General Guidance
Timing
Allowable Costs
Resources
All costs charged to sponsored awards must meet the Four Cost Principles and be compliant with all applicable sponsor terms and conditions. Costs must be reasonable, must be incurred during the start and end dates of the period of performance, must otherwise be allowable under the sponsor’s and the University’s policies, and must be consistently treated in like circumstances as either a direct or indirect cost.
Standard Closeout
Per University policy under GIM 39, all costs must be posted to the applicable grant worktag in Workday prior to the Final Action Date.
Please see information from Grant & Contract Accounting regarding processes for standard closeout. (GCA: Closing Your Award)
Termination
Awards which are terminated will have an adjusted end date of the period of performance and new due dates for final invoices, financial reports, and/or request for payment. The length of the closeout can vary across terminations, with some sponsors requiring a very short period for the University to submit a final request for payment. Upon receipt of a notice of termination, units should expedite final review of all expenditures posted to the applicable grant worktag.
If accounting adjustments or late expenditures are required to post, reach out to Grant & Contract Accounting via Award Portal to inform them of the costs which need to post to the applicable grant worktag for inclusion in the final request for payment. Failure to notify GCA of late adjustments or incoming charges may prevent inclusion of the costs in the final request for payment. Cost which are not reimbursed by the sponsor must be covered by non-sponsor funding.
In all cases – whether a standard closeout or a termination – final review of the award and any applicable accounting adjustments must be made in a timely manner to facilitate efficient closeout of the sponsored award. This includes, but is not limited to, ensuring:
- All costs meet the four Cost Principles and are posted to the applicable grant worktag in Workday;
- All cost share commitments are met and documented in Workday;
- All deliverables are completed;
- All applicable reports, both financial and technical, are submitted;
- All subrecipient invoices are approved for final payment.
Costs which are "pending" or have not posted in Workday cannot be included on final reports or requests for payment.
Active award management must occur through the lifecycle of the award and should not be left until the end of the award. Failure to charge costs to an award in Workday in a timely manner risks non-payment by the sponsor which must be covered by non-sponsored funding.
It is never allowable to charge an expenditure allocable to one sponsored award to a different sponsored award due to a surplus of funding or a lack thereof. (See Budgetary Convenience)
Federal Sponsors
The Federal Regulations under 2 CFR 200 and the FAR provide guidance on the allowability of costs due to standard closeout or terminations.
- Suspension or Termination
Under 200.343, the "[c]osts to the recipient or subrecipient resulting from financial obligations incurred by the recipient or subrecipient during a suspension or after the termination of a Federal award are not allowable unless:"
- The federal sponsor specifically authorizes those costs;
- The costs result from obligations which were "properly incurred" prior to the termination date and the cost would otherwise be allowable if not for the suspension or termination.
Costs which are incurred after the date of suspension or termination are high-risk costs which are unallowable unless specifically approved in writing by the federal agency.
Costs which are incurred prior to the date of suspension or termination and charged timely and properly to the award in Workday are allowable.
NSF Awards
Recent termination notices from NSF require the preparation and submission of final closeout reports and reference the closeout cost section of the federal regulations. As such, post-termination date costs which are required to prepare final reports and closeout would be allowable expenses and deemed approved by NSF.
- Closeout Costs [200.472(b)]
Recipients and subrecipients may charge a Federal award during closeout for necessary administrative costs, such as preparing final reports, publication and printing costs (see 200.461(b)(3)), and costs associated with the disposition of equipment and property. The costs may be incurred until the due date of the final report.
Section 200.472 covers the allowability of specific award costs which may arise under termination or standard closeout.
- Cost of items reasonably usable on recipient's other work (e.g. other sponsored or non-sponsored work): Unallowable unless evidence is submitted, that recipient would not retain such items without sustaining a loss.
- Costs which cannot be immediately discontinued after termination date: Allowable if the recipient uses all reasonable efforts to mitigate.
- Loss of value of special tooling, machinery, or equipment: Allowable if -
- Cannot reasonably be used in other work
- Federal government interest is protected by title (government owned property)
- Loss of value to the terminated federal award is limited to the proportionate acquisition cost
- Rental costs under unexpired leases: Allowable if clearly shown to have been reasonably necessary for performance of the award.
- Limitations:
- Amount cannot exceed reasonable use value of the property
- Recipient makes all reasonable efforts to terminate, assign, settle, or reduce cost of the lease
Federal Contracts
Under FAR 52-249.5 (Termination for Convenience of the Government), federal sponsors may terminate an agree solely due to belief that termination is in the government's interest. A notice of termination must be provided specifying the extent and effective date of the termination.
Please read your contract terms and condition for specific guidance on allowable costs and the final request for payment. The final payment request "may include reasonable cancellation charges incurred by the Contractor and any reasonable loss on outstanding commitments for personal services that the Contractor is unable to cancel; provided, that the Contractor exercised reasonable diligence in diverting such commitments to other operations. The contract shall be amended and the Contractor paid the agreed amount." [52-249-5(e)]
Contractors have a right to appeal termination under FAR 52-249.5(h).
Non-Federal Sponsors
Non-federal sponsor closeout requirements can vary greatly from entity to entity; review the Notice of Award and applicable terms and conditions for your specific award to determine the requirement for charging costs related to closeout or termination of an Award.
Federal Regulations
200.340 Termination
200.343 Effects of Suspension and Termination
200.344 Closeout
200.461(b)(3) Publication and printing costs during closeout
200.472 Termination and Standard Closeout Costs
FAR 52.249-5 (Federal contracts)
University Policy and Processes
GIM 39 – Closeout of Sponsored Programs
GCA: Closing Your Award
PAFC: Expenditure Timing