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If principal investigators want to obtain a project number before the sponsored project is awarded or before it is completely processed, they must establish an advance or preaward account.

All costs incurred on an advance or preaward project must meet the same criteria as costs incurred after the award arrives. Department must pay any unfunded costs. In addiiton, principal invetigators must fulfill education and compliance requirements before charging costs.

OMB Circular A110 requires grantees to notify the funding agency of developments that have a significant impact on the award-supported activities. The University must also notify them in the case of problems, delays, or adverse conditions which materially impair the ability to meet the objectives of the award. In addition, some sponsors may not approve expenses planned for the future budget period. Before incurring costs not covered in a current statement of work, principal investigators and department administrators must review the agreements carefully to determine whether prior approval is necessary. Sponsored Projects Administration can assist. Federal award under expanded authority typically allow costs to be moved between budget periods without agency approval. However, department remains responsible if continuaions or supplemental awards are not funded. These types of costs should be minimized because the University cannot bill for such costs until official award is made by the agency.

Advance Account:

Charges incurred prior to the start date of a contract are usually unallowable charges because they are made before the date agreed upon in the final agreement. However sometimes the agreement language is still being negotiated when the anticipated start date of the project arrives. To avoid delaying the research, the principal investigator can request an advance account to begin the project. The charges on this advance account will be allowable because once the agreement is signed, the start date on the agreement will coincide with the effective date of the advance account.

Preaward Account:

Some sponsors allow charges to be incurred prior to the start date of the agreement. Federal sponsors usually permit charges up to 90 days before the start date and many businesses funding clinical trials allow start-up costs on those projects. In these cases, the principal investigator can request a preaward account. Even though the charges are incurred outside the dates of the final agreement, they are allowable because sponsor policy permits them. In lieu of obtaining a preaward or advance account, it may be allowable to charge the expenses to a department account and transfer them later. However, the expenses must be moved within the cost transfer deadlines.

Principal investigators have legitimate reasons for needing preaward or advance accounts, for charging costs on these accounts, and for incurring costs planned for future budget periods. However, these accounts and costs put the University at risk because they may not be covered by sponsored agreements and the sponsors could refuse to pay the costs. This policy outlines internal controls and procedures that ensure accountability over the funds, meet required sponsor regulations, and provide documentation for audits.

• Establishing and Charging Preaward or Advance Accounts

• Preaward or Advance Account Request Form

Subject	Contact	Phone	Fax/Email
Primary Contact	Pamela Webb	612-624-1648	pwebb@umn.edu

Advance Account

An account established before the award process has been completed in order to facilitate administrative establishment of the project.

Advance Account Costs

Costs incurred on an advance account.

Preaward Account

An account established to begin working on a project before the project start date.

Preaward Costs

Costs incurred prior to the effective date of an award or a budget period.

Sponsored Project

An externally funded activity that is governed by specific terms and conditions. Sponsored projects must be separately budgeted and accounted for subject to terms of the sponsoring organization. Sponsored projects may include grants, contracts, and cooperative agreements for research, training, and other public service activities.

Start-Up Costs

Costs that are necessary to start an industry-sponsored clinical trial, such as salary expenses for developing the IRB application, protocol development costs, and recruitment costs.

Principal Investigator

• Initiates the process of obtaining a preaward or advance project.
• Provides resolution to aged preaward or advance project, if appropriate.
• Initiates the process for documenting and charging accelerated costs.

Unit Administrator

• Processes the documents and monitors preaward expenses.
• Assists the principal investigator in reviewing aged preaward and advance projects.

Certified Approver

• Ensure that costs incurred before the start date are charged correctly to the preaward or advance project.

Unit Head

• Approves the request and supplies a nonsponsored program number to which expenditures will be charged if charges are unallowable. Provides resolution to aged preaward and advance projects, if appropriate.

Unit Staff

• Monitors expenses on preaward and advance projects.
• Monitors age of these projects.
• Removes unallowable charges.
• Reconciles the preaward / advance project to the final award.

Dean

• Provides general oversight over number and age of preaward and advance projects in area. Provides resolution to aged preaward and advance projects, if appropriate.

Collegiate Staff

• Monitors expenses on preaward and advance projects.
• Monitor age of these projects.

Sponsored Projects Administration (SPA)

• Reviews advance and preaward project requests.
• Verifies that principal investigator has met the PI education requirements.
• Sets up the preaward or advance project.
• Monitor age of preaward and advance projects.
• Initiates closeout process for unfunded preaward and advance projects.
• Reports issues to Oversight, Analysis, and Reporting for resolution.

Sponsored Financial Reporting

• Terminates unfunded preaward and advance projects upon notification from SPA.

There are no appendices for this policy.

There is no FAQ for this policy.

• Administrative Policy: Removing Uncollectible Costs Charged to Sponsored Projects
• Administrative Policy: Processing Internal Accounting Transactions
• Administrative Policy: Effort Certification

Amended:

July 2008 - Policy updated to reflect rollout of Enterprise Financial System (EFS) and CUFS retirement. Procedures for this policy consolidated into one procedure.

Amended:

July 2004 - Added sponsor grant/award number and the dates of the budget period affected by accelerated work to the accelerated work form.

Amended:

October 2003 - Clarified definitions, permitted use of preaward account for start-up costs on industry-sponsored clinical trials, clarified oversight responsibilities, clarified effective date of preaward and advance accounts.

Amended:

July 2001 - Retitled policy to clarify scope of policy. Reorganized policy statement to differentiate between charging costs for new projects and continuing projects.

Effective:

March 1999

Supercedes:

Guidelines for Establishing Accounts for Pending Awards, July 1996.

To obtain a copy of a historical policy, e-mail the U Policy Librarian at policy@umn.edu or call 612-624-4372.