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Provisional Sponsored-Project Award Establishment

Policy
Purpose: 

This policy describes the circumstances when the establishment of a provisional account is allowable and outlines the requirements and responsibilities for the departments, centers, and the Office of Research when initiating an award account prior to the receipt of an official award document.

Applies to: 

Principal Investigators (PIs), Deans, Directors, and Chairs

Campus: 
Lawrence
Policy Statement: 

Most sponsored-project awards are received in a timely fashion from the sponsors prior to the initiation of the project. Sometimes there are delays in the receipt of the award document that are beyond the university’s control. Such delays can cause difficulties for the PI in initiating the project, hiring appropriate staff or students, purchasing supplies or equipment, or arranging for travel related to and necessary for the project. Sometimes, extensive delays create unreasonable burdens to meeting project objectives. The Office of Research understands these challenges and will help the PIs, Deans, Directors and Chairs make a risk decision related to establishing a Provisional account prior to receipt of the award document. There are some inherent risks related to beginning work on any project before KU or KUCR has an official document in hand, but these risks are sometimes acceptable when compared with the potential of a delayed award creating additional administrative burdens on both faculty and staff.

Some federal agencies that award grants or cooperative agreements will allow universities to make appropriate and allocable charges to a pending sponsored project up to ninety (90) days in advance of the date stated in the notice of award. When the Office of Research is able to confirm that a federal grant or cooperative agreement is “in process” and the award notice will likely be received soon, the risk for establishing a provisional award account to allow the project a timely start is not very high. However, there is always some minimal risk that the project may not be awarded or that the award date will fall outside of the 90-day pre-award period. Therefore, for federal grants and cooperative agreements, it is required for the administrative department or center to agree in writing to assume responsibility for any charges made to a provisional financial account in the event the award does not materialize as anticipated. (Note: This is not a new aspect of this policy. This requirement has been in place for a number of years.) The Post-Award staff will attempt to confirm that the award is pending with the sponsoring agency prior to approving the provisional account.

Sponsored projects that are awarded with contracts from federal and state governments, or for-profit sponsors pose greater risks than a federal grant when granting a provisional award. There is no 90-day pre-award authority given for such contracts (federal or non-federal). Spending authority and oversight are controlled explicitly through language that is specific to each contract. Unless the contract is in-house and currently under negotiation, it may be very risky to establish a provisional account prior to receipt of the fully-executed award contract. Requests for provisional accounts involving contracts will be carefully considered by the Office of Research and will require complete backing by the department or center in the event the charges fall outside of the contract period or the contract itself does not materialize.

All compliance issues related to a sponsored project must be in place with appropriate approvals prior to granting a provisional award. Compliance approvals for human subjects, research involving animals, conflicts of interest, etc., related to the project must all be current. All training requirements related to Public Health Services financial conflicts of interest (PHS FCOI) must be current, if applicable.

In the event that a provisional financial account is not requested for a sponsored project, but work is initiated that will need to be charged to the sponsored project once an award is made, the department or center will be responsible for making all corrections to charges made to other non-sponsored accounts within ninety (90) days of receipt of the award. Under no circumstances should charges be made to an unrelated federal sponsored-project account while waiting for a new award. If charges must be initiated and the department or center is unwilling to back a provisional financial account, all charges should be made to an unrestricted account and will need to be moved retroactively to the appropriate account at the time of the award. Any charges made to an unrestricted account that are later determined to be outside of the award period or otherwise unallowable, will need to remain on the unrestricted account.

Although there are inherent risks involved in the backing of a provisional financial account for a sponsored project, it is important to acknowledge that establishing a provisional account is frequently less risky than beginning work on a project without funding. Employees should not be “hired” with the expectation of future funding.

Exclusions or Special Circumstances: 

Based on prior university experience, some agencies are considered to present a higher risk of failing to follow through on finalizing awards after initial positive notifications to Principal Investigators. Some State of Kansas agencies may fall into this category. Requests for the establishment of a provisional financial account for a sponsored project from a sponsor considered to be higher risk may require additional approvals from the Vice Chancellor for Research. The Post-Award Office at the Office of Research should be contacted for further information.

Consequences: 

The establishment of a provisional financial sponsored-project account with required financial backing from the administrative department/center will require the administrative unit to cover any charges made against the provisional account in the event an award is not received or the charges are outside of the project period or otherwise unallowable on the project. In the event that work is initiated without a provisional account, any charges made to an unrelated project will be disallowed and will require the department/center to cover them with unrestricted funds. Any charges made to an unrestricted account will need to be retroactively changed to the correct sponsored-project account within ninety (90) days of when the award is established. This may require significant administrative effort if it involves retroactive changes for payroll issues.

Contact: 

Anita Abel, Director
Post-Award Services
785-864-6841
aabel@ku.edu

Approved by: 
Vice Chancellor for Research
Approved on: 
Thursday, October 11, 2012
Effective on: 
Thursday, October 11, 2012
Review Cycle: 
Annual (As Needed)
Definitions: 

Pre-Award Authority: The approval to provide spending authority up to 90 days prior to the authorized begin date for some federal assistance awards (grants or cooperative agreements).

Keywords: 
Provisional, provisional account, provisional award, budget summary, pre-award authority
Review, Approval & Change History: 

Incorporated into written policy format October 1, 2012.
7/22/2013: Updated contact information.
6/16/2014: Updated to reflect accurate title for 'Office of Research'; selected 'Lawrence' for required Campus field; minor formatting updates

Research and Sponsored Projects Category: 
Research and Sponsored Projects

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