Research and Sponsored Projects Manual (RSP)

Effective: 2/17/1987

Revised: 11/1/2005

RSP 410: Project Spending Prior to Receipt of an Award Notice

Purpose

To define the process and financial risk associated with spending on a sponsored account prior to the receipt of an award notice

Sources

United States. Office of Management and Budget. OMB Circular A-21 (revised), Cost Principles for Educational Institutions

Office for Research and Sponsored Projects Administration

Specific applicable agency provisions or regulations

Policy

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At-Risk Accounts

Normally, sponsored project accounts will not be established until the award notice has been received from the sponsor.

An at-risk account may be established for project spending, before the award notice is received, if the following conditions exist:

A. The principal investigator (PI) satisfactorily addresses the following factors in the written request to establish an at-risk account:

1. low financial risk is demonstrated (i.e., the sponsor has given the PI and Office for Research and Sponsored Projects Administration (ORSPA) reasonable assurance that an award will be made on or near the proposed start date)
2. a start date for the at-risk account is specified:
   

   Note:

   At-risk accounts are established for a period of 90 days based on the official start date specified within the proposal or the sponsor’s proposed start date. If the expenditures on the at-risk account that occur prior to the official project start date specified on the award notice are not reimbursable by the sponsor, financial liability to the PI, the department, and the college is incurred when:

3. 1. the project is funded, but the start date specified on the sponsor’s award notice is later than the start date specified for the at-risk account

      and

   2. the project is not funded

3. the projected budget for the at-risk account is not more that 25 percent of the proposed annual budget or revised budget

   and

4. a guaranteed nonsponsored account (agency/org) is designated to cover any posted expenses. It will also be used to cover the actual expenses in the event the project is not funded.

B. ORSPA concurs that the risk is reasonable.

Any expenditure on an at-risk account that is not allowable under federal, university, or sponsor regulations will be transferred to a nonsponsored account.

Cross-Reference

For information about proposal processing, see RSP 501, “Establishment of a Sponsored Project Account.”

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