Fixed Price and Fixed Fee Contract - Closeouts

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

Before the project end date:

Sponsored Projects Administration (SPA) will send a notification to PIs and their unit administrators approximately 60 days before the end date of a fixed price award, inquiring whether a no cost extension is needed. If additional time is needed to complete the work, the PI must obtain a no cost time extension (from SPA or from the sponsor if the latter requires), requesting the amount of additional time needed and updating progress information or any budgetary detail the sponsor requests. SPA must countersign requests to sponsors.

Form UM 1767 (Departmental Fixed Price Closeout Checklist) is available for departmental use in maintaining documentation of the closeout. These forms are specifically recommended for retention within the department whenever there were significant changes from what had originally been proposed (e.g., changes in scope, budget, or timeline; significant unexpended balances or overdrafts).

After the project end date:

On a monthly basis, Sponsored Financial Reporting (SFR) identifies all sponsored projects that have ended and have not been sent through the closeout process.  SFR  will work with the PI/unit administrator to confirm the sponsored project is ready to be closed and proceed with the normal closeout process.

Distribution of Final project balance:

If there is a residual balance after the project has ended, SFR will assess the published F&A rate to that balance. After the F&A has been charged, the direct cost balance will be transferred to a non-sponsored chartfield string specified by the unit administrator or to the residual program.

Example of balance apportioned to direct and indirect

Calculation: True Residual Balance apportioned to direct and indirect

$14,516 is distributed to a departmental chartfield string

$7,984 is distributed to the academic unit’s F&A recovery string

Distribution of Final project balance if F&A was reduced

If the sponsored project has received a reduction or waiver from the published F&A rate, SFR will first use the residual balance to assess the published F&A rate on all expenses charged to the project. If there is any remaining balance after that assessment, SFR will assess the published F&A rate to that balance. After the F&A has been charged, the direct cost balance will be transferred to a non-sponsored chartfield string specified by the unit administrator or to the residual program.

Example of balance apportioned to direct and indirect

Calculation 1: Recovery of Full F&A on actual expenses

Total Actual Expenses $52,000 + F&A @55% MTDC = $28,600

Full F&A ($28,600) - minus actual F&A charged (16,640) = $11,960

$11,960 sent to the unit’s F&A recovery string

Preliminary Residual Balance of $31,360 - $11,960 = $19,400 (true residual balance)

Calculation 2: True Residual Balance apportioned to direct and indirect

$12,516 is distributed to a chart-string assigned by the unit

$6,883 is distributed to the unit’s F&A recovery string

Oversight:

Research Integrity and Compliance (RIC) will periodically assess the fixed price awards held by a PI or a department to verify proper costing (pricing and charging of applicable expenses). Additional clarifying information may be sought, or corrective actions identified if there appears to be a pattern of large unexpended balances or large overdrafts.