By:Benjamin Kofi Quansah, CGMS
Part 5- Grant Close-Out Procedures
In our final part of the five-part series, we examine the close-out procedures regarding grant funding.
In the previous parts, we examined the basics of grants management, pre-award requirements for grant funding, and post-award requirements for grant funding.
What is Close-out?
The process that the funding agency and the award recipient follow after determining that the recipient has completed all applicable administrative actions and required work related to the award.
Types of Close-out
- Bilateral Closeout
Closeout carried out cooperatively by the recipient and the funding agency.
- Unilateral Closeout
The process by which the funding agency closes out an award without receipt of acceptable final reports required by the terms and conditions of an award, after making reasonable efforts to obtain them. It is a measure of last resort.
Overview of the Final Phase of the Grants Management Lifecycle
Successful closeout has its roots in good management practices.
If the recipient relies on generally accepted accounting principles, keeps complete records, follows documented policies and procedures, and demonstrates that it has fulfilled the project or program goals, closeout will be accomplished smoothly.
Despite the best efforts of the Funding agency and recipient, closeouts can be delayed by unforeseen circumstances or events.
Some of the common issues that delay closeout include:
- The recipient is currently being audited.
- The recipient no longer exists.
- Delayed technical deliverables
- Unavailability of key recipient personnel to complete their part of the closeout process
Criteria for closing the grant
In order to close out the grant, the funding agency entity ensures the following:
- All grant funds have been expended
- Grant agreement between the recipient and funding agency has expired (as applicable)
- All outstanding issues have been resolved
- Process begins immediately the grant ends
- Laying the foundation for accurate and smooth final reporting during closeout demands operational vigilance.
- Recipients must periodically reconcile financial records with awarding agency records, conduct inventories, and account for equipment and other property purchased for the award program, and follow up on audit findings.
Responsibilities of Funding Agency and Recipient in the close-out process
- Request from the recipient the following documents
- Project completion Report
- Financial Report Summary showing Budget, Actual Expenditure, Variance, Explanation of Variances (E.g. 10% or more.
- Updated Detailed Asset Register
- Validate the information received from the recipient
- Execute Grant documentation
- Grant Closeout Agreement
The recipient’s responsibilities during closeout are not limited to financial reconciliation.
They will always include activities in three areas:
- Financial closeout,
- Property disposition, and
- Financial staff will first begin preparing for closeout by identifying and making final payments related to any outstanding obligations for an award;
- They will also identify any unobligated balances, disallowed costs, and amounts potentially subject to collection.
- The recipient will reconcile its accounting records and financial reports to account for the source and use of funds for each grant- funded activity.
- The recipient must also determine how to dispose of various types of property (E.g. real property, equipment, supplies, and intangible property) that it has acquired for an award program but no longer needs.
- Funding agency’s guidelines must be followed, and decisions regarding property disposition are subject to the funding agency’s approval.
- The recipient’s management team coordinates the programming and financial aspects of the project and documents the project’s accomplishments before closeout.
- As part of the recipient’s programmatic internal controls, the organization must evaluate whether funded activities achieved the goals proposed in the project work plan.
- The evidence of having met these goals is documented in qualitative and quantitative program performance metrics and reports.
- Financial accounting must be documented through various reports. As a best practice, the recipient’s accounting team must have conducted routine reconciliations and reported the financial execution of the award on at least a quarterly basis throughout the period of performance.
- The recipient organization should be well prepared to produce the final financial reports.
- The recipient’s final responsibility is to submit final closeout reports to the funding agency, with the relevant certifications.
Post- Close-out considerations
- A grant-funded program may not cease to exist at the end of the performance period. Closeout merely provides a snapshot of its financial and programmatic position.
- The funding agency has the right to disallow costs and recover funds on the basis of a later audit or other reviews.
- The recipient is obligated to return any funds due as a result of later refunds
- The recipient is subject to an audit
- The recipient must retain records as required by the funding agency
Writer: Benjamin Kofi Quansah, CGMS
Certified Grants Management Specialist