Under limited circumstances, Principal Investigators may request authorization to spend funds in support of a sponsored project in advance of receiving a notice of an award from a sponsor. The following provides guidance on how spending can be conducted at the pre-award phase.
Federal guidance provides for the allowability of pre-award costs. Some federal agencies may require approval and documentation before any pre-award spending occurs. The Principal Investigator is encouraged to contact ORA for clarification. If pre-award costs are allowed by the sponsor, appropriate expenses can be charged to the fund during the pre-award period.
Generally, the PI may incur pre-award costs 90 calendar days prior to award, or more than 90 calendar days with the prior approval of the federal awarding agency, subject to sponsor guidelines and terms of specific award. The federal awarding agency is under no obligation to reimburse such costs if for any reason the university does not receive an award or if the award is delayed or is less than anticipated and inadequate to cover such costs.
A need for pre-award spending may arise on non-federally-funded projects. The ORA will work with each PI in determining the non-federal sponsors guidelines on pre-award costs. Pre-award spending is authorized at ECU through a project financial guarantee which must be routed and approved in eTRACS, and which provides a source of institutional funds should the sponsor not make the anticipated award.
Pre-Award Spending: 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 ECU authorizes pre-award spending, the Principal Investigator is risking monetary loss. It is the responsibility of the Principal Investigator to ensure other funding is available to cover the risk of a delayed start date, costs disallowed by the sponsor, or failure of the sponsor to make an award as anticipated. The responsibility lies on the Principal Investigator to ensure appropriate steps have been taken to ensure minimal risk.
- Liabilities: Special care must be exercised in assessing the impact of pre-award spending on the legal obligations of ECU prior to requesting or approving. The university must consider the impact of not having a fully executed grant agreement. It is important to note, ORA requires notification from the sponsor in the form of an email or other documentation that supports the likelihood the agreement will be funded.
- Limitations: A sponsor’s policies and the terms and conditions of the anticipated award 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.
Submission and Routing to ORA
Requests for pre-award spending are routed through eTRACS. Administrators and grants managers should complete the project financial guarantee in eTRACS explaining the essential need, the amount of funds, and the period of time requested for pre-award spending. ORA will analyze the request to verify all administrative requirements have been met. If such requirements have been met, ORA will review to determine if supporting documentation from the Sponsor confirms a reasonable assurance an award is forthcoming.