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Federal Compliance Requirements, Part VII – Period of Availability

Sara BrainardOur compliance requirements series continues with Period of Availability, which is one of the 14 different compliance requirements that could have a direct and material effect on federal grants received by organizations. This requirement stipulates costs be incurred within a certain timeframe, be pre-authorized, or obligated.  Some federal awards and contracts allow a percentage of the funds to be held as carryover for future periods, while other awards and contracts may require excess funds be returned after project completion or the end of the funding period.

Federal awards and contracts may specify a time period an organization may use the federal funds.  Only costs resulting from obligations incurred during the funding period and certain authorized pre-award costs (such as engineering costs for a construction project), may be charged to federal funds.  Payment for these costs should be made within the allowable time periods as stipulated in the grant award or federal contract.  If costs are incurred outside the award period, the organization can request approval from the granting agency or make payment with non-federal dollars.

To ensure the appropriate costs are being allocated, consider the following processes:

  • Does the accounting system prevent or identify costs outside of the award period?
  • Are different account numbers used to record costs associated with different grant years?
  • Who reviews the disbursements? Is the person familiar with the availability requirements?
  • Are “end of period cut-offs” communicated with program managers?
  • Do management and program managers review budget-to-actuals throughout the award period?

If the organization has excess federal funds, the organization may have to return the monies to the federal granting agency.  The timeframe to return the funds can vary; however, funds are usually returned within 90 calendar days after project completion or the end of the award period.  The granting agency may extend this deadline upon request.

Some awards allow for grant funds to be considered as carryover for future periods.  In most instances there is a time limit for the carryover, but some awards also have a limit as to how much of the award can be carried to future periods.  A common example is Title I awards, which must be obligated during the 27 months from July 1 of the fiscal year through September 30 of the second following fiscal year.  In addition, no more than 15 percent of Title I funds can be carried over beyond the initial 15 months of availability.  For the Title I award, the granting agency may issue a waiver for the 15 percent limitation once in a three year period.

Period of Availability is inter-related with the Reporting federal grant compliance requirement.  The determination of excess funds to be returned and carryover allowances are determined during the closeout period of the grant.  Final amounts are calculated for the closeout reports, which may consist of financial and performance reports, and are communicated to the granting agency.  The Reporting requirement will be described in more detail as our series of Grant Compliance continues in subsequent newsletters.  Grant recipients should be cognizant of reviewing grant awards and federal contracts along with the OMB Circular A-133 compliance supplement and codified federal regulations to ensure they are meeting the appropriate requirements.

Sara Brainard

Sara Brainard

CPA at Ketel Thorstenson, LLP
Sara joined the Ketel Thorstenson team in September of 2008. She is a National American University graduate with a Bachelor of Science in Accounting.
Sara Brainard

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