National Background Check Program Grant Closeout Process

CMS and Office of Acquisition and Grants Management have a process that must be followed for closeout of the National Background Check Program grant. The information below is intended as a guideline for States in preparation for the end of their grant periods. Specific questions about the closeout process should be directed to the CMS Project Officer.

Definition of Closeout
Closeout Responsibilities
Program Responsibilities
Recipient Responsibilities
Compliance Reminder

Definition of Closeout

Closeout is a process that takes place following the expiration or termination of the project period for a discretionary grant or cooperative agreement. The purpose of closeout is to ensure that final reports are received and evaluated, allowable costs are determined, and amounts due to either the Federal Agency or to the recipient are determined and payment arrangements made.

Closeout Responsibilities

The grant closeout is a critical piece in the life cycle of a grant. Preparation for closeout should begin three months prior to the end date of the grant in order to accurately forecast expenses and any adjusting entries that need to be made.

Program Responsibilities

  1. Issue closeout communications to recipient
  2. Provide closeout guidance and advice
  3. Receive and evaluate all required final reports (quarterly reports and final progress report)
  4. Ensure reconciliation of financial reports

Recipient Responsibilities

Recipient must submit, no later than 120 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award. A subrecipient must submit to the pass-through entity Recipient), no later than 90 calendar days (or an earlier date as agreed upon by the Recipient and subrecipient) after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award.

To initiate the closeout process, Recipient must create an amendment through the Amendment Module in GrantSolutions. The amendment type is Grant Closeout [CMS] (Type 6). The creation of this amendment and upload of all required documents must be completed no later than 120 days following the period of performance end date noted on Recipient’s Notice of Award (NoA). Submission of these closeout documents other than as instructed in this letter will result in Recipient’s reports being considered delinquent.

Final closeout documents include:

  • Cover Letter
  • Final Progress Report
  • Final Invention Statement and Certification (HHS 568)
  • Final Federal Financial Report (SF-425)
  • Tangible Personal Property Report Cover Sheet (SF-428)
  • Tangible Personal Property Report (SF-428-B)
  • Tangible Personal Property Report – Supplemental Sheet (SF-428-S)
  • Negotiated Indirect Cost Rate Agreement(s)

Details on these requirements and other relevant information to ensure proper closeout of the award are listed below. Please note that the following information is consistent with Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance, 2 CFR 200) and HHS Guidance, 45 CFR Part 75.

Cover Letter

As a requirement within the Grant Closeout Amendment, the Cover Letter should include an assertion that grant activities are completed, all required closeout materials are attached, and the award is ready for closeout. Please provide any additional information related to the closure of the award and the POC for follow-up inquiries or revisions.

Final Performance/Progress Report

Recipient must upload the final performance/progress report to GrantSolutions as part of the closeout process unless alternative guidance is provided by Recipient’s Grants Management Specialist and/or Project Officer.

A Final Invention Statement and Certification (Form HHS 568)

Recipient completes and submits Form HHS 568 signed by the AOR within 120 days following the expiration or termination of a grant or award. The Statement must include all inventions which were conceived or first actually reduced to practice during the course of work under the grant or award, from the original effective date of support through the date of completion or termination. The Statement shall include any inventions reported previously for the grant or award as part of a non-competing continuation application. Recipients must also provide details about all inventions that have been licensed but not patented, and include details on income resulting from HHS-funded inventions and patents. Unpatented research products or resources—research tools—may be made available through licensing to vendors or other investigators. Income earned from any resulting fees must be treated as program income. This reporting requirement is applicable to grants and awards issued by the U.S. Department of Health and Human Services in support of research and research-related activities. If no inventions have been made under this award, insert the word “None” under “Title of Invention” in Section B, Inventions.

Final Federal Financial Report (SF-425, FFR)

Recipient completes a final expenditures FFR in the Payment Management System (PMS) within 120 days of the period of performance end date as instructed in the Standard Terms and Conditions and a copy of this final FFR is uploaded to the Grant Closeout Amendment in GrantSolutions.

  • The final FFR must show cumulative expenditures under the award and any unobligated balance of federal funds.
  • The final expenditure report cannot show any unliquidated obligations.
  • Lines 10d-10h of the SF-425 must be completed (and lines 10i through 10o as applicable and/or allowable).
  • Line 11 must be completed if Recipient’s grant or cooperative agreement award included indirect costs.

Per 45 CFR §75.381(b), a Recipient must liquidate all financial obligations incurred under the Federal award no 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. This deadline may be extended with prior written approval from the CMS Grants Management Specialist.

Allowable costs must be incurred during the period of performance (except as described in 2 CFR §200.461 for award funds issued on or after December 26, 2014). Costs incurred beyond the period of performance end date will not be reimbursable. It is the Recipient's responsibility to reconcile any financial reports submitted to PMS and to CMS.

The Recipient is responsible for the timely closeout of any subgrant(s) and or contract(s) under the grant and the financial settlement of any claims so that it can meet CMS closeout requirements. Recipient should establish a receipt deadline date, no later than 90 days after the period of performance end date, for its subrecipients/contractors to submit closeout data, final reports, and final claims that allows Recipient to meet the requirements for submission of final reports.

Indirect Cost Rate Agreement(s)

If indirect costs are included on the final SF-425 (FFR), please provide the applicable negotiated indirect cost rate agreement(s) for the entire period of performance (unless a 10% de minimis rate has been requested per 2 CFR §200.414(f)). A final or pre-determined rate must be provided for the entire period of performance (through one or more rate agreements). Recipient must provide supplemental attachment information for line 11 of the final expenditures FFR, as necessary, to convey rate information throughout the entire period of performance.

Disposition of Federally Owned Property, Equipment, and Residual Unused Supplies, SF-428 (Cover Page) and SF-428-B (Award Closeout Attachment Report)

Upon completion (or early termination) of a project, Recipient must take appropriate disposition actions. Recipients of funding from CMS should proceed in accordance with the guidance provided within this letter and applicable term and condition.

Disposition Guidelines

When original or replacement equipment acquired under a Federal award is no longer needed for the original project or program or for other activities currently or previously supported by a Federal awarding agency, except as otherwise provided in Federal statutes, regulations, or specific CMS disposition instructions, disposition of equipment will be made as follows:

Equipment:

  • Items of equipment with a current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further obligation to CMS.
  • Except as provided in §200.312(b), items of equipment with a current per-unit fair market value in excess of $5,000 may be retained by Recipient or sold. CMS is entitled to an amount calculated by multiplying the current market value or proceeds from sale by CMS’ percentage of participation in the cost of the original purchase. If the equipment is sold, CMS may permit Recipient to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses.
  • Recipient may transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, Recipient must be entitled to compensation for its attributable percentage of the current fair market value of the property.
  • In cases where a Recipient fails to take appropriate disposition actions, CMS may direct Recipient to take disposition actions.

Supplies:

  • Title to supplies will vest in Recipient upon acquisition. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, Recipient must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. The amount of compensation must be computed in the same manner as for equipment. See calculation methodology outlined above for equipment or 2 CFR §200.313(e)(2).

Required Disposition Reporting

Recipient must complete and submit the Tangible Personal Property Report (SF-428, Cover Sheet) signed by the Authorized Organizational Representative (AOR). The SF-428 is a standard form used by awarding agencies to collect information related to tangible personal property (equipment and supplies). Additionally, a Recipient must submit the Award Closeout Attachment Report (SF-428-B). The SF-428-B allows recipients to request specific disposition of Federally-owned property and acquired equipment as well as provides a means for calculating and transmitting appropriate compensation to CMS for residual unused supplies.

As noted in 1.b of SF-428-B, if Recipient agency is in possession of federally-owned property or acquired equipment (defined as nonexpendable personal property with an acquisition cost of $5,000 or more under the award), Recipient must also submit a SF-428-S, Supplemental Sheet, that lists and reports on all federally-owned or acquired equipment under the specific grant or cooperative agreement award. If there is no tangible personal property to report, select “d.” in section 1 of the SF-428-B and indicate “none of the above.” Recipient must utilize Attachment SF-428-C, Disposition Request/Report) to request disposition instructions not already addressed in this letter and the terms and conditions of award, or to report disposition of Federally-owned property or acquired equipment under Federal assistance awards at any time other than award closeout (i.e., during the award period or after closeout as long as the Federal government retains an interest in the item).

Audit Requirements

Although there is no separate requirement for an audit as part of closeout, Recipient is reminded that it is still required to comply with the audit requirements as outlined in Federal grant regulations and the terms and conditions of Recipient’s award. If, after the closeout has been completed, a subsequent audit report identifies unallowable costs, CMS has the right to disallow costs and recover an appropriate amount based on sustained audit findings.

Corrections to Closeout Documents to Include Refunds or Debts to Federal Government

The closeout of a grant does not affect Recipient’s obligation to return any amounts due as a result of later audit disallowances, refunds, corrections, or other actions. All funds due that are not returned constitute a debt to the federal government. It is necessary that any returned funds to PMS must be accompanied by the following information: PMS account number (PAN), PMS Document Number, the reason for the return, and any other pertinent information relating to the amount to assist PMS in properly accounting for the funds. For additional guidance on returning funds, see PSC Return Funds/Interest.

After funds are returned appropriately and processed in PMS, recipient must submit a revised final Federal Financial Report (SF-425) to CMS via GrantSolutions Grant Note.

Records Retention Requirements

Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained by the grantee for a period of 3 years from the date of submission of the final SF-425 (FFR) except if any litigation, claim, financial management review, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved and final action taken.

Compliance Reminder

Failure to submit timely and accurate final reports may adversely affect future funding to the organization and/or awards with the same principal investigator (PI). Accordingly, CMS may impose sanctions on organizations that fail to correct recurring reporting problems. Such sanctions may include restriction of facilities and administrative (F&A) costs, delay or withholding of further awards to the project or program, and/or designation as a high-risk grantee.

If recipient does not submit all closeout materials in accordance with the terms and conditions of the award, CMS will unilaterally closeout the award based on non-receipt of acceptable final reports. CMS will notify the recipient of the federal funding amount at which CMS will close the award, and whether there is a debt or disallowed costs based upon discrepancies in prior reporting. CMS will also report the recipient’s material failure to comply with the terms and conditions of the award to the Federal Awardee Performance and Integrity Information System (FAPIIS) (per 2 CFR §200.344(i)) and may pursue other enforcement actions (per §200.339). If Recipient anticipates not being able to meet the above closeout time frames or requirements, it must immediately notify the Grants Management Specialist in writing via a Grant Note in GrantSolutions with a follow-up notification via email.

Late closeout may also extend the time period for retention of records by the grantee because the 3-year record retention period begins with the submission of the final FFR. Sec 45 CFR Part 74.53 and 45 CFR Part 92.42. Retention and access requirements for records.