For Encumbrances Near To and After Termination Date
Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity liquidate all obligations incurred under the Federal award not 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).
Items not invoiced for and received during the award period of performance are considered unallowable by an auditor although the PI may considered it to be beneficial to the project and it is a reasonable expense at the time the order was placed. To avoid audit finding of this nature, orders for items need for the project should be placed well in advance (60-90 days) of the project expiration date to ensure invoicing and delivery prior to that expiration date.
Period of performance means the time during which the department may incur new obligations to carry out the work authorized under the award. It is the period between the start and end dates or expiration date of the award. Departments are given an adjustment period of 30 days after the end date of the award to process all payments for outstanding expenses and to clear payroll and Purchase Order (PO) encumbrances. OCG is responsible for clearing the Sub-recipient PO and IDC encumbrances on the award.
Under some circumstances the 30 days adjustment period may be extended to facilitate the payment of sub-recipient invoices since sub-recipient are given up to 45 days after the award expiration to submit a final invoice. The Principal investigator and the Department Business Staff will receive a closeout notice email 90 days prior to project end date. A second notice will be sent at the award expiration date.
Recommended Encumbrances release clean up at project expiration:
Run the 1074 and take the following steps:
- Soft Commitments (UGLS1074.5) - Delete all transactions in soft commitment that will not be processed.
- Open Commitments (UGLS1074.4)
- Release any PO encumbrances that will not be used following the PO Finalize Instructions on the Finance References page (under Cost Center Verification Toolkit).
- Run the BOB report and move position funded on the expired cost center to another cost center or to suspense if the position is vacant.
- Contact OCG to Release any IDC encumbrance
- Balance Sheet (UGLS1074.6) - Check the balance sheet for P-Card and Travel Card liability balances on your cost centers to be removed