Under certain circumstances, Principal Investigators (PIs) may request authorization to spend funds in support of a sponsored project in advance of receiving a notice of an award from a sponsor. Pre-award spending is permitted under Uniform Guidance (2 CFR §200.458) for federal awards and spending must comply with sponsor-specific terms and conditions. Pre-award spending for federal awards is limited to 90 days prior to the award start date unless the sponsor provides written approval for a longer period. Pre-award costs for all awards must be:

• Necessary for timely and successful project performance.
• Allowable under the anticipated award terms.
• Allocable and reasonable in relation to the project scope.

Pre-Award Spending Accounts are the preferred method of spending grant funds when an award is imminent; charging grant-related expenditures to a departmental or discretionary account is not advised. The Office of Sponsored Programs (OSP) will only authorize pre-award spending and set up a Pre-Award Spending Account if the following are satisfied:

1. An essential need to advance or commit funds prior to the receipt of an award;
2. Successful completion of required research compliance training by the PI and all key personnel participating on the project;
3. Certification by the Principal Investigator that the level of effort, scope, and objectives of the project as proposed or negotiated will not change;
4. Certification by the PI and appropriate Department Chair/Head and Dean/Vice President that any monetary loss to the campus resulting from the sponsor's failure to make the award, or from costs incurred but disallowed by the sponsor, shall be the fiscal responsibility of that unit or school; and
5. Receipt of a firm commitment by an authorized representative of the sponsor to the OSP that an award is forthcoming.

Risks, Liabilities, and Limitations

The risks, liabilities, and limitations associated with pre-award spending must be carefully considered prior to requesting authorization to spend funds in advance of receiving the award.

Risks: Whenever the University authorizes pre-award spending, the University is risking monetary loss. The PI and respective Department Chair/Head and Dean/Vice President certify that other funding must be available to cover the risk of a delayed budget period start date, costs disallowed by the sponsor upon award, or failure of the sponsor to make an award as anticipated.

Liabilities: Special care must be exercised in assessing the impact of pre-award spending on the legal obligations of the University prior to requesting or approving a Pre-Award Spending Account. The University must consider the impact of not having a fully executed grant or contract agreement on its legal obligations regarding intellectual property rights, subject injury, indemnification, etc.

Limitations: A sponsor's policies, the terms and conditions of the anticipated award, and campus policies and practices determine whether or not pre-award spending or pre-award activities are allowable. Restrictions differ depending on the funding agency and the type of award anticipated (i.e., grant, cooperative agreement, or contract).

Requesting a Pre-Award Spending Account

Contact your OSP Proposal Specialist if you need to request a Pre-Award Spending Account. A record will be routed for approval via the Cayuse Sponsored Projects module, requiring the PI to certify that the level of effort, scope and objectives of the project as proposed or negotiated will not change.

The Department Chair/Head and the Dean/Vice President must each electronically approve the Cayuse Pre-Award Spending entry, certifying those units will provide funding for any losses incurred as a consequence of the approval of this request (see “Risks” above).

Once the Cayuse Pre-Award Spending record is completed and signed, it will be routed to the Post-Award Office in the Division of Finance for final approval. Post-Award will analyze the request to verify all administrative requirements listed in Section A of this policy have been met. If such requirements have been adequately met, Post-Award will then approve the Pre-Award Spending Request and forward it to the relevant Post-Award accountant for account setup and fund number assignment. Post-Award may decide to issue partial funding as part of the Pre-Award Spending Account decision. If the account is approved, the Pre-Award Office will initiate a follow-up review three months after account setup if the award has not yet been formally issued by that time. The Pre-Award Office, Post-Award office, PI, and PI's Dean's Office will work together to evaluate the ongoing financial risk and determine whether continued pre-award spending still remains appropriate. If the financial risk is determined to be significant at that time, the parties may collectively decide to end pre-award spending priviliges. 

Once an award is finalized, pre-award expenditures are analyzed by the Post-Award Office, PI, and Departmental Administrator to ensure they are allowable per the Notice of Award, within budget and budget period timeframe, and adhere to award terms and conditions. Any disallowed costs are the responsibility of the PI, PI's Department Chair/Head, and/or PI's Vice President or Dean per bullet 4 above.