After the Grant is Over: Grant Close Out and Retention Kelly Shipp - - PowerPoint PPT Presentation

After the Grant is Over: Grant Close Out and Retention

• Kelly Shipp Simone

Deputy General Counsel, Council on Foundations

• Sue Fulton

Grants/Financial Manager, Endowment for Health

Grant Close Out Process

• Formalize the conclusion
• Assess and document lessons learned
• Further the grantmaker’s mission
• Provide historical record
• Share knowledge

Grant Close Out and Retention

Questions to Consider for the Grant Close Out Process

• When to close?
• What is the process for closing a

file?

• Who is authorized to close a file?
• What documentation is retained in

closed grant files?

Grant Close Out and Retention

Questions to Consider for the Grant Close Out Process

• How long will closed grant files be retained?
• What is the long‐term storage policy and

practice?

• Retain files in

–on‐site archival storage –off‐site in a storage or archival facility –store using photographic or other electronic methods Grant Close Out and Retention

What documentation is retained in closed grant files?

• Proposal
• Final approved grant budget
• Internal grant recommendation
• Grant notification or award letter
• Proof of tax status and other compliance‐related

documentation

• Expenditure responsibility documentation (if applicable)
• Documentation of any approved changes
• Grantee reports
• Closing letter to the grantee
• Project evaluation (if applicable)
• Record of payment(s)/return(s)

Grant Close Out and Retention

Retention

• Document Retention

– What to keep? – For how long?

• Record Retention Policies
• Electronic vs. Paper

Grant Close Out and Retention

Retention

• Does your foundation keep denied

applications?

– Why or why not?

• If you have a records retention policy, who

is responsible for oversight/ implementation of the policy?

• What are the pros/cons of retaining the

records electronically instead of hard copy?

Grant Close Out and Retention

Retention: What to Keep Permanently?

• Governing Documents
• Tax Exempt Documents (federal, state,

etc.)

• IRS Correspondence
• Meeting/Board Documents
• Year End Financial Statements

Grant Close Out and Retention

Retention: Other documents

• Bank Statements
• IRS Forms 990
• Documents related to investment

assets

* Keep state and local laws and other regulations in mind. Grant Close Out and Retention

Retention: Grant Documents

• Grant Applications/Proposals

– Approved – Denied

• Evidence grantee is public charity

– Type of documentation

• Public charity status
• Supporting organization status (if grantor is private

foundation or grant is from a donor advised fund)

– Length of time: “Audit window”

Grant Close Out and Retention

Retention: Grant Documents

• Grants to public charities (con’t)

–Grant award letters –Grantee reports

Grant Close Out and Retention

Retention: Grant Documents

• Expenditure responsibility grants

(Examples: Private foundation grants to certain supporting organizations, non‐charities)

‐ Regulations require certain documents to be available to the IRS during the audit window

Grant Close Out and Retention

Retention: Grant Documents

• What ER documents to keep

‐ Grant agreement ‐ Each report received from grantee ‐ Copy of each report (if any) made by grantor of any audits or their investigations with respect to the grant ‐ Pre‐grant inquiry (not required under regs but recommend keeping)

• Grants to non‐charities from public

charities

Grant Close Out and Retention

Retention: Grant Documents

• Grants to Non‐US entities

– Expenditure Responsibility (same as above) – Equivalency Determination

Grant Close Out and Retention

Retention: Grant Documents

• Grants to individuals by PFs for

travel/study

– All info used to evaluate qualifications of potential grantees (including unsuccessful applicants!) – Identification of grants

– Amount and purpose of each grant – Follow‐up information used to comply with requirements

Grant Close Out and Retention

Record Retention Policies

• Highly recommended
• Elements

– Covered documents (electronic/hard copy) – Retention guidelines outlining when permissible or mandatory to destroy applicable documents – Procedure for ceasing destruction in case of actual or potential investigation

Grant Close Out and Retention

Electronic vs. Paper

• Does the IRS mandate particular

method?

• Best practice?

Grant Close Out and Retention

Resources

• IRS Publication 4221‐PC: Compliance

Guide for 501(c)(3) Public Charities

• IRS Publication 4221‐PF: Compliance

Guide for 501(c)(3) Private Foundations

• Keep, File, Toss? (www.cof.org/legal)

Grant Close Out and Retention