This guide outlines the circumstances and administrative steps required when Pre-Award spending is necessary for an award. It outlines the steps to be taken by the Principal Investigator / Project Director (PI/PD), Department Business Administrator (DBA) and the Office of Contracts and Grants (OCG) when there is a need to incur expenditures prior to the official award start date. The awarding agency is under no obligation to reimburse Pre-Award costs if for any reason the University does not receive an award, if the award is delayed or if the award is less than anticipated and inadequate to cover such costs.
When allowed, Pre-Award costs can be incurred for expenditures up to 90 days prior to the award start date. In order to grant approval for Pre-Award spending the following criteria should be met:
- The cost is necessary for efficient and timely performance of the scope of work
- The cost is considered allowable under the potential award if incurred after the award start date
- The sponsor allows Pre-Award spending either as:
- Prior Approval waived from a federal agency that is a FDP member providing an award under expanded authority which allows the university to review and grant approval
- Prior Approval granted in the written terms and conditions of the award
- Prior Approval requested and obtained in writing from the sponsor
- Acknowledgement that expenditures that precede the award are solely at the financial risk of the unit requesting these expenditures (i.e., PI/PD's primary department or college)
Federal awards and federal flow-through awards are governed by the Uniform Guidance, which indicates that Pre-Award costs are allowed with the prior approval of the Federal awarding agency. Under Federal Demonstration Partnership (FDP) programs, some of the federal agencies listed on the FDP website have waived prior approval for some awards. Language in Notice of Awards (NOA) indicating expanded authority, allow the university to know if this waiver can be applied.
Grants awarded by the State of Texas are governed by the Uniform Grant Management Standards which indicates that prior approval or documentation showing evidence for consent is needed prior to incurring specific costs including Pre-Award expenses.
For all other awards, Pre-Award spending is governed by the sponsor’s terms and conditions and for certain awards, prior approval will be waived and approved by the university, unless specifically forbidden by the sponsor in the written terms and conditions.
Pre-Award Cost Procedure
|Complete the Prior-Approval form signed by the PI/PD and submit to OCG. Include the following:
||PI/PD or DBA|
|Obtain a copy of the award document or documentation from the sponsor indicating that an award will be made, in order to determine if allowed||PI/PD and/or OCG|
|If prior approval is needed, request approval from the sponsor||PI/PD and/or OCG||Allow 2-3 days for the sponsor to respond|
|Set-up the cost center and request Pre-Award budget on the record for the award that will be made||OCG||Within 5 business days after sponsor or OCG approval of request|
|Notify PI/PD or DBA when the cost center is ready||OCG Research Administrator||Within 1 business day of setup|
|Complete full award setup after a Notice of Award is received from the sponsor||OCG Research Administrator||Within 5 business days of received award or up to 3 business days prior to the official award start date|
|If the award is not issued, remove the expenses to a department’s IDC or cost center provided||DBA and/or OCG Research Administrator||Within 30 days of official notice from sponsor that award will not be funded|