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

Questions to Consider for the Grant Close Out Process Grant Close Out and Retention • 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?

Questions to Consider for the Grant Close Out Process Grant Close Out and Retention • 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

What documentation is retained in closed grant files? Grant Close Out and Retention • 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)

Retention Grant Close Out and Retention • Document Retention – What to keep? – For how long? • Record Retention Policies • Electronic vs. Paper

Retention Grant Close Out and 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?

Retention: What to Keep Grant Close Out and Retention Permanently? • Governing Documents • Tax Exempt Documents (federal, state, etc.) • IRS Correspondence • Meeting/Board Documents • Year End Financial Statements

Retention: Other documents Grant Close Out and Retention • Bank Statements • IRS Forms 990 • Documents related to investment assets * Keep state and local laws and other regulations in mind.

Retention: Grant Documents Grant Close Out and Retention • 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”

Retention: Grant Documents Grant Close Out and Retention • Grants to public charities (con’t) – Grant award letters – Grantee reports

Retention: Grant Documents Grant Close Out and Retention • 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

Retention: Grant Documents Grant Close Out and Retention • 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

Retention: Grant Documents Grant Close Out and Retention • Grants to Non ‐ US entities – Expenditure Responsibility (same as above) – Equivalency Determination

Retention: Grant Documents Grant Close Out and Retention • 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

Record Retention Policies Grant Close Out and Retention • 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

Electronic vs. Paper Grant Close Out and Retention • Does the IRS mandate particular method? • Best practice?

Resources Grant Close Out and Retention • 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)