University of Minnesota  Procedure

Fixed Price and Fixed Fee Contract - Closeouts

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Please use the contact section in the governing policy.

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, 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 (for example, 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. The SFR accountant will work with the PI/unit administrator to confirm the sponsored project is ready to be closed out in EFS and then proceed with the normal closeout process.

Distribution of Final project balance:

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

Example of balance apportioned to direct and indirect
TypeDirect CostsF&A @54% MTDCTotal
Award Amount$64,935$35,065$100,000
Total Actual Expenses$50,000$27,000$77,000
Preliminary Residual Balance  $23,000
Calculation: True Residual Balance apportioned to direct and indirect
TypeDirect CostsF&A @54% MTDCTotal
Residual Balance$14,935$8,065$23,000

$14,935 is distributed to a departmental ChartField string.

$8,065 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, the SFR accountant will first use the residual balance to assess and charge the published F&A rate on all expenses charged to the project. If there is any remaining balance after that assessment, the SFR accountant will assess the published F&A rate to that balance. After the F&A has been charged, the remaining balance will be transferred to a departmental non-sponsored ChartField string specified by the unit administrator or to the residual program.

Example of balance apportioned to direct and indirect
TypeDirect CostsF&A @32% MTDCTotal
Award Amount$75,758$24,242$100,000
Total Actual Expenses$52,000$16,640$68,640
Preliminary Residual Balance  $31,360

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

Total Actual Expenses $52,000 + F&A @54% MTDC = $28,080

Full F&A ($28,080) - actual F&A charged (16,640) = $11,440

$11,440 sent to the unit’s F&A recovery string

Preliminary Residual Balance of $31,360 - $11,440 = $19,920 (true residual balance)

Calculation 2: True Residual Balance apportioned to direct and indirect

TypeDirect CostsF&A @54% MTDCTotal
Residual Balance$12,935$6,985$19,920

$12,935 is distributed to a ChartField string assigned by the unit.

$6,985 is distributed to the unit’s F&A recovery ChartField string.

Oversight:

In instances where the residual balance is at least $50,000 and at least 25% of the budget, the SFR Director will verify charging of applicable expenses prior to that balance being distributed to the non-sponsored ChartField string(s).