal – begin and end dates don’t matter • Consistency • Liability • Indemnification

14. Myth 3 • No cost extensions are not required in industry sponsored agreements • Consistency • Contract specific

15. Myth 4 • We do not have to treat clinical trial contracts the same as grants • Maybe – maybe not

16. Extension Memos • Use one of the following • PI must sign • Provide information in red

17. Extension:No Sponsor ApprovalRequired

18. Extension:Sponsor ApprovalRequired

19. Advance Accounts

20. Myth 5 • Advance accounts are not allowable on contracts • IRB fees • No IRB/IACUC/IBC approvals required • Work separate from approvals being conducted

21. Advance Accounts Background • Assigned to a sponsored project before the award or extension process is completed • Most common with subcontracts • Approval includes authorization to incur costs outside of the official project start and end dates • Are zero balance accounts • Incur expenses • No budget or revenue • 35 & 36 WBS advance accounts will become account number • 34 accounts will be assign as 37 WBS advance accounts

22. Advance Accounts Advance accounts might be appropriate if: • The project start date occurs before the award process has been completed • A contract extension is in negotiation and has yet to b signed by all parties • Extension of awards or subcontracts are delayed pending finalization by the sponsor or the federal government • Sponsor grants pre-spend authority

23. Advance Account Form

24. Close Outs

25. Revenue and Expense Summary Report from SAP – example…

26. Myth 6 • Residuals are allowable on non-federal projects • Depends • Terms/Conditions • Cost reimbursement vs. Fixed Price • Guidelines • Contracts

27. Myth 7 • Receiving partial indirects is a justification for keeping greater than 25% residuals • Consistency • Anti-Kickback • Pre-award consideration – not at close-out

29. Important Aspects of Revenue and Expense Summary for SPAdmin Revenue Expenses Plan Total Expense Life to Date Revenue (over)/under expense Variance

30. Revenue • Plan is information that is reported to Board of Regents (BOR) • $100 million = Revenue not Plan • Big disconnects: • Clinical Trial agreements • number of patients recruited • Adjustments need to be made, when Plan does not match Life to Date – to reflect actual funds received = Amount of Award Checklists set up in SPAdmin Database Plan = Revenue Reported to BOR Life to Date = Actual Funds Received = +/- the difference between Plan and Life to Date Variance = the dollar figure that must be on the internal budget sent to SPAdmin for close out *Note: Close outs should not be requested until all revenue is received from the Sponsor

31. Revenue Formulas • Example: • 77,433/1.26 = 61,454.76 (Direct Costs) • 77,433 – 61,454.76 = 15,978.24 (F&A Costs) * F&A rate Variance / 1.26* = Direct Costs Variance Direct Costs = F&A Costs

32. Close Out Budget Fields

33. Completed Close Out Budget Using the Example Provided in this Process Illustration

34. Close Out Memos • Use one of the following • PI must sign • Provide information in red

35. No Adjustments = 0 (No budget Needed) = (No Residual Funds) = 0 (No Residual Funds) Variance Life to Date Total Expense Revenue (over)/under expense

36. Close Out: No Adjustments

37. Adjustment/No Residuals > 0 (Budget Needed - ± for amount) = (No Residual Funds) = 0 (No Residual Funds) Variance Total Expense Life to Date Revenue (over)/under expense

38. Close Out: Adjustment with no Residuals

39. Adjustment/Residuals <25% Variance • > 0 (Budget Needed - ± for amount) • ≠ (Residual Funds) • ≠ 0 (Residual Funds) • × 25% = 25% threshold • < 25% threshold Total Expense Life to Date Revenue (over)/under expense Life to Date Revenue (over)/under expense

40. Close Out: Adjustment with Residuals less than 25%

41. Adjustment/Residuals >25% • > 0 (Budget Needed - ± for amount) • ≠ (Residual Funds) • ≠ 0 (Residual Funds) • × 25% = 25% threshold • > 25% threshold • Provide justification Variance Total Expense Life to Date Revenue (over)/under expense Life to Date Revenue (over)/under expense

42. Close Out: Adjustment with Residuals Greater than 25%

43. Residuals

44. Residual Justification? • Anti-Kickback Act of 1986 - Compliance • If there is significant residual fund balance, i.e., an amount greater than or equal to 25 percent of the contract/grant price, at the completion of work for the contract/grant, the Principal Investigator must provide a written explanation for the substantial discrepancy between the cost to perform the contract/grant and the contract/grant price. • This explanation should be supplied by the Principal Investigator to Sponsored Programs Administration, which will use it along with the information that the Principal Investigator is required to provide upon closeout of the agreement as the basis for an audit of the project.

45. University Residual Policy Comparisons

46. Return Residuals to Sponsor • > 0 (Budget Needed - ± for amount) • ≠ (Residual Funds) • ≠ 0 (Residual Funds) Variance Total Expense Life to Date Revenue (over)/under expense

47. Close Out: Return Residuals To the Sponsor

48. Practice What We’ve Learned Activity