Occasionally, it is necessary to obtain a project number before the award process is completed. Please note it is important to have the PI identify and agree to a non-sponsored funding source before the Advance/Pre-award account is setup. If the contract/award fails to be setup in full, a source of funds is needed to cover advance/pre-award account spending.

Advance Account:

Advance accounts are used when the University has received award paperwork and the project’s start date as listed in the pending award documents is on or after the current date, but award negotiations have not yet been completed.

To avoid delaying the start of the research, the principal investigator can request an advance account to begin the project on or after the start date listed in the draft agreement. The charges on this advance account will be allowable because once the agreement is signed, the start date on the award will coincide with the effective date of the advance account. While typically used for contracts, advance accounts may also be used for grants and cooperative agreements if the need arises.

Pre-award Account:

Some sponsors allow charges to be incurred prior to the start date listed in the agreement. Federal grant sponsors often permit charges up to 90 days before the start date and many businesses funding clinical trials allow start-up costs on their awards. In these cases, the principal investigator can request a pre-award account.

Even though the charges are incurred outside the dates of the final award, they are allowable because sponsor policy permits them. Establishing a pre-award account is the institutional preferred method for charging such costs. In lieu of obtaining a pre-award or advance account, it is allowable to charge the expenses to a departmental account and transfer them to the sponsored project account after it has been finalized. However, if the latter method is used, the expenses must be moved within the cost transfer deadlines.

Pre-award accounts are typically initiated for a period of time not to exceed 90 days.Continued spending beyond that time is appropriate only if there remains a reasonable expectation that an award will be forthcoming.

Risk:

Evaluate the risk involved in establishing an advance account or requesting pre-award authorization. A non-sponsored account will be required as collateral to cover any disallowed expenses or expenses charged if the award is never made. All costs incurred on an advance and pre-award project must meet the same criteria as costs incurred after the award arrived.

Setup:

To obtain either of these accounts, prepare a "pre-award/advance project request form" according to the following procedures:

Establishing and Charging Preaward or Advance Projects

Charging Sponsored Project Costs Outside the Project Period:

The pre-award/advance account request form UM 1716 is located in the forms library:

Monitor:

Expenditures:

  • Effort must be certified at the time it occurs. Thus effort must be certified for work conducted on the project that has the pre-award or advance account.
  • Departmental and collegiate staff must review financial reports to ensure that pre-award expenditures meet the criteria outlined above.
  • Departmental staff must review financial reports to monitor spending levels to make sure expenses don’t exceed non-sponsored collateral account.

Age (the number of days since an account has been active)

  • If the account has been established for more than 90 days, department staff must check the status of the award. Departmental and collegiate staff must use financial reports to monitor the age of the account. If the account has been established for an excessive period of time (e.g., more than 90 days), they must follow up with the sponsor or the principal investigator to ensure that the awarded funds will be forthcoming.
  • Grant administrators in Sponsored Projects Administration periodically monitor the age of pre-award and advance accounts and request explanations or facilitate closing of un-awarded projects.

Upon award start date or finalization, reconcile the pre-award / advance account to the award:

  • If no award is issued: the department is responsible for transferring the charges from the pre-award / advance account onto the nonsponsored account listed on the pre-award / advance account request form. Sponsored Financial Reporting (SFR) will terminate the pre-award / advance account upon notification from SPA. If the department does not transfer the charges in 30 days from the request, SFR will process the charge transfer and charge a fee in accordance with Administrative Policy: Selling Goods and Services to University Departments.
  • If some or all pre-award or advance account charges are not allowed by the sponsor: If the sponsor disallows certain charges and includes that information in its award documents, SPA makes a note on the Notice of Grant Award (NOGA) for the new award. Upon receipt of the award documents, the department is responsible for reviewing the award terms and verifying that all pre-award or advance costs are allowable or ensuring that a special request to the sponsor for approval is initiated. For unallowable costs, the department is responsible for transferring them onto the nonsponsored account listed on the pre-award / advance account request form using the deadlines specified in the Cost Transfer Approval Matrix. SFR handles these unallowable charges in accordance with Administrative Policy:

Moving Uncollectible Costs to Non-Sponsored Programs

  • If award information changes: Occasionally the award will be issued by a different sponsor than that listed on the proposal, or the type of funding used will come from another source. In these cases, the account number may be changed upon award receipt. The department will be responsible for transferring charges from the advance account to the revised chart-string.