Unlike cost-reimbursement arrangements, where expenditures are reimbursed after they are incurred, some granting agencies award fixed price contracts.
When such an award expires, leaving a residual balance in the account, a determination must be made as to whether the remaining funds may be utilized. The decision belongs to the awarding agency, and is often communicated within the terms and conditions of the agreement.
If the remaining balance results from a fixed-price agreement, it is often available for the principal investigator (PI) to spend. In such cases the balance will be transferred to an unrestricted discretionary account in the name of the PI.