Office of Sponsored Research - 400.06 - Pre-Award Spending

Purpose

This operating standard protects the University from fraud and misuse of funds by defining the instances where Pre-Award spending may be allowable. It also establishes the Office of Sponsored Research (OSR) as the authorized University office responsible for establishing Pre-Award spending.

Policy Statement

With proper approval, project costs may be incurred before the receipt of an award and the start date of an award, provided each of the following criteria are met:

  • Costs are underwritten by the department administrating the award
  • Costs are deemed necessary to the establishment of the project
  • Costs meet the allowability requirements of 2 CFR §200 - Subpart E and 2 CFR §200.209, as well as specific sponsor regulations

Once these criteria are met and the necessary approvals obtained, OSR establishes a Pre-Award spending Project ID for essential expenditures. In the event that the award is not funded the department is responsible for any costs incurred.

Upon receiving official notification that an award is forthcoming, a Pre-Award spending Project ID is validated for a set period of 90 days but is not assigned a budget. All charges are processed through OSR's pre-audit unit before approval of essential expenditures.

When the actual award notification is received from the sponsor by OSR, the Project ID is established in ConnectCarolina. If the award notification is not received within a 90 day period, the department must request an extension or OSR will send a summary of expenditures to be paid from departmental accounts. Since some award notifications may take longer than 90 days to arrive, the timing of notifying departments of expenditures are adjusted accordingly.

Pre-Award spending Project IDs may be established using one of the following methods:

I. Financial Guarantee

When a sponsor agrees to fund an award, but the award notice has not been received and officially approved by the University, the PI can initiate the project and incur necessary set-up costs by generating a financial guarantee request in Research Administration Management System and eSubmission (RAMSeS), obtaining the proper electronic signatures, and submitting it to OSR. Assurances of funding (such as a letter of intent from the funding agency) and other applicable supporting documentation must accompany the request in RAMSeS.

By approving the Financial Guarantee, the dean, director, or department head agrees to underwrite all expenses on behalf of the applicable unit or department, should the award be rescinded for any reason.

II. Prior Approvals

Projects may require sponsor approval for expenditures in advance of award receipt.

Most Federal sponsors allow the University, through expanded authorities, to incur Pre-Award costs 90 days before the start date of the award. Requests under expanded authorities still require OSR approval. Other sponsors may require formal requests submitted to the sponsor, requiring OSR submission and approval, to request Pre-Award spending.

It is important to be aware of the sponsor’s prior approval requirements before taking action.

Exclusions

  • No Pre-Award funds can be expended for any research involving human and animal subjects until OSR has received the certification of Institutional Review Board (IRB) and/or Institutional Animal Care and Use Committee (IACUC) approval. Pre-Award spending in other areas of research (those that do not involve human and animal subjects) is allowed.
  • A Pre-Award spending Project ID may be extended by 90 days through a written request. However, this may require a second Financial Guarantee approved by a higher administrative level.
  • Non-personnel transactions will not be approved after the expiration of the Financial Guarantee period unless an award notification has been received or an extension granted.

Related Requirements

Unit Policies, Standards, & Procedures

Contact Information

For questions regarding this operating standard and its related procedure, please contact ResAdminOSR@unc.edu.

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant.
OSR Staff assignments are found in RAMSeS or on the OSR website.

History

05/15/2018 Revised to coincide with the release of the new OSR Website.
09/13/2011 Revised to reflect the requirement of Dean's signature on Project Financial Guarantee. The OSR Advisory Committee recommended this change due to the nature of the financial risk involved.

The operating standards in the Office of Sponsored Research Operating Standards & Procedures Manual supersede any OSR operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

Details

Article ID: 132303
Created
Thu 4/8/21 9:28 PM
Modified
Fri 4/23/21 9:44 AM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
02/19/2021 9:18 AM
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Distinguished Professor
Last Review
Date on which the most recent document review was completed.
02/19/2021 9:18 AM
Last Revised
Date on which the most recent changes to this document were approved.
05/15/2019 12:00 AM
Origination
Date on which the original version of this document was first made official.
07/01/2008 12:00 AM