I. PURPOSE

The purpose of this policy is to set forth the policy for Pre-Award Spending. Pre-Award Spending Accounts are accounts set up prior to the receipt of an official executed Notice of Award/contract or delay in receiving a Notice of Award.

II. ACCOUNTABILITY

The Vice Chancellor for Research shall ensure compliance with this policy. The Deans, Associate Research Deans, and the respective Department Chair/Unit head shall implement this policy.

III. POLICY

A. Background and Contingencies

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 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 in Cayuse 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.

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).

C. Submission and Routing of a Pre-Award Spending Request

Requests for pre-award spending are routed in the Cayuse grants management system. Instructions can be obtained from your OSP Proposal Specialist.

The PI should complete the Cayuse Pre-Award Spending Request and route for approval, thereby certifying 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 OSP for final approval. OSP 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, OSP will then approve the Pre-Award Spending Request and forward it to the relevant post-award accountant for account setup and fund number assignment. OSP may decide to issue partial funding as part of the Pre-Award Spending Account decision.

Once an award is finalized, pre-award expenditures are analyzed by OSP, PI, and Departmental Administrator to ensure they are allowable, within budget and budget period timeframe, and adhere to award terms and conditions. Any disallowed costs are the responsibility of the PI, Department Chair/Head, and/or Vice President or Dean per section A4 above.