Division of Research Offices > Contracts and Grants > Manage Awards

Encumbrances Near To and After Termination Date

Items not received during an award period are not considered by an agency to be of benefit to the project and are routinely disallowed on audit, even if they were legitimate charges at the time the order was placed. Therefore, orders for supplies and equipment should be placed well in advance (60-90 days) of the account expiration date to ensure delivery and utilization prior to that expiration date.

Per the requirements of OMB Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations,” in order to be included as allowable/billable costs to the agency, all encumbrances on sponsored project accounts must be paid and liquidated within the specified closeout period following account expiration. In the case of most federal projects, this period is designated as 90 days. However, under some circumstances this time period is shorter. The number of days the Principal Investigator has to clear encumbrances is stated in the Notice of Award for the sponsored project. It is imperative that departments work closely with Accounts Payable concerning potential problems with outstanding purchase order encumbrances or with the appropriate on-campus service center for outstanding SCR encumbrances in order to get them paid and liquidated within the time limitation.

Closing notices [see Closeout Process] for sponsored research projects are sent to Principal Investigators and Department Business Administrators 90 days prior to project termination. These closing notices include a reminder to clear all encumbrances.

If you need any additional time to complete reports or acquire supplies, contact your OCG Research Administrator for aid in securing a no-cost date extension or to make other arrangements.