Financial Affairs Policies

3702(B)

UMB Policy on SPAC Sponsored Award Closeout

Financial Affairs   |   Approved March 21, 2024


Responsible VP/AVP

Dawn M. Rhodes, DBA, MBA


Applies to Faculty, Staff, Students


Purpose

To set forth the standards to ensure that UMB can meet a sponsor’s final financial reporting or invoicing deadline in a timely and accurate manner. This also allows Sponsored Projects Accounting and Compliance (“SPAC”) to close these awards timely in the UMB financial system. 

Policy Statement

The timely recording of financial transactions to sponsored awards is critically important, especially as an award’s end date approaches, since it is the basis for financial reporting or invoicing, cash collection, and sponsor closeout requirements. This policy alerts the research community to the urgency of timely submission of final financial reports or final invoices for sponsored awards. 

For all federal funds received from a sponsor, UMB agrees to provide final financial reports or final invoices in accordance with 2 CRF Part 200 {Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards} (“Uniform Guidance”). Non-federal agencies have become increasingly stringent about the timely submission of final financial reports or invoices as this is considered a key mechanism reflective of proper accountability and good stewardship of funding.  

Non-compliance with sponsored award final reporting or invoicing requirements has adverse consequences including but not limited to, disallowing costs, withholding payment or further awards, wholly or partly suspending the grant, and audit finding risks.  

The various types of Sponsored Awards covered under this policy are: 

  •  Letter of Credit (LOC) Grant
  • Cost Grant or Contract
  • Volume or Milestone Grant or Contract
  • Schedule Grant or Contract
  • Schedule/Cost Grant or Contract

Instructions and guidelines for preparation, submission, and final deadlines for financial reports and/or invoices are set forth in the SPAC Procedure for SPAC Award Closeout. 

UMB employees who fraudulently create or submit a final Federal Financial Report (“FFR”) or final invoice to a Sponsor may be subject to disciplinary and/or criminal action. 

Letter of Credit Grant or Cost Grant or Contract 

  •  SPAC is the UMB department responsible for issuing final financial reports and/or final invoice to Sponsors. 
  • SPAC issues final reports or invoices for expenses that have posted in UMB’s financial system. Any variance to those charges must be fully supported with documentation by the department responsible for the expense. 
  • The department must return a signed final report of expenditures (ROE) or final FFR to SPAC at least ten (10) business days prior to the due date required by the sponsor to ensure timely submission.  
  • If a department is unresponsive to the request by SPAC for a review and signature on the final ROE or final FFR, SPAC will meet the sponsor’s deadline using the expense that is posted in the UMB financial system at the time of preparation of the final report or final invoice.  

Volume or Milestone Grant or Contract 

  1.  Once the expiration date of the award is reached for a volume or milestone award, the department responsible for monitoring and reaching volume or milestone limits must determine if there is the need for them to: 
      • Create a final invoice. 
      • Request an extension of the award end date. 
  2. UMB cannot continue to bill on an award 6 months past the expiration date of a volume or milestone award unless there is a documented reason for the delay submitted by the responsible department to SPAC and approved by SPAC.  

Schedule or Schedule/Cost Grant or Contract 

  1.  Once the expiration date of the scheduled award is reached, the award will be closed within six (6) months by SPAC in collaboration with the responsible department or 
  2. Closed by SPAC in collaboration with the responsible department according to the sponsors time requirements. 

Definitions

Letter of Credit (LOC) Grant: A method of combining billing of multiple awards from the same Federal agency, using an agency portal. Cash draws can be performed at a frequency determined by the award recipient entity, typically multiple times a month when the Sponsor is a larger federal agency and at least monthly when the Sponsor is a smaller federal agency. Amounts requested are based on the expenses incurred in UMB’s financial system at the time of the draw. 

Cost Grant or Contract: Amounts requested are based on the expenses incurred in UMB’s financial system for the period of the bill.  

Volume or Milestone Grant or Contract: Payments are based on an agreed, set amount (price or fee) for the specified work to be performed rather than actual costs incurred in doing the work. UMB is required to provide the work for that amount, whether the actual costs incurred are greater than or less than the agreed amount. The difference between a Volume award and a Milestone award is that a Milestone award has a contractual limit, while a Volume award has a “cost per” budget that is variable depending on the amount of deliverable achieved. 

Schedule Grant or Contract: Payments are based on an agreed upon payment schedule with set amounts. Payments are made on a schedule rather than based on actual costs incurred in doing the work. UMB is required to provide the work for that amount, whether the actual costs incurred are greater than or less than the agreed amount.  

Schedule/Cost Grant or Contract: Payments are made on a schedule rather than based on actual costs incurred in doing the work. However, a final accounting of the actual costs will be required at the end of the award. Any unused funds must be returned to the Sponsor. 

Closeout – the steps undertaken to ensure final costs allocated to contracts and grants are allowable and allocable and have been fully billed/collected, cost share obligations have been met and properly documented, and required financial reports have been submitted to the sponsor. For federal awards, the Uniform Guidance provides guidance for closeout of awards. For non-federal awards, the sponsor’s award terms and conditions provide guidance for closeout. When all financial administrative steps have been completed, the project ID is inactivated in the UMB’s financial system. 

Scope and Exceptions

This policy applies to Sponsored Awards received from Sponsors where payments are due to UMB based on Letter of Credit (LOC), Cost, Volume, Milestone, Schedule, or Schedule/Cost billing as determined by the Sponsored Award. 

Federal and State Student Financial Aid are excluded from this policy.  

Individual federal fellowships do not require a final financial report, but they do require closeout. 

 

 

Roles and Responsibilities

Schools/Department Administration 

  •  Ensuring allowability, allocability and reasonableness of expenses against awards. 
  • Reviewing costs on a monthly basis. 
  • Sending supporting documentation for costs included in final report or invoice but not yet posted to the financial system. 
  • For LOC or Cost awards: Returning the reviewed and signed final ROE or FFR at least ten (10) business days prior to the due date required by the sponsor to ensure timely submission.  
  • For Volume or Milestone awards: At expiration, determining if a final invoice or extension of time is required and following the appropriate steps to achieve the required outcome.  
  • Working with SPAC to ensure timely closure of all awards in UMB’s financial system. 
  • Adhering to the departmental responsibilities in the SPAC Procedure for Sponsored Award Closeout. 

SPAC Team  

  •  For LOC or Cost awards: Submitting the final FFR or invoice to the sponsor by the required due date. 
  • Working with the departments to ensure that all other awards are closed within six (6) months of expiration.  
  • Conducting periodic reviews to ensure that expenses included in the FFR or cost invoice are reasonable and allocable under the terms and conditions of the award. 
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