Handbook of Business Procedures
17.3. ORIGINATION OF AWARDS AND CREDIT POLICY
Project directors, in cooperation with an administrative official from the Office of Sponsored Projects (OSP), prepare a proposal for submission to a sponsor. Some proposals are made at the request of the funding agency, while others are unsolicited. A proposal includes a description of the project, the project director's resume, and a proposed budget. Negotiation with the sponsor can involve indirect cost rates, how indirect cost is applied, reporting requirements, scope of the project, invoicing requirements, and budget limitations. When an agreement between the sponsor and the University is reached, a final award document is signed by both parties.
The award is sent to Sponsored Projects Award Administration for establishment and administration of the accounts. An accountant reviews the award for special conditions, reporting requirements, cost sharing agreements, budgets, rules and regulations, allowable cost principles, and expiration date. Each of these items is noted on the front of the award notice, and the account numbers are assigned. Copies of the completed Notices of Award are then emailed to the project director, departmental contact, and other individuals if requested. If an email is returned as undeliverable, a hard copy is mailed.
Information about funding of contracts and grants is forthcoming.
C. Credit Procedures
1. General Information
The Principal Investigator (PI) of a sponsored project may request authorization to spend or commit a limited amount of funds during a defined period prior to the receipt of a fully negotiated award, receipt of incremental funds, or approval of a no-cost extension request. The need for such spending authority, also referred to as "credit," arises due to one of the following circumstances:
a. Pre-award Costs
Pre-award spending occurs outside of the normal period of performance of the project. Some federal sponsors permit spending 90 days prior to the start of the performance period for an award. This authorization comes as a provision of awards granted under the terms of the Federal Demonstration Partnership (FDP). Researchers who have an immediate need for funds may request credit for pre-award spending if the grant is confirmed to fall under FDP provisions and there is documentation that the award is forthcoming.
b. Credit During or After Period of Performance
Authorization may be granted to spend funds when a project award notification is pending or after the stated period of performance if a request is being processed for additional time or funding. Many sponsors fund projects on an incremental basis, meaning that authorization to spend funds for the entire performance period is not provided at the beginning of the project. Researchers may request credit for these awards if they require immediate access to additional funding due to project needs and funds for the next increment of the award are not yet available.
c. Funds Remaining at Project End (Spend Available)
Principal Investigators may request authorization to spend funds remaining at the end of a project's performance period if additional work remains to be completed and a request is being made for additional time and/or funding from the sponsor.
2. Requesting Credit
When the Principal Investigator (PI) determines that credit is needed on a sponsored project, the PI must send a Request for Credit to the Office of Sponsored Projects (OSP). An informational copy must also be sent to the PI's Associate Dean for Research or designee and the business officer of the PI's college, department, or organized research unit. The Request for Credit should include the following information:
- A brief explanation outlining the reasons for the credit request and the proposed period of time for the credit to be available. Credit may be requested for a maximum of six (6) months.
- A budget outlining the use of the funds under the credit authorization, including any associated indirect costs.
- Documentation from the sponsor that the award has been made and is forthcoming, and/or a University account guaranteeing the funds.
- Documentation from the sponsor must be obtained from someone who is authorized to make such a commitment. Not all program officials are authorized to do so.
- If a University account number is provided to guarantee the funds, approval must be provided from someone with manual signature authority on the account. The requesting college, school, or unit must have funding available to offset any credit funds expended in the event that an award or additional sponsor funds are not received or approved by the sponsor.
- The following statement must be submitted with each credit request: "The principal investigator is aware that should this award not be made, he/she is responsible for all charges incurred."
A subsequent request for an extension of credit to a maximum of three (3) months and/or an increase in the amount of credit may be submitted using the process outlined above. However, he total time requested may not exceed nine (9) months.
3. Approval Procedure
Upon review, the Office of Sponsored Projects (OSP) will send a recommendation to the Associate Vice President that credit be granted based on the documentation provided in the request.
The Associate Vice President will review the credit request and assess the risk of the request to the university's overall cash flow and the sponsor's payment history. The Associate Vice President may determine that additional review of the sponsor's financial position is needed if the credit request is in excess of $25,000 for a project funded by a for-profit firm.
Upon approval, the Associate Vice President will route an approved request to Sponsored Projects Award Administration for implementation. OSP will also be notified about the approval, and OSP will send an email notification to the person requesting credit indicating that the request has been approved and is being funded by Sponsored Projects Award Administration.
ASponsored Projects Award Administration accountant will establish credit as specified in the approved credit request and file the request in the appropriate contract folder. When an award is received from the sponsor, OSP will send a Notice of Award to Sponsored Projects Award Administration so that the account information will reflect the approved budget and fiscal reporting deadlines may be designated.