Fixed Price and Fixed Fee Contract - Closeouts

This procedure applies to all fixed price and fixed fee contracts, including clinical trials. Before any project will be closed out, the principal investigator (PI) must complete and submit deliverables.

1. On a routine basis, Sponsored Financial Reporting (SFR) runs reports that identify fixed price and fixed fee contracts that have reached their end date. The report also provides information on the project's account balance.

   End date report information:
   SFR will ask the PI to close the project (if there are no outstanding invoices) or ask the PI if he/she wants SPA to request a time extension from the sponsor if research is still ongoing or all deliverables have not been met. If the PI fails to take action within 120 days of project end date (as stated in the contract), SFR may ask the department head to address the issue.

   Final project balance:
   Note: If the project has received a reduction or waiver from the published F&A rate, SFR will charge the full F&A costs to the project before any final balance is determined. As an example, a project should have received $20,600 in F&A at the 26% rate but received a reduction to 10% and therefore received $10,000. Before the final balance is determined, an additional $10,600 will be taken out of any residual.

   If the final project balance is $6250 or less:

   For these low-risk situations, SFR does not need PI authorization to transfer the final balance. SFR will transfer the balance to a program already specified by the department or to the residual program. A residual program is an account whose sole purpose is to hold balances from fixed price sponsored projects. Use of funds in the residual program is the discretion of the department head consistent with departmental policy.

   If the final project balance is greater than $6250 but less than 25% of payments received:

   Because these situations are moderately risky, SFR must have confirmation that the study is complete before transferring residual funds. Therefore, SFR will send an email to the PI and academic department asking for confirmation that the study has been completed and requesting a program number to receive the residuals.

   If the final project balance is greater than $6250 and 25% or more of payments received:

   These are high-risk balances and the PI must complete the Fixed Price Agreement Closeout Form to document that the high balance is justifiable to auditors. SFR will send an email to the PI asking him or her to complete the form. The department head also has the authority to complete this form in lieu of the PI (or dean if the PI is a department chair).

   The PI must include an explanation for why the actual expenses were substantially less than the payments received and how the work was able to be successfully completed at the substantially reduced cost. The PI must also obtain the department head/designee's written approval and forward the form to the grant administrator in SPA. The grant administrator will verify that the information is complete and forward the form to a SPA manager for approval or a determination that funds should be returned to the sponsor or other alternative action (e.g., requiring the sponsor's concurrence in retaining the balance.) The SPA manager will handle the matter on a case-by-case basis and inform the PI, department, and SFR of the resolution.

2. Final Closeout Action

   SFR will take the closeout action approved by the SPA manager. Unless it has been determined that the unexpended balance should be returned to the sponsor, SFR will transfer the balance to the residual account or program identified by the department and close the project account. SFR will notify the department administrator and PI when this action is complete, and then inactivate and close the project.