Impact of Discrepancies Between Final Financial Reports for Grant Closeout

Notice Number: NOT-OD-15-136

Key Dates
Release Date:  August 4, 2015

Related Announcements
NOT-OD-14-084
NOT-OD-15-111
NOT-OD-15-135    

Issued by
National Institutes of Health (NIH)

Purpose

The purpose of this Guide Notice is to remind recipients of their responsibility to ensure the accuracy of their final grant expenditure and cash disbursement reports prior to submission and reiterate and reiterate the unilateral closeout policy announced in 2014.  It also introduces additional procedures NIH will take to facilitate financial reconciliation and accurate reporting.

Background

Longstanding NIH policy on grant closeout states that Final Federal Financial Reports (FFRs) must indicate the exact balance of unobligated funds and may not reflect any unliquidated obligations. There must be no discrepancies between the Federal share of expenditures reported on the final FFR and the net cash disbursements reported to PMS on the Transactions section on the FFR. Unobligated funds must be returned to NIH or must be reflected by an appropriate accounting adjustment in accordance with instructions from the GMO or from the payment office. Final cash transaction reports, as specified by PMS, must be submitted to that office. It is the recipient's responsibility to reconcile reports submitted to PMS and to the NIH awarding IC.  (See Section 8.6 of the NIH Grants Policy Statement.)

NOT-OD-14-084 advised recipients that financial reconciliation upon completion of an award includes ensuring that the balances of expenditures and unobligated funds reported on the final expenditure FFR match those amounts as reported in the last federal cash report submitted to PMS.  New HHS policy stipulates that if the NIH cannot undertake a “bilateral closeout”—i.e., closeout with the cooperation of the grantee—within 180 days of the project end date, it must initiate “unilateral closeout”—i.e., closeout without receipt of acceptable final reports—or for those grantees that are not in compliance with the policy.

Procedures

NIH has introduced a “warning” in the FFR module encouraging the recipient to ensure  no discrepancies between the Federal share of expenditures they are about to reported on the final FFR and the net cash disbursements reported to PMS in its last quarterly cash transaction report.  The text of the warning will state:

“Please verify that the Federal share of expenditures you are about to report to NIH on the Final FFR match the net cash disbursements your organization reported in its last quarterly cash transaction report submitted to PMS. It may be necessary to revise the data reported in the last quarterly cash transaction report, and/or the data in this Final expenditure FFR prior to submitting this Final FFR to NIH.  Please be advised, in accordance with HHS policy, NIH will not accept the Final expenditure FFR if the Federal share of expenditures reported in the Final FFR does not match the net cash disbursements reported in the last PMS quarterly cash transaction report.

Recipients are advised that NIH will subsequently implement a validation rule within the eRA Commons within the FFR module to ensure that these balances equal at the submission of the Final expenditure FFR.  If the balances do not, the recipient will receive an error message and will be unable to submit the Final FFR into the eRA Commons.  NIH will issue a follow-up Guide Notice announcing the implementation date for the system’s new functionality.

Inquiries

Please direct all inquiries to:

Division of Grants Policy
Office of Policy for Extramural Research Administration (OPERA)
Office of Extramural Research
National Institutes of Health
Telephone: 301-435-0949
Email: GrantsPolicy@od.nih.gov