Achieving Transparent and Efficient Grant Closeout for State and Local Governments

Closing out a grant when it reaches the end of its lifecycle is not just a necessity but an opportunity. This process can be particularly complex for state and local governments, given the challenges of managing multiple subrecipients, adhering to various funding structures, and ensuring compliance across diverse programs. A successful closeout confirms that the grant has been appropriately handled and opens doors to future funding opportunities by demonstrating good governance practices. A well-executed closeout is not only critical for compliance but can also position your organization as a reliable and responsible steward of public funds, increasing the likelihood of securing future grants.

The importance of grant closeout cannot be overstated. An effective and efficient closeout ensures accountability and transparency in meeting the terms and conditions of the award. Since every federal and state grant awardee is required to perform closeout to meet grant program guidelines, an effective and efficient grant closeout includes the following steps:

Step 1 - Planning (Pre-Closeout)

• Review closeout requirements and terms and conditions in the Notice of Award and Agreement.
• Standardize the closeout process across grant programs to maximize resource utilization and ensure effective, efficient, and timely closeout.
• Budget closeout costs. [Recent updates to the Uniform Guidance 2 CFR Part 200 allow for the inclusion of costs after the performance period for all awards after October 1, 2024.]
• Provide subrecipients and beneficiaries clear guidance, deadlines, and forms and templates for monitoring and closeout.
• Maintain regular updates with stakeholders, setting clear expectations and timelines to ensure smooth coordination and avoid delays during the closeout process.

Step 2 – Monitoring

• Confirm subrecipient has submitted all required documents to meet Uniform Grant Guidance 2 CFR Part 200.322 subrecipient monitoring requirements.
• Retain application, executed agreements and addendums, risk assessments, drawdown requests, progress reports, desk review and on-site review findings, recommendations, reporting, and applicable indirect cost rate approvals.
• Review financial records and submitted reporting to ensure requests for reimbursement have been paid, advance awards have been reconciled with expenditures, and award funds have been fully spent in accordance with award terms and conditions.
• Reconcile all grant expenditures, disbursements, and advance payments to your accounting records.
• Account for all real property and equipment purchased with grant funds included in awardee property and asset inventory.
• Maintain a file for each beneficiary with applications, agreements, reports, and other documentation requested to support all grant activity.
• No more than six (6) months and at least 90 days before the grant performance period end date, communicate the closeout process and conduct closeout process webinars with subrecipients and beneficiaries.
• Maintain open lines of communication with subrecipients and beneficiaries, sharing your expectations of their role in closeout, closeout timeline, and final report submission.

Step 3 – Closeout Implementation

• Verify all documentation in your files supports grant compliance, Uniform Guidance, and other compliance requirements outlined in the award agreement.
• Update required risk assessments.
• Complete, sign, date, and submit closeout report to funding entity [Grant final report].
• Issue an official closeout letter to the awardee noting the closeout date, award date, and total funds awarded and spent. [Indicate any applicable recoupment and post-closeout requirements.]
• Before submitting, conduct a final review to ensure all documents are error-free, organized, and compliant with grant terms to prevent delays and ensure completeness.

Step 4 - Post-Closeout

• Retain grant records, files, and documents for the required number of years.
• Ensure records, files, and documents retained are readily available upon request.
• Adhere to reporting requirements of award funding entity following closeout.
• Assess the overall effectiveness of the grant program: Reflect on the closeout process to identify areas for improvement and measure its success. Assessing effectiveness helps refine future closeouts and demonstrates to funding entities that you are committed to continuous improvement, which can increase your chances of securing future funding.
• Track key performance indicators (KPIs), such as completion time, compliance issues, and feedback from the funding entity, to identify improvement areas and streamline future closeouts.
• Identify lessons learned to use for future funding opportunities.
• Share grant outcomes and best practices with stakeholders, award entities, partners, and the public.

Pitfalls to Avoid

When going through grant closeout, there are common pitfalls to avoid, including:

• Not fully grasping the significance of complying with the Uniform Guidance 2 CFR Part 200 and specific funding entity guidelines. Failure to do so can lead to non-compliance issues and potential loss of future funding opportunities.
• Not ensuring that the grant management software effectively tracks and reports activities. This is crucial for maintaining accurate financial and non-financial records, streamlining the closeout process.
• Not providing ongoing training throughout the grant's lifecycle on up-to-date regulations and best practices, which can lead to knowledge gaps, errors, inefficiencies, and non-compliance.
• Failing to prioritize the security and retention of sensitive financial and programmatic data can lead to data breaches or difficulties during audits or post-closeout reviews.

Effective and efficient grant closeout can open doors to future funding awards. UHY Advisors is here to be your reliable resource for effective grant closeout. Our qualified and experienced team of professionals is ready to support you every step of the way, ensuring careful planning, attention to detail, and adherence to grant guidelines for successful grant closeout. For more information, please contact State and Local Government Practice Managing Director Jack Reagan or Senior Manager Claire Collins.