The Univsersity of Arizona

Estimated Unobligated Balances

How to Calculate your Estimated Unobligated Balance

Often Sponsors request Grant Holders to report on their estimated unobligated balance; that is, the estimated amount of unspent funds at the end of the current budget year (BY). These requests often come 45-60 days prior to the end of the budget period, which requires Grant Holders to project their spending for the next two months based on their current budget and spending burn rate. Below is the language from the NIH Grants Policy Statement.

8.1.1.1 Carryover of Unobligated Balances from One Budget Period to Any Subsequent Budget Period

Grantees should be aware that there is a difference between unliquidated obligations and unobligated balances. Unliquidated obligations are commitments of the recipient and are considered to be obligations and, therefore, should not be reported as unobligated balances.

The NoA will include a term and condition to indicate the disposition of unobligated balances. The term and condition will state whether the grantee has automatic carryover authority, or if prior approval is required by the NIH awarding IC. Note the authority to automatically carry over unobligated balances includes the authority to carryover from one competitive segment to another.

Automatic carryover of unobligated balances applies to all awards except centers (P50, P60, P30, other), cooperative agreements (U), Kirschstein-NRSA institutional research training grants (T), non-Fast Track Phase I SBIR and STTR awards (R43 and R41), clinical trials (regardless of activity code), and awards to individuals. For these grants, carryover of unobligated balances requires NIH awarding IC prior approval unless otherwise noted in the NoA. Other awards may be excluded from this authority through a special term or condition in the NoA.

For awards under SNAP (see Administrative Requirements—Monitoring—Reporting—Streamlined Non-Competing Award Process for applicability), funds are automatically carried over to the subsequent budget period. However, the grantee will be required to indicate, as part of the grant's progress report, whether any estimated unobligated balance (including prior-year carryover) is expected to be greater than 25 percent of the current year's total approved budget. The total approved budget amount includes current year and any carryover from prior years of the project period. If the unobligated balance is greater than 25 percent of the total approved budget, the grantee must provide an explanation and indicate plans for expenditure of those funds within the current budget year.

For awards that require an annual FFR, the amount to be automatically carried over must be specified under item 12, "Remarks."

For both SNAP and non-SNAP, when a grantee reports a balance of unobligated funds in excess of 25 percent of the total amount awarded for the budget period, the GMO will review the circumstances resulting in the balance to ensure that these funds are necessary to complete the project, and may request additional information from the grantee, including a revised budget, as part of the review.

If the GMO determines that some or all of the unobligated funds are not necessary to complete the project, the GMO may restrict the grantee's authority to automatically carry over unobligated balances in the future, use the balance to reduce or offset NIH funding for a subsequent budget period, or use a combination of these actions. The GMO also may indicate whether the balance may be carried forward to a budget period other than the succeeding one. The GMO's decision about the disposition of the reported unobligated balance will be reflected in the terms and conditions of the NoA.

All Federal agencies are required by PL 101-510 to close fixed year appropriation accounts and cancel any remaining balances by September 30 of the fifth fiscal year after the year of availability. In order for the NIH to meet its obligation to close these accounts and cancel any remaining balances by September 30, grantees must report disbursements on the quarterly cash transaction report (using the FFR) no later than June 30 of the fifth fiscal year after the year of availability. At the end of five years, the funds are cancelled and returned to the Treasury. This provision limits the availability of funds for carryover.