GAP 200.185, Fixed Amount Award Residual Balance Transfer

Contents

1. Purpose
2. Definitions
3. Procedure
4. Federal Regulations
5. Resources

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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 amount award to fully capture all resources necessary for the work performed on a project. If the cost of a project exceeds the funding amount, the University absorbs the additional costs required to perform the work; when the funding 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 amount awards and (2) provides a consistent method for the review and disposition of residual balance.

Significant residual balances on fixed amount 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 amount award: A fixed amount award establishes a fixed budget based on a reasonable estimate of actual costs as determined by the sponsor, without regard to actual costs incurred. The awarded amount may be predetermined by, or negotiated with, the sponsor, and is paid to Duke on a schedule listed in the terms of the award agreement. Fixed amount awards include, but are not limited to fixed fee contracts, deliverable-based agreements, non-industry clinical trial agreements, fixed rate (unit price) awards, and other award types where there is no requirement for financial reporting nor that any remaining funds be returned to the sponsor.

Residual Balance: An unobligated, unspent balance remaining on a fixed amount 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 accepted by the sponsor.

Reportable fixed amount 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 amount 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 amount award 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 GAP 200.180, Closeout of Sponsored Project as well as the specific requirements 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.

For Federally-funded fixed amount awards, Duke must certify in writing to the sponsor that the project was completed as agreed to in the terms of the award (or identify those activities that were not completed) and that all costs incurred were allowable (per the definition in the Uniform Guidance at 2 CFR 200.403).

If the award has a residual balance, justification for the balance must be included in the closeout submission for any agreement providing >$20,000 in funding. Refer to Fixed amount award and residual balance management guidance for approved methods of including the required information at closeout. Justification details required and approval necessary vary based on conditions as noted below:

Residual balances < 25% of total agreement/revenue amount or < $50,000 require:

• Explanation of the difference between the budgeted/proposed costs and the actual cost of the project.

Residual balances ≥ 25% of total agreement/revenue amount or ≥ $50,000 require:

• Explanation of the difference between the budgeted/proposed costs and the actual cost of the project.
  • If a Closeout Tasklist is not required, information should be maintained in the department/unit.
• Description of planned expenditures for the remaining fund

Residual balances ≥40% of the agreement/revenue amount or ≥$100,000 require management center approval acknowledging the School/Center/Institute 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. For reportable projects, this approval will be obtained by the ORA/CAMT reviewer of the closeout submission. For non-reportable projects, the department/unit/center/institute is responsible for obtaining approval and documenting the project’s financial records.

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 Management Center.

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 revised as of October 1, 2024, and all awards issued on or after these dates 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

• Fixed amount award and residual balance management (MyResearchPath)
• GAP 200.180 Closeout of Sponsored Project
• Sponsored Projects Closeout Guidance (MyResearchPath)
• Additional Closeout Tools 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.