Sponsored Projects Closeout and Write-Off Guidelines
Learn about sponsored projects closeout and write-off guidelines
Effective July 1, 2026, UC San Diego will revert the write-off threshold for direct costs on sponsored projects from $200 back to $100. For non-federal awards that have already been paid, only balances of $100 or less will be written off. For deficits, SPF will write off up to $5; departments must transfer costs if the deficit exceeds $5, except when the remaining costs are limited to salary and benefits.
The $200 threshold was originally implemented during the Oracle Financial Cloud transition at the onset of the pandemic to reduce administrative burden and facilitate award closeouts during a time of significant operational challenges. With systems now stable and processes streamlined, the new guidance reinstates UC San Diego’s standard practice. This change reinforces financial controls, ensures consistency, and improves audit defensibility through clear institutional standards.
Transition Period:
Write-off requests submitted through June 30, 2026 will continue to follow the current $200 threshold on both balances and deficits. This extended timeframe gives departments sufficient opportunity to plan and adjust before the new threshold takes effect.
Sponsored Projects Closeout Requirements, Write-Off and Residual Balance Guidance
Project Closeout Requirements
A sponsored project is considered ready for closeout only when all of the following conditions have been met:
- Expense Corrections Completed: The department has made all necessary expense corrections to ensure alignment with the amounts reported to the sponsor.
- General Ledger Verification: The department has verified that the final expenses posted in the general ledger match the amounts reported to the sponsor.
- Compliance with Budget and Sponsor Guidelines: The department has confirmed that all final expenses posted in PPM are in alignment with the approved award budget and the sponsor’s terms and conditions.
- Final Financial Report Submitted: The sponsor’s final financial reporting requirements have been completed by the Sponsored Projects Finance team.
Financial Expense Report (FER) Submission Guidelines
To ensure compliance and accountability in financial reporting, please follow the updated guidelines for submitting a Financial Expense Report (FER):
- Allowable Costs: All expenses included on the FER must comply with the cost principles defined in Uniform Guidance (2 CFR 200) and as stipulated on the agreement
- Purpose of FER: The FER provides essential supporting documentation for financial reports submitted to external sponsors.
- Departmental Responsibility: Departments are responsible for exercising due diligence in ensuring that all project expenses are accurate, complete, and fully reconciled prior to FER submission. Any pending expenses recorded on the FER need to have back up documentation provided.
- Prohibited Line Items: FERs that include assumed SPF write-off amounts greater than $5 will no longer be accepted by Sponsored Projects Finance (SPF).
- Less than $5 write off indicated on the FER will be processed after all pending costs have been posted with associated IDC - see Cost Write-Off Policy below.
- Less than $5 write off indicated on the FER will be processed after all pending costs have been posted with associated IDC - see Cost Write-Off Policy below.
Important Note: During the transition to the new financial system, FERs containing assumed write-offs greater than $5 may have been accepted as a temporary measure. This practice is no longer allowed. All FERs must reflect actual, allowable project costs only.
Write-Off and Residual Balance Guidance
Departments must actively manage both overspent and underspent balances on sponsored projects. Any write off permitted will be processed only after all pending costs and associated IDC have been posted. Write offs are generally done only at the award level.
Cost Write-Off Policy
Write-offs apply under the following conditions:
Additional Notes on Overspent Awards:
- Overspent balances must not be transferred to other Federal awards (except in rare cases allowed by the sponsor).
- Write-offs may occur only during final closeout after all pending costs have been posted.
- Departments must demonstrate that reasonable cleanup efforts have been made.
- Overspent coats are the responsibility of the award-owning department.
Additional Notes on Underspent Awards (Unexpended Balances)
Residual balances on awards where expenses are less than the awarded amount must be handled according to the sponsor’s terms and conditions:
- Federal Awards: Write-offs are not allowed. Any unspent funds must typically be de-obligated or returned to the sponsor. ($5 or less will be written off if the sponsor deadline has passed)
- Non-Federal Awards: Some sponsors may allow retention of residual balances, but must comply with sponsor terms and conditions.
If an Expense Adjustment Results in Overbilling:
- The department must submit a revised Financial Expense Report (FER) reflecting the corrected expenses.
- SPF will issue a refund to the sponsor, if required.
- Departments should consult their SPF Accountant for award-specific guidance.