Expenses at Closeout

Allowable Expenditures Near the End of the Project

Investigators should consider the following when ordering supplies and materials near the end of a project's funding period:

  • Billing and payment can lag behind ordering.
  • Purchased items must be delivered and used for the benefit of the project during the life of the project. Auditors will review expenditure activity at the end of the project period. A large amount of orders placed at the end of a project may give the appearance that the purchases will be used for future research. Stockpiling in this manner is not allowable.
  • An exception to the cost principle requiring direct benefit to the project is orders placed at the end of the project to replenish stock used during the project period. This is distinguished from stockpiling because its purpose is to bring supply levels of an item to the level at the beginning of the project, thereby properly charging the project for supplies used on the project
  • Another exception to this cost principle is for capital items specifically authorized under the sponsored agreement. When the purchase of equipment or other capital items is specifically authorized under a sponsored agreement, the amounts authorized for such purchases are assignable to the sponsored agreement regardless of any use that may subsequently be made of the equipment or other capital items involved.

Allowable Expenditures After the End of the Project

Valid post-termination expenditures are those charges that post to the account after the end date (within the closeout period specified by the sponsor), but actually incurred before the end of the project. Some examples are:

  • Payroll for hours worked prior to the end date, but paid and posted after the end date.
  • Long distance telephone charges (which usually lag one month) for services provided within the performance period.
  • Liquidation of valid purchase orders (must be in the form of completed PO, not a purchase requisition) that were encumbered in the University system prior to the end date.
  • Expense transfers and corrections of errors that either move expenditures, or transfer allowable expenditures to the account.

Sponsored Projects & Contracting Services will review all post-term expenses for validity. Detailed backup documentation must accompany all post-term expenses in order to evaluate and determine the direct benefit to the project.