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1.1: Award Closeout - General


To ensure timely and accurate award closeout and project cost center inactivation while maintaining compliance with applicable laws and guidelines from the sponsoring agency and the University policy as a whole. Unless the sponsor authorizes an extension, the University must liquidate all obligations incurred under the Federal award no later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award (Uniform Guidance 200.343 - Closeout). 

The closeout of the award does not affect the right of the sponsor to disallow cost and recover funds on the basis of a later audit and the University's ability to continue internal review and correction of the cost center to remove overages or unallowable costs not invoiced or allowed by the sponsor. (Uniform Guidance 200.344 - Post-Closeout Adjustments). 


The terms and conditions contained and referenced in the sponsor’s Notice of Award (NOA) must be reviewed to ensure accuracy and compliance in managing awards. The award project cost centers must be reviewed monthly by the responsible Department Business Administrator (DBA) and the Principal Investigator (PI) to ensure that all expenses are allowed.

At closeout, the department will have a period of time (usually 30 days) following the award expiration date to finalize all expenditures, release all encumbrances and resolve all outstanding budget and compliance issues on the award. The Office of Contracts and Grants (OCG) will submit all invoices and final reports in accordance to agency guidelines. Late reporting should have the prior approval of the sponsor.

After all final financial reports are submitted to the sponsor, OCG will begin the process of inactivating the cost center in the financial system by first clearing all encumbrances and zeroing out the budget, liabilities and equity. This is in accordance to University policy.  All payments should be received from the sponsor within 180 days after project termination. If payment from the sponsor is not received within 24 months after the project termination, the award will be flagged and formal collection action will be taken to recover the unpaid amount. Collection efforts will continue for up to 2 years before the amount is reported to, and submitted for approval as a write-off by the Board of Regents.


  1. Period of Performance – The period between the award start date and the award expiration date.  All expenditure incurred must be within this period unless written approval is given by the sponsor.
  2. Period of Availability – The period of performance plus a period before the award start date (usually 90 days) and a period after the award end date (usually 90 days).
  3. Grant/Award Expiration Date – The last day of the period of performance; also referred to as the Award End Date.  Expenses incurred after this date are unallowable.
  4. Grant/Award Accounting End Date – The last date that any general ledger activities can be posted to the award cost center.
  5. Budget Balance Available (BBA) – The current award budget less all expenses and encumbrances-to-date posted to the PeopleSoft general ledger (1074 report).
  6. Cash Balance (CB) – The total amount paid by the sponsor to date less total expenses. It is shown on the balance sheet of the general ledger (1074 report) under “claim on cash”.
  7. Cost Reimbursable – The payment method given to awards in which the sponsor pays the University based on actual expenses incurred under the agreement and posted to its general ledger. The project ID chart field begins with “G”.
  8. Fixed Price Awards – The payment method given to awards that provides a specific level of support (payment) without regard to actual costs incurred under the agreement.  The project ID chart field begins with “C”.
  9. Letter of Credit (LOC) – A processed through the respective Federal agencies’ online payment system(s).  The Federal agencies authorize a line of credit for University of Houston to utilize for the purpose of drawing down funds.  Funds drawn down are based on actual expenses incurred and posted to its general ledger.  Research Accounting Department will usually submit a LOC payment request (drawdown) every 2 weeks.
  10. Closeout - Closeout means the process by which the sponsoring awarding agency determines that all applicable administrative actions and all required work of the award have been completed and the following actions have been taken (this does not mean that the PeopleSoft cost center is inactivated):
    • 90 days after the period of performance, all financial, performance, and other reports as required by the terms and conditions of the award must have been submitted to the sponsor. The Sponsoring agency can approve an authorization to extend the 90 days requirement.
    • The sponsor has made prompt payments to UH for the allowable reimbursable costs under the award being closed out.
    • The University has refunded any balances of unobligated cash that the sponsoring agency paid that are not authorized to be retained for use in other projects.
    • The University has accounted for all “real property”, namely equipment. Equipment vested with sponsor must be returned.
    • In the Financial system, the University has made an upward or downward adjustment to the award budget to align with the expenses reported and approved for payment by the sponsor.
  11. Project Cost Center Inactivation –Up to one year after the expiration of the award and after closeout, the University’s administrative actions to zero out the cost center’s BBA, liabilities and assets and change the status in its financial system to inactive. For awards with non-payment and collection issues, this action will be delayed until payment is received or the balance is authorized for write-off and the payment liability cleared. 
  12. Write off - An administrative action that is approved by the Board of Regents. It allows the University to offset the receivables cause by non-payment from the Sponsor. 


  1. 90 days prior to the expiration date of the award, the department and principal investigator (PI) will receive closeout notifications. The notification will include instructions for closeout.
  2. At expiration, the department and principal investigator (PI) will receive a second reminder regarding the award expiration.  At this point, the department has additional time (usually 30 days) to get all final expenses incurred during the period of performance posted.
  3. 30 days after expiration, all expenses should be posted to the cost center with the exception of sub-recipient final invoices. On federal awards, the sub-recipients are given 45-60 days after the expiration date to submit final invoices. 
  4. 60 days after expiration The OCG Research and Financial Office (RFS) will begin its review process in order to generate the final invoice or financial report for the award. During this time the award budget will be reduced to the expenditure amount and OCG will remove any unallowable cost posted to the grant to the Departmental IDC cost center.
  5. 90 -120 days after award expiration days (some agencies allow less days), all final reports and invoices are due on or prior to the 90 days.  Financial reports, property reports, and patent reports are prepared and submitted to the sponsor by the RFS. Final technical reports must be submitted by the PI and a copy sent to OCG. Late invoices and drawdowns that are outside the period of availability may not be honored.
  6. 30 days after the final invoices are submitted, payments are expected from sponsors. Both LOC payments and invoice payments are booked to project cost centers by Research Accounting Department.
  7. After close out with the sponsor (usually 90 days after expiration), the university will continue its process to inactivate the project cost center in its financial system. This may require the extension of the award accounting end date beyond the award period of availability end date.
    • If there is a negative cash balance for any of the reasons listed below, it will be dealt with as indicated:
      • Over spending of the awarded amount (will cause a negative budget): The overage will be moved to the departmental IDC cost center.
      • Non-payment by the sponsor due to unallowable cost: The unallowable expenses will be moved to the departmental IDC cost center.
      • Non-payment by the sponsor because of PI failure to meet project deliverables: OCG will work with PI and the department to resolve the issue.
    • If there is a positive cash balance for any of the reasons listed below, it will be dealt with as indicated:
      • Underspending of the payment amount on cost reimbursable awards: The award budget will be reduced to the expenditure amount, a revision to the final invoice will be made if needed and the funds will be returned to the sponsor.
      • Underspending of payment amount on fixed priced award: When allowed by the sponsor terms and conditions, overages on fixed price awards may be moved to PI residual cost centers.
      • Credit due to vendor rebates, reimbursement or the removal of unallowable charges: The award budget will be reduced to the expenditure amount, a revision to the final invoice will be made if needed and the funds will be returned to the sponsor

Revised: May 11, 2015