After the Grant is Over: Grant Close Out and Retention

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1 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

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

3 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?

4 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

5 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)

6 Retention Document Retention What to keep? For how long? Record Retention Policies Electronic vs. Paper

7 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?

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

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

10 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

11 Retention: Grant Documents Grants to public charities (con t) Grant award letters Grantee reports

12 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

13 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

14 Retention: Grant Documents Grants to Non US entities Expenditure Responsibility (same as above) Equivalency Determination

15 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

16 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

17 Electronic vs. Paper Does the IRS mandate particular method? Best practice?

18 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? (