Use of Change/Close Commitment Forms on Sponsored Program Accounts

        New requisitions/purchase orders are the appropriate mechanism used to establish a non-payroll direct commitment on a sponsored program account.  This is true whenever a separate grant account is required and whether the award is new or a continuation. 

        Recently the DGCA has fielded a number of questions on the use of the Change/Close Commitment Forms.  These forms are a simplified way of dealing with closing a purchase order or making changes in the PO where the vendor does not have to be informed.  These forms should be used on sponsored program accounts only to reduce or close an outstanding commitment of $250 or less on an open purchase order.  To close a commitment of more than $250, a change order form (use the requisition/purchase order form) must be used so the vendor is properly notified that the purchase order is closed.  

        While Change/Close Commitment Forms can be used on non-sponsored program accounts to transfer an outstanding commitment to another non-sponsored program account, they can not be used to transfer an outstanding commitment to a sponsored program account.  The reasons for this are quite basic. 

        First, sponsored programs are restricted accounts set up to closely document, control and report on the funds that our sponsors provide for their specific projects or programs.  Change/Close Commitment Forms do not provide an acceptable audit trail to explain or justify why a change (transfer) is taking place.  Nor do they provide sufficient assurances or documentation that the charge to the new account is appropriate for that particular sponsor's project.  Also, these forms are discarded after processing, eliminating the documentation and creating a gap in the audit trail for the change.  On the other hand, if you are just closing a commitment, this is not a concern. 

        Second, from a practical point of view, the desired results are often not achieved.  This is because the majority of changes are accompanied by the closing of the source account from which the transferred funds come.  Due to the nature of the processing required, these combinations of changes and closings are often processed in the wrong sequence, i.e., the closing is processed before the change.  This results in the change being rejected, which causes additional work to complete the transaction.

        As a result, Change/Close Commitment Form use on sponsored program accounts should be limited to only closing commitments of $250 or less.  Thank you for your help in this matter.  

Instructions

Form  

         

Ronald S. Thompson, Assistant Controller             Phone 732-445-0755
Rutgers, The State University of New Jersey          Fax     732-445-1180
Division of Grant and Contract Accounting
65 Davidson Road                 Web site http://www.rci.rutgers.edu/~ilc
Piscataway, NJ 08854-5603     E-mail Thompson@Grantadm.Rutgers.Edu