When a federally funded project is terminated, grantees are required to complete all closeout activities as directed by the sponsor. As part of this process, the grantee must submit a final invoice, reimbursement request, or financial report. Typically, grantees may request reimbursement for the following categories of costs:
- Costs incurred up to the new project end date,
- Costs necessary for administrative closeout, and
- Non-cancellable obligations.
For projects that have been terminated, CGA will coordinate with the Principal Investigator and the Fiscal Officer to guide the closeout process, including final financial reporting and invoicing. Please note that this guidance is subject to change as additional information is received from the sponsor.
Below is MSU’s current interpretation regarding the allowability of specific costs at the time of award termination or during the administrative closeout phase. While the costs outlined below may be considered reasonable, MSU cannot guarantee sponsor reimbursement. Any costs not reimbursed are the responsibility of the department or unit.
- Faculty salaries (including summer salary). These may be cancelable depending on the type of appointment. For example, tenured faculty salaries must be reassigned upon termination, or completion of administrative closeout activities, to other funding sources. Fixed-term faculty appointments are cancelable for budgetary reasons if reassignment is not possible. Colleges may choose to reassign or terminate such appointments. If terminated, salary costs during the contractual notice period (typically 30–60 days) may be considered non-cancellable. Please consult MSU Human Resources to determine if an appointment is eligible for termination.
- Non-faculty salaries. These salaries are generally cancelable for budgetary reasons if reassignment is not possible. As with faculty, colleges determine whether to reassign or terminate. If terminated, salary costs during the required notice period (typically 30–60 days) may be considered non-cancellable. Consult MSU Human Resources for specific termination notice requirements.
- Graduate student support. Graduate support is typically considered non-cancellable through the end of the current semester if the student cannot be reassigned. Salary, fringe benefits, and tuition through the semester's end may be included in reimbursement requests.
- Hourly wages. Hourly appointments are considered cancelable. Please consult MSU Human Resources regarding applicable notice requirements.
- Equipment and supplies. Purchases should generally not occur after the termination date. However, if items cannot be returned for refund or if purchases were already initiated and are non-cancellable, they may be considered allowable.
- Travel costs are typically cancellable. If upcoming travel costs have been incurred and cannot be cancelled, such as conference fees, hotel, or airfare, they may be considered non-cancellable. Costs related to organizing events, such as non-refundable venue deposits, may also be considered non-cancellable.
- Subawards and consultant services are typically cancellable, however, costs incurred by the subrecipient/consultant for their work performed through the date of termination, are allowable.Subrecipients may also have their own non-cancellable obligations.
- Human and animal subject research costs. Costs associated with orderly closeout of human and animal subjects may also be considered non-cancellable obligations. The Principal Investigator should notify MSU’s IRB or IACUC offices, as applicable, immediately upon termination for additional guidance.
- Publication costs. Costs associated with publications may be incurred after the project end date. Depending on the reason cited for termination, the sponsor may not require publication and therefore, not allow such costs.
Even when a project is terminated early, MSU is required to submit all final reports in accordance with sponsor requirements. Please refer to CGA’s final cost guidance at Sponsored Program Final Cost Deadline Guidance | MSU Sponsored Programs Administration. The cost posting deadline will appear under the Closeout tab in Account Explorer and will reflect the payment request due date. Given accelerated deadlines for terminated awards, CGA will work directly with units to address any needed adjustments.
References:
2 CFR 200.343: Effects of suspension and termination.
- Typically applicable to federal grants and cooperative agreements.
- “Costs to the recipient or subrecipient resulting from financial obligations incurred by the recipient or subrecipient during a suspension or after the termination of a Federal award are not allowable”
- Costs during suspension or after termination are allowable if:
- The costs result from financial obligations which were properly incurred by the recipient or subrecipient before the effective date of suspension or termination, and not in anticipation of it; and
- The costs would be allowable if the Federal award was not suspended or expired normally at the end of the period of performance in which the termination takes effect.”
FAR 52.249-5: Termination for Convenience of the Government.
- Typically applicable to federal contracts
- The amount to be paid “may include reasonable cancellation charges incurred by the Contractor and any reasonable loss on outstanding commitments for personal services that the Contractor is unable to cancel; provided, that the Contractor exercised reasonable diligence in diverting such commitments to other operations.
2 CFR 200.472: Termination and standard closeout costs.
- “Administrative costs associated with the closeout activities of a Federal award are allowable.
- For example, salaries of personnel preparing final reports, publication and printing costs, costs associated with the disposition of equipment and property, and related indirect costs). These costs may be incurred until the due date of the final report(s).”
