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Chapter 7: Closeout

Objectives:

At the end of this chapter you will:

1. Understand the importance of closeout.
2. Know what is required to closeout your agreement.
3. Have an awareness of EPA's rights to use reports and products produced under a grant.
4. Understand the importance of proper equipment disposition.
5. Become aware of how a final audit can impact the project and the recipient.

The closeout process is a systematic method of ensuring that all technical work (e.g., product development) and administrative requirements (e.g., review of FSRs) have been finalized. Closeout also ensures that any remaining unexpended funds are de-obligated.

Formal closeout can occur only when all parties are satisfied with the final product, all eligible costs have been accepted, all repayments have been received, all terms and conditions or Special Conditions have been met. If an audit is underway prior to closeout, all issues must be resolved prior to closeout.

Please do closeouts as soon as the technical work and the administrative work are finished. Closeouts become more difficult the later they're done: key personnel leave; delays tie up unexpended funds. (In 1997 the Agency was criticized by Congress when it accrued a backlog of over 19,000 unclosed assistance agreements.)

EPA issued a closeout policy for all EPA programs on August 27, 1992.

The timing of closeout depends primarily on the type of agreement. The chart below illustrates when closeout of various types of agreements should take place.

Closeout of most non-Superfund project grants, including WWT Construction grants, begins when the project period has expired.

Recipient Type Timing

Project Grants Project Complete

Superfund

ALL Project Complete, Terminated or Annulled

Closeout of Continuation Awards and Environmental Program Grants begins on the date the most recent continuation agreement expires.

Closeout of Superfund Cooperative Agreements occurs at the following times: Pre-remedial - when all preliminary assessment/site inspection (PA/SI) activities have been completed or terminated at all sites.

Single-Site CA - when all activities covered by the statement of work (SOW) are completed or terminated at that site.

Superfund Multi-Site Cooperative Agreement (MSCA) - is somewhat different from other CAs. Closeout of an individual site covered by the MSCA occurs when all activities at that site are completed or terminated. Closeout of the MSCA occurs when all activities at all sites covered by the SOW have been completed or terminated.

Superfund Core Program Cooperative Agreements (CPCAs) - when the State has completed the activities specified in the SOW.

Steps to Closing out an Assistance Agreement:

Step 1 90 days prior to the project expiration date, the GMO will send a "Reminder Letter" to the recipient and the Project Officer reminding them of the closeout requirements.

Step 2 After the project is complete, the recipient will submit for the PO's review and acceptance the Final Technical Report/Project to the Project Officer. Any administrative reports, such as the SF-334 "MBE/WBE Reports", should be submitted to the GMO.

Step 3 After the PO receives and reviews the Final Report/Product and finds it to be satisfactory, he/she needs to inform the Grants Specialist that the report/product was acceptable and ready for closeout. An email is sufficient, but your program may have other requirements.

Step 4 Once the recipient has submitted the final Financial Status Report to the Financial Management Office, and the PO has found the Final Technical Report/Project to be acceptable, the assistance agreement can be officially closed. The GMO will update all records to reflect the closeout status.

Step 5 The GMO will prepare a closeout letter to the recipient informing them that the assistance agreement has been closed. A copy of the letter will be forwarded to the PO.

Disposition of Property Requirements

At the time of closeout, the Project Officer must reaffirm to the GMO the ultimate disposition of personal property, real property, intangible property, or Federally-owned property. Remember, the PO should have already addressed the ultimate disposition of the personal property, real property, etc. during the pre-award stage.

Personal Property (equipment and supplies): Local Governments, Indian Tribal Governments, Universities, and Non-profits

Equipment: If the recipient retains the equipment for continued use on the project or other federally funded projects:

When all projects are complete and the equipment, due to depreciation, no longer possesses a unit acquisition cost of greater than $5,000, the recipient is free to dispose of the item with no further obligation to the federal government.

When all federal projects are complete and the equipment still possesses a unit acquisition cost of $5,000 or greater, the recipient may continue to use the equipment if they reimburse the US Treasury Department for an amount calculated by applying the proportionate Federal share of the original purchase price to the fair market value of the item.

When the recipient sells the equipment they must reimburse the US Treasury Department for an amount calculated by applying the proportionate Federal share of the original purchase price to the sales proceeds from the item. The recipient is entitled to retain $500 or 10% of the proceeds, whichever is less, for the selling and handling of expenses.

If the recipient returns the equipment to the EPA:

When there is no need for the equipment within EPA, the GMO reports the equipment to the GSA to see if other Federal agencies need the equipment.

When the recipient ships the equipment to EPA or elsewhere, per EPA instructions, EPA will reimburse the recipient for an amount calculated by applying the proportionate recipient share of the original purchase price of the item and any reasonable shipping or storage costs.

When the recipient otherwise disposes of the equipment, per EPA instructions, EPA will reimburse the recipient for such costs incurred in that disposition of the equipment.

Supplies: When the award is terminated or completed, or the supplies are no longer needed for any Federally sponsored program or project, disposition will be as follows:

If the aggregate fair market value of the unused supplies total $5,000 or more, the recipient or sub-grantee will compensate the awarding agency for its share.

If the aggregate fair market value is less than $5,000, the recipient or sub-grantee may keep the supplies and is not required to reimburse EPA.

State Governments

When real property is no longer needed for the originally authorized purpose, the recipient must request disposition instructions from EPA.

Real property must be disposed of using of the following options: Retain title and compensate EPA;

Sell the property and compensate EPA; or

Transfer title to EPA or a third party designated/approved by EPA

The amount paid to EPA (or to the recipient, if transferred) is computed by applying EPA's (or the recipient's) percentage participation in the cost of the original purchase to the proceeds of the sales after deducting any actual and reasonable selling and fix-up expenses.

Sales procedures must provide for competition to the extent practicable and result in the highest possible return.

Unless waived by EPA, the Federal Government retains a royalty free, nonexclusive, and irrevocable license to: Obtain, reproduce, publish, or otherwise use the data first produced under an assistance agreement and authorize others to receive, produce, publish, or otherwise use such data for federal purposes.

Research Findings produced under an award that were used by the Federal Government in developing an agency action - the Federal awarding agency shall request, and the recipient shall provide, the research data so that it can be made available to the public through the procedures established under FOIA (see OMB Circular A110, revised 9/30/99).

If the recipient used any Federally-owned property, the recipient must ensure the property is disposed of before closeout can be completed.
The recipient must notify the GMO that the property is available for return to EPA and the GMO will issue disposition instructions to the recipient.

Record Retention

Record retention requirements apply to all supporting documentation, including documentation of significant actions and decisions, cost records, scope of work, correspondence, applications, pre-award reviews, and funding decisions.

If litigation, claim, negotiation, audit, or other action involving the records was started before the end of the retention period, the recipient must keep records until either the completion of the action and resolution of all issues which arise from it, or until the end of the established retention period, whichever is later.

Record retention requirements are different for EPA and recipients!

Recipients:

Most recipient's record retention requirements begin with the date the recipient submits the final expenditure report SF-269, "Financial Status Report".

For reimbursement programs, the recipient record retention requirements start with the final payment request either the SF 270, "Request for Advance or Reimbursement".

For Continuation awards (including Environmental Program Grants), the recipient's record retention date begins with the date it submits its last FSR (SF 269) for the period covered in the agreement.

Also, if litigation, claim, negotiation, audit, or other action involving the records was started before the end of the retention period, the recipient must keep records until either the completion of the action and resolution of all issues which arise from it, or until the end of the established retention period, whichever is later.

  • ! Recipients must keep their records for three (3) years after the date they submitted the final SF 269, "Financial Status Report".

EPA:

EPA must keep records in-house for at least one (1) year after the closeout of the agreement and then send the records to the Federal Records Center (FRC). The FRC will destroy the records when they are seven (7) years old.

Summary

At the beginning of the chapter, we identified several objectives you would accomplish after reading the chapter. The objectives are listed below, each followed by a brief summary of the key points the chapter covered.

1. Understand the importance of closeout. The closeout process is a systematic method of ensuring that all technical work (e.g., product development) and administrative requirements (e.g., review of FSRs) have been finalized. Closeout also ensures that any remaining unexpended funds are de-obligated.

2. Know what is required to closeout your agreement. Formal closeout can occur only when all parties are satisfied with the final product, all eligible costs have been accepted, all repayments have been received, all terms and conditions or Special Conditions have been met.

3. Have an awareness of EPA's rights to use reports and products produced under a grant. Unless waived by EPA, the Federal Government retains a royalty free, nonexclusive, and irrevocable license to: Obtain, reproduce, publish, or otherwise use the data first produced under an assistance agreement and to authorize others to receive, produce, publish, or otherwise use such data for federal purposes.

4. Understand the importance of proper equipment disposition. At the time of closeout, the Project Officer must reaffirm to the GMO the ultimate disposition of personal property, real property, intangible property, or Federally-owned property. Remember, the PO should have already addressed the ultimate disposition of the personal property, real property, etc. during the pre-award stage.

5. Become aware of how a final audit can impact the project and the recipient. If litigation, claim, negotiation, audit, or other action involving the records was started before the end of the retention period, the recipient must keep records until either the completion of the action and resolution of all issues which arise from it, or until the end of the established retention period, whichever is later.

Questions

1. Who initiates closeout?

2. What is the PO's main responsibility under closeout?

3. What would you do if your recipient had equipment and you had not addressed disposition preaward?

| Chapter Summaries | Introduction | Planning Consideration | Pre-Application | Review/Selection | Funding/Award Phase | Post Award/Audit | Closeout | Official EPA Project File | Regulations | Contents | Glossary | Summaries | Return to the Grants and Debarment Home Page |

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