GAP 200.185, Fixed-Price Residual Balance Transfer

I.    Purpose

II.   Definitions

III.  Procedures

IV.  Federal Regulations

V.   Resources

 

I. Purpose

At the pre-award stage, Principal Investigators (PIs) and grant managers must prepare accurate, detailed proposal budgets, and costs associated with the fixed-price award to fully capture all resources necessary for the work performed on a project. If the cost of a project exceeds the award amount, the University absorbs the additional costs required to perform the work; when the award amount exceeds the costs, the University generally retains the remaining residual balance.

This General Accounting Procedure (GAP) establishes a process that (1) provides access to residual balance remaining on reportable fixed-price awards and (2) provides a consistent method for the review and disposition of residual balance.

Significant residual balances on fixed-price awards may call into question the validity of the proposed budget, scope of work, effort committed and the proper allocation of project expenditures.

 

II. Definitions

Fixed-price award. A fixed-price award is an agreement in which a fair price for the anticipated work is determined at the proposal stage of the project and is not subject to any upward or downward adjustment of awarded funds based on actual costs incurred. The award amount is pre-determined, based on fixed fee as defined in the agreement, and is paid to Duke on a schedule listed in the award agreement.  Fixed-price awards include, but are not limited to fixed fee contracts, deliverable-based agreements, non-industry clinical trial agreements, fixed-rate agreements, and other awards where there is no requirement that any remaining funds be returned to the sponsor.

Residual Balance. An unobligated, unspent balance remaining on a fixed-price award at the conclusion of the project period after all project costs have been allocated to the award, all financial obligations have been met, and all deliverables have been received by the sponsor.

Reportable fixed-price award. Projects where invoices and financial reports are submitted by an institutional office (PAFM or TBS); represented by the A03, 20x – 28x and 30x – 38x WBSE ranges. This does not apply to industry-sponsored clinical trials.  For the purposes of this GAP, reportable fixed-price awards <$20,000 (total award amount) are generally exempt from the residual balance review procedures outlined below, however Management Centers may require additional justifications at closeout for awards <$20,000.

 

III. Procedures

When a reportable fixed-price award of ≥$20,000 (total award amount) has ended, all costs have been allocated to the project WBSE(s), and the PI has confirmed all deliverables have been or will be submitted by sponsor's deadlines, the Grant Manager (GM) should complete and submit all required closeout documentation according to the procedures identified below. In doing so, the GM confirms the following conditions are met:

• All deliverables have been completed or any outstanding work activities, reports or deliverables that remain open or in question by the sponsor will be submitted by sponsor's deadlines.
• All applicable, allowable and allocable expenses have been charged to the award. This includes effort for all project personnel, including PI effort.
• All revenue is recorded.

If a residual balance remains at project closeout, the GM will:

• Calculate the estimated residual balance and enter this into the Final Project Balance field on the PI Attestation and the Residual Balance field on the Closeout tasklist(s).
• Residual balance justifications must be included in the comment sections of the PI Attestation and Closeout Tasklist prior to submission for approval.
  • If the residual balance is ≥25% of the original award or ≥$50,000, the GM should consult with their PI to determine the residual balance justification to explain the difference between the budgeted/proposed costs and the actual costs of the project, as well as a description of planned expenditures for the remaining funds.
• The GM must add an approver from Department/Center/Institute management for review and approval of the Closeout Tasklist.  

If the residual balance is ≥40% of the original award or ≥$100,000, the Award Management Teams will obtain confirmation from the associated School’s Dean’s Office (or OIPM if the Center/Institute is outside of School management) that the School accepts the financial and compliance risk created by the residual balance. The request for final disposition of funds will therefore be at the discretion of each School.

Upon receipt of the required closeout documentation, the Post Award Financial Management team (PAFM) will review the terms and conditions of the award, the closeout documentation, and the allocated expenses. Following review and action, PAFM will assess F&A and transfer the direct cost portion of the residual balance to the identified account. All transfers will be subject to the final closure of the project by the sponsor.

Exceptions will be managed in coordination with PAFM and the applicable Dean’s Office, or OIPM if the Center/Institute is outside of School management.

 

IV. Federal Regulations

This GAP reflects the provisions of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, 2 CFR Part 200, otherwise referred to as the Uniform Guidance. The UG became effective as of December 26, 2014, and all awards issued on or after this date must be managed in accordance with its provisions. It is important to verify the applicable regulations for an individual award, which may be found in the Award Notice issued by the funding agency.

These guidelines pertain to federally sponsored projects and should be used as guidance for all sponsors unless specifically addressed in a non-federal sponsor’s policies and/or procedures.

This GAP supersedes previous GAP versions, Duke Policies, Guidelines, etc. 

 

V. Resources

• GAP 200.180 Closeout of Sponsored Project
• Sponsored Projects Closeout Timeline Quick Reference Guide

Note: This guidance is administrative in nature and is not a cost reimbursement policy. Failure to comply may or may not result in adjustments of charges to the award. Noncompliance with this policy does not mean this cost is unallowable from an external perspective. Any adjustments of charges will be as required under applicable federal cost reimbursement principles. If a cost is removed from an award for any reason, whether or not related to this guidance, the cost will generally be charged to departmental funds.