Federal regulations now mandate that all grants be closed within one year after the period of performance ends, as established by the Gone Act of 2016. This requirement ensures that federal agencies manage grant funds efficiently and report closure progress to oversight bodies such as the Office of Management and Budget (OMB) and Congress.
Key Insights
- The Gone Act of 2016 requires federal grant accounts to be fully closed within one fiscal year after the grant’s period of performance ends.
- OMB collects and reports on each agency’s closure progress annually, including highlighting the 30 oldest unclosed grants per agency for Congressional review.
- Timely grant closure reduces processing costs, eliminates bank fees related to dormant accounts, and frees up funds for future grant opportunities.
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The Gone Act of 2016 established the requirement that at the end of the period of performance, all grants had to be closed within one fiscal year. What do we mean by closure? That means that the grant officer on the federal level can submit to the bank that the bank account for that grant is attached to, and that the bank account can be closed out. It can be zeroed out.
Agencies must close expired grants within one year of the final report. Periodic reporting to OMB on progress is required, and OMB compiles an annual summary for Congress, including the 30 oldest unclosed grants per agency. That way, Congress in the subcommittee hearings and meetings can have direct attention to those grants that were not properly closed out.
Why is this important? Well, wasted processing costs for third-party in-house systems are still continuing for grants not properly closed out. Data capacity and dormancy fees issues with banks, and idle funds that could support new grants. Closing out a grant within one year after the end period of performance ensures greater efficiency of federal funds and ensures that everyone is an effective steward of this grant funding.