Quick reference guide: Balance netting at closeout
Projects which have subcodes established under a parent code will follow the institutional netting procedure below to determine the final distribution of award/budget/plan across all project codes.
Submission of all required closeout documents by the Closeout Docs Due Date is necessary for the netting process to occur. Our ability to net balances may be lost when closeout deadlines are missed. Refer to the Specific Situations section below for guidance related to addressing non-standard resolution of overdrafts prior to submitting closeout documents.
Netting Procedure
The balances across the project are taken into consideration, based on Rebudget Class, to cover any overdrafts. PAFM will net overdraft balances using the procedures provided below. Allocation will follow one of the below paths, based on the WBSE end type and BFR.
The process outlined below assumes timely submission of all required closeout documents related to the project.
| Project Period End | Budget Period End | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
At project period end, PAFM will distribute available award funds to cover overdrafts, if allowed by Rebudget Class, in the following order:
*Priority based on ascending numeric order by WBSE & BFR | At budget period end for projects where WBSEs are closing, (carryforward is not automatic), PAFM will distribute available award funds to cover overdrafts, if allowed by Rebudget Class, in the following order:
Subcodes not owned by the same 10-digit parent BFR WILL NOT be covered by surplus funds. | ||||||||||||||||||||
Example of allocation at project end
| Example of allocation at project end
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The project period end and budget period end netting procedures shown above are intended to give a general outline of how balance netting works. Please see below for further details regarding more specific situations.
Important Note: Project netting requests identified in comments on the Closeout Tasklist will not be considered. All non-standard overdraft resolutions must be resolved prior to closeout document submission.
Specific Situations
Overdrafts that should be covered by Parent
At budget period end, for subcodes in overdraft that are owned by a BFR other than the BFR of the parent code, but whose overdraft the parent BFR wants to cover, a rebudget request must be completed.
Rebudget requests must be completed and approved prior to submitting closeout documents in order to reduce or eliminate the overdraft amount.
Overdrafts that should not be covered by Parent
Contact your closeout reviewing office (ORA for MNMC/SOM/SON; CAMT for PAMC/Campus) prior to submitting closeout documents for guidance on reducing or eliminating overdrafts that the parent does not wish to cover.
Subcodes closing in advance of Parent
For subcodes closing before the parent code, netting will not occur until closeout documents for all project WBSEs are completed. Balance netting cannot occur until overall project financial reporting is in process. If WBSE closing early ends with an overdraft balance, the backstop code will be debited to cover the overspend. Once all closeout documents are fully approved, netting procedure will be applied by PAFM during final financial reporting based on standard procedures. If a situation requires special handling, rebudgets should be completed by the department prior to submission of closeout documents.
- See Guidance for closing subcodes prior to parent WBSE for more information on closing a subcode prior to the parent.
Subcodes with No Plan
For subcodes with a funding basis other than CAP, DT or FP and do not have a plan in SAP, PAFM will follow the standard institutional netting process according to project or budget period end.
For subcodes with the funding basis CAP, DT or FP that do not have a plan in SAP, balance surpluses will not be subject to the netting process. Overdrafts will be covered through the netting process according to project or budget period end.
Subcodes with a Fixed-Price Contract
For subcodes with a fixed-price funding basis where the parent has a cost-reimbursable funding basis, any budget surplus amount on the fixed-price subcode will be reviewed by PAFM and transferred to the cost object identified on the Closeout Tasklist, in accordance with GAP 200.185.
Overdrafts on fixed price subcodes will be written off to the backstop code.