Closing the Account

Overview

Preparing for closeout begins upon receipt of an award. The notice of award, the accompanying terms and conditions, and the award summary checklist must be reviewed to ensure accuracy and future compliance. Charges should be reviewed regularly to ensure that all expenses are appropriate and allowable. Any necessary adjustments discovered must be made within 90 days of month-end in which the expense was incurred.

At least three months prior to termination of the award, attention must be devoted to a full review of the award and preparation for closeout. The review should be undertaken with the collaborative effort of the PI and designated senior research accountant.

All categories of direct cost (salaries, equipment, supplies, tuition, etc.) must be reviewed for completeness, accuracy, and allowability before the close of the award. All necessary adjusting journal entries and/or payroll reallocations should be made during the course of the project period and before the close of the project period.

Using the Balance and Activity Report for Closeout

The Balance and Activity Report (BAR) is available to assist during the final reconciliation of grant or contract funds. The report contains a summary of budget, expenditure, and revenue activity compiled over the life of the account. The PI should verify the accuracy and allowability of the expenses posted to the account. The BAR has been designed to provide a summary of activity and assist in the closeout process. Features include accounting of expenses for the current budget period and for the total project. The expenses on the BAR are sorted by object code classification, with a description of the cost item. Cost categories such as salary, current expense, and expense credit are subtotaled. Other data elements of the BAR include operating budgets, total expenses, encumbrances, budget balances, total revenues, total cash received, receivable balances, and overdrafts.

OSP Account Review and Closeout

The award and all related documents will be subject to a summary desk audit by OSP to determine the propriety and allowability of the expenses charged. Should questions regarding a particular cost arise, OSP will review all available documentation to ensure that an approval or exception has been granted. If the authorizing documentation is not readily available, OSP will contact the PI for an explanation and documentation. In the absence of proper documentation, the charge will be deemed unallowable and must be moved to an unrestricted account. Only after the final financial report is submitted, all funds due the university have been received, no encumbrances remain, and OSP has completed the closeout process will the account be closed and disabled.

Deficit and Residual Balances

Deficit Balances

Deficit balances occur when UNLV does not receive sufficient payment to cover the costs allocated to a project, and they may occur for several reasons. While OSP has instituted policies and procedures to reduce and mitigate the risk of full or partial nonpayment, there is no way to totally remove the risk. PIs should be aware that any deficits will be covered by their individual F&A account or a college/department account if insufficient funding is available in the PI’s account.

In the event collection attempts are unsuccessful, OSP will notify the PI of the overrun and request an unrestricted department or college account number to cover the costs. The dean and chair/director will also be notified so they are aware of the situation. If the PI does not respond with an account number within 30 days, OSP will transfer the overrun to the PI’s F&A account (if any) or the department/college facilities and administrative cost accounts if the individual PI’s account is not sufficient to cover the overrun. OSP will communicate with the dean/chair/center director before any transfer occurs if it impacts any account other than the PI’s individual account.

If ongoing collection attempts are successful, the debited PI, college, or department cost account will be credited.

Residual Balances

When a project is fully funded by advance payments and the available funds are not fully expended, a cash balance may exist at the end of the project. If total payments exceed the amount of total reimbursement claimed, OSP will determine from the terms of the award the proper disposition of the remaining cash. If the award is fixed price, the residual balance will be retained by UNLV. If the award does not provide adequate instruction, a notification will be sent to the sponsor along with the final report requesting information regarding the disposition of the unexpended cash balance. If after a reasonable period of time the sponsor does not reply, it will be assumed that the funds may be retained by the university. In the event that the sponsor subsequently requests the residual amount, the school is obligated to provide funding.

If the unexpended cash balance is to be returned to the sponsor, OSP will initiate the return of the balance. If the award terms or sponsor authorizes the university to retain the residual balance, the balance will be treated in accordance with the OSP Fixed Price Policy.