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Policy number: 10.13

Policy section: Research

Revised Date: December 16, 2019

1. Definitions

Definitions of capitalized terms are set forth in Appendix A.

2. Policy Statement

In the absence of a fully executed Award, Advance Expenditure Authorization is required to initiate work on a Sponsored Project and to authorize Subrecipients to begin work. The Research Handbook specifies requirements and procedures for obtaining Advanced Expenditure Authorization. Advance Expenditure Authorization allows: (a) the timely start-up or uninterrupted continuation of Sponsored Projects at the University before a fully executed Award or amendment is received; and (b) payment of ongoing Sponsored Project costs, either by the Sponsor on a cost reimbursement basis or by the University, with subsequent reimbursement by the Sponsor.

3. Purpose

This purpose of this policy is to establish safeguards to enable full reimbursement to the University for Sponsored Project costs. Adherence to these safeguards limit University liability for work performed by the University without a contract, including limiting incurrence of obligations to make payments to nonemployees and subcontractors.

4. Applicability

This policy is applicable to all Sponsored Projects that are approved for Funding, incrementally funded, or extended and awaiting a final Award or Award modification. Advance Expenditure Authorization provides Principal Investigators/Project Directors with an opportunity to initiate Sponsored Projects and begin incurring associated expenses prior to acceptance of an Award by the Office of Research and Graduate Studies and the Office of Grant and Contract Accounting. It also allows Principal Investigators/Project Directors to continue to incur expenses while waiting for incremental Funding or an extension of the Award end date. This process eliminates the need to charge unrelated resources and create Cost Transfers.

5. Approval of Advance Expenditures

1. Approval of a request to incur Pre-Award Costs or Advance Expenditures will be for a limited period, initial period of 3 months which may be extended for no more than three additional months, and is subject to the following conditions:
   1. The appropriate Dean of the school or college, department Chair or Director of a center, institute, or division has approved the request for Pre-Award Costs or Advance Expenditures;
   2. There is a reasonable expressed need by the Principal Investigator/Project Director to incur costs prior to the proposed start date or prior to receipt of the executed Award or amendment;
   3. The need to start or continue the Sponsored Project justifies the risk that the University may take in approving the Pre-Award Costs or Advance Expenditures;
   4. The Sponsored Project Proposal has been approved by Associate Vice President for Research, Principal Investigator/Project Director, and by the appropriate Dean, Chair or Director. As part of the Proposal approval, the internal forms (e.g. budget, financial conflict of interest) must be on file with the Office of Research and Graduate Studies;
   5. The Sponsor has assured the University, by providing credible assurance from a responsible Sponsor official, that the signed Award, continuation or extension will be made shortly;
   6. If the request is for a Pre-Award Project, verification has been obtained that the Sponsor allows payment of Pre-Award Costs with Award Funding;
   7. Required training and conflict of interest disclosures have been completed; and
   8. Any required compliance approvals have been obtained from University boards, committees and officers, such as the Institutional Animal Care and Use Committee, the Institutional Review Board and the Radiation Safety Officer. See University Policy 10.9, Animal Care and Use, University Policy 10.10, Human Subjects in Research, and University Policies and procedures governing laboratory safety.
2. All costs incurred under an Advance Expenditure Authorization must be in accordance with the terms and conditions of the anticipated Award and must be included in the approved budget.
3. By requesting and accepting an Advance Expenditure Authorization on behalf of a Principal Investigator/Project Director, the school, college, department, division, center, or institute assumes the financial risk in the event the Award is not made or is not accepted, or if the terms of the Award deem certain expenditures to be unallowable. The Office of Research and Graduate Studies will use its best efforts to finalize an Award, but cannot guarantee the successful outcome of any Award negotiation.

6. Roles and Responsibilities: Principal Investigator/Project Director

The Principal Investigator/Project Director is responsible for:

1. completing training and disclosures required by University Policy 10.1, Sponsored Projects and Activities;
2. confirming that graduate students, post-doctoral fellows, and research staff operating under their supervision complete Responsible Conduct of Research Training and other training programs as required;
3. providing documentation that Financial Conflict of Interest disclosure forms have been submitted and reviewed and, if necessary, any potential conflicts have been reduced, eliminated or otherwise managed for all individuals who have a responsibility for the conduct, design, or reporting related to the Sponsored Project;
4. working with the Office of Research and Graduate Studies to ensure that all necessary regulatory documents are in place prior to initiating an Advance Expenditure Authorization;
5. initiating an Advance Expenditure Request by completing the Pre-Award Form and signing to acknowledge the risk involved and agreeing to fund the expenses if an agreement is not executed or excludes any portion of the incurred expenses; and
6. ensuring that expenditures are routed through Grant and Contract Accounting and are reasonable, allocable and allowable for the specific Sponsored Project.

7. Roles and Responsibilities: Deans, Associate Deans, Assistant Deans, Department Chairs, Directors and Financial Business Managers

The Deans, Associate Deans, Assistant Deans, Department Chairs, Directors and Financial Business Managers are responsible for approving the Pre-Award Form to acknowledge the risk involved and agreeing to fund the expenses if an Award is not executed or excludes any portion of the incurred expenses.

8. Roles and Responsibilities: Office of Research and Graduate Studies

The Office of Research and Graduate Studies is responsible for:

1. documenting that Pre-Award Costs are allowed by the Sponsor and obtaining assurance that the Award, continuation or extension will be made;
2. documenting that internal approvals have been received and that all required compliance approvals have been obtained;
3. reviewing and approving or rejecting requests for Advance Expenditure Authorization; and
4. authorizing Grant and Contract Accounting to set up the Pre-Award Project and accept Advance Expenditures.

9. Roles and Responsibilities: Office of Grant and Contract Accounting

The Office of Grant and Contract Accounting is responsible for:

1. establishing Pre-Award Projects based on an executed and approved Advance Expenditure Authorization; and
2. screening expenditures to ensure that costs are allowable and ensuring that expenditures are categorized by the proper account code.

10. Related University Policies, Procedures, and Guidelines

• University Policy 10.1, Sponsored Research and Activities
• University Policy 10.9, Animal Care and Use Policy
• University Policy 10.10, Human Subjects in Research
• University Policy 10.12, Sponsored Project Cost Transfers
• Research Handbook

Appendix A: Definitions

"Advance Expenditures” is generally synonymous with “Pre-Award Costs” except that the term “Advance Expenditures” is generally used in connection with Contracts and “Pre-Award Costs” is generally used in connection with Grants.

“Advance Expenditure Authorization” means the documented authorization to incur Pre-Award Costs or Advance Expenditures which provides for alternative Funding resources in the event that an Award is not received or accepted by the University.

"Award" means a Grant, subgrant, Contract, subcontract, or Cooperative Agreement that provides for Funding.

"Contract" means a legally enforceable agreement between the University and a Sponsor that provides Funding when a primary purpose is delivery to the Sponsor of property or services for the benefit of the Sponsor, in addition to the research, educational, or service benefit to the University.

"Cooperative Agreement" means a legally enforceable agreement between the University and a Sponsor that provides Funding when substantial interaction between the Sponsor and the University is anticipated during the performance of the Sponsored Project.

“Cost Transfer” means the reassignment of a cost to a Sponsored Project after the cost was initially charged to another Sponsored Project or non-Sponsored Project resource. Also included are reassignments of costs from one Sponsored Project to another Sponsored Project or to a non-Sponsored Project resource. Cost Transfers include reassignments of salary, wages, and other direct costs. Reassignment of salaries and wages affecting a Sponsored Project are covered by Policy 10.15, Sponsored Project Effort Reporting.

“Effort” means the time spent on Sponsored Projects and all other activities for which an individual is compensated by the University. See University Policy 10.15, Sponsored Project Effort Reporting.

Funding” means financial support for a Sponsored Project, including money, property, services, or anything of value in lieu of money.

"Grant" means a legally enforceable agreement between the University and a Sponsor that provides Funding when:

1. the Sponsor has no expectation of delivery of a specific product or service other than a final written report;
2. no substantial interaction between the Sponsor and the University during performance is anticipated; and
3. the agreement contains general terms and conditions that stipulate a period of performance and minimal reporting requirements.

“Pre-Award Costs” means Sponsored Project costs incurred prior to receipt and execution of a new Award or incurred on an existing Sponsored Project while awaiting incremental Funding or a no-cost extension of the end date of an Award. The term “Pre-Award Costs” is generally synonymous with “Advance Expenditures” except that the term “Advance Expenditures” is generally used in connection with Contracts and “Pre-Award Costs” is generally used in connection with Grants.

“Pre-Award Project” means a project established for use prior to the beginning of an Award or prior to the University’s receipt of a fully executed Award. The Pre-Award Project number will become the permanent project number when the Award is effective and no cost transfers will be required, necessary, or allowed. A “Pre-Award Project” is also referred to as an “At-Risk Project.”

“Pre-Award Spending Period” means the period allowed by certain Sponsors prior to the official Sponsored Project start date during which costs can be incurred and considered allowable – normally a 90 day period.

"Principal Investigator/Project Director” means the individual solely responsible for technical conduct of a Sponsored Project, technical contact with the Sponsor, expenditure of Sponsored Project Funding, and fulfillment of technical performance and reporting obligations under an Award. "Principal Investigator” (PI) includes an individual designated in an Award as "Project Director" (PD), when performing the functions of a Principal Investigator, or other individuals performing the functions of a Principal Investigator. For the period of the Award, the Principal Investigator/Project Director must be a full-time employee (staff, tenured or, tenure track faculty, Research Professor, Research Associate Professor, Research Assistant Professor, or, if approved by the Provost or his or her designee, a non-tenure track, non-tenure eligible faculty member) appointed pursuant to University Policy 2.3, Faculty Ranks, Academic Titles, and Voting Rights.

“Proposal” means the document submitted to a Sponsor requesting Funding for a Sponsored Project which includes, without limitation, (i) Financial Obligations, Regulatory Obligations, Reporting Obligations or Accounting Obligations, as described under “Sponsored Projects”, (ii) a Statement of Work and (iii) a budget.

“Research Handbook” is a document maintained by the Office of Research and Graduate Studies specifying current procedures and requirements for the proposal, acceptance, execution, and oversight of Sponsored Projects.

"Sponsor” means any external entity that provides Funding to the University. Sponsors may be (i) governmental agencies (for example, federal, state or local governments, or their administrative organizations); (ii) nonprofit organizations (for example, universities, nonprofit corporations, foundations, or associations); (iii) for profit organizations (for example, corporations, partnerships, sole proprietorships, and other business entities); or (iv) individuals.

"Sponsored Projects” means all projects, programs, research, training, public service and other activities that receive external Funding through Grants to the University or through Contracts or Cooperative Agreements between the University and a Sponsor, where one or more of the following obligations applies:

1. Financial Obligation. The University is required to comply with conditions imposed when a Sponsor awards Funding for the performance of services or delivery of products described in a Statement of Work;
2. Regulatory Obligation. The University is required to comply with Sponsor regulations.
3. Reporting Obligation. The University is required to provide to the Sponsor technical performance reports or regulatory or administrative reports; or
4. Accounting Obligation. The University is required to establish a separate accounting record of Sponsored Project expenditures to demonstrate allowability of costs, to maintain financial accountability, to make financial reports to the Sponsor, and to preserve appropriate records for audit.

“Statement of Work” means the component of a Proposal or an Award that describes the specific work to be undertaken and the products that will be produced by the Sponsored Project.

“Subaward” (also referred to as subgrant if the prime award is a Grant, subcontract if the prime award is a Contract or subagreement) means a formal, secondary agreement between the University and a qualified organization for the performance of a substantive portion of the program funded under an Award. The term also includes subawards made by a Subrecipient to a lower tier Subrecipient.

“Subrecipient” means the legal entity to which a Subaward is made and which is accountable to the University for the use of the Funding provided in carrying out a portion of the University’s programmatic Effort under a Sponsored Project. The term may include institutions of higher education, other non-profit organizations, for-profit organizations and foreign or international organizations (such as agencies of the United Nations), if approved by the Sponsor.

“University Policies” means, for the purposes of this policy, all University Policies included in the University Policy Manual and all other procedures, guidelines, and requirements of the Office of Research and Graduate Studies and the Office of Grant and Contract Accounting included in the Research Handbook, and the procedures, guidelines, and requirements of all University colleges, schools, departments, centers, institutes, and divisions.

Revised: December 16, 2019

Adopted: January 15, 2015