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Charging Sponsored Costs Outside the Award Period

 Investigators may seek to charge sponsored programs costs outside the award period under certain specific circumstances. Some sponsors allow OSP the authority to allow “pre-award” expenditures to be made within 90 days of the official start date (i.e., notice of grant award has been received) to allow the project to proceed efficiently. If allowed, this flexibility can be very useful (e.g., cases where the optimal or natural start of activities (start of a school term) closely precedes the award start date, or if items need to be purchased prior to beginning field research). OSP requires justification to authorize pre-award expenditures before the official start date.

 In a second scenario, an award is expected but delays in receipt of the agreement from the Sponsor may impede award set-up by the anticipated/requested start date. This is applicable to both new and continuing awards.  In this case, a “forward funding” account can be established to allow expenditures to begin at the anticipated award start date. 

 In a third situation, OSP has not yet received the official notice of grant award from a sponsor that allows pre-award expenditures. A forward funding account could be established to accommodate expenditures within 90 days of the anticipated start-date, if allowed by sponsor.

 Under most circumstances, unless there is a forward funding chart string created, expenses incurred in support of the project and charged to non-sponsored chart string cannot be transferred to the award chart string at a later date.[1]

 Forward funding may not be used for subcontract expenditures, unless explicitly authorized by the Office of Research.

 Procedure

1.      PI, in collaboration with departmental administration and OSP, assesses the potential risk associated with establishing a forward funding account and/or requesting preaward authorization.

Contact your research administrator before completing the forward funding account request form.  He or she will help you determine if the sponsor will pay for costs incurred before the start date of the award and whether there is any risk regarding the award start date.

• How “firm” is the proposal “start date”?  The principal investigator may assume the start date will be the same as the date listed on the proposal, but the sponsor may not process the award in a timely manner. If the grant or contract provided to OSP has a later start date than the one proposed or expected and the sponsor will not backdate the contract, any pre-award account charges will be unallowable unless specifically approved by the sponsor.
• What kind of information has the sponsor provided?  Official notice of grant award, or informal email or phone call?
• Note - If the sponsor’s policy states that the start date of the project is the date of final signature on an agreement, forward funding will not be allowed as the date of the authorizing signature is unknown. In such cases, spending cannot begin until the award or contract is fully executed.

Similar caution applies to forward funding accounts for subcontracts where a University principal investigator is subcontracted by another organization. Necessary approvals must be obtained at the appropriate level of the award (e.g., sponsoring organization and/or the prime sponsor).

 2.      Principal Investigator (PI) requests an account

If it is reasonable to proceed, the PI prepares the Request for Forward Funding Chartstring form for approval by their department Chair and Dean. This form provides OSP with the information needed to review the request and also informs requestors of their obligations if an award is not made or the sponsor disallows expenditures; it also serves as reminder of the University’s employment obligations.

The PI sends the completed form with budget details to their research administrator in OSP (113 Bowne Hall) for review and if approved, account setup.

 3.      OSP ensures that criteria for establishing the account are met

The research administrator will review the forward funding request to ensure that all necessary information is provided and confirm that all University and Sponsor regulatory requirements associated with the award have been fulfilled, e.g.,

• Complete and signed Forward Funding Request form, documenting the department’s and dean’s acceptance of forward-funded expenditures in the event that the award is not made or the start date is changed;
• Relevant regulatory approvals (human or animal subjects, etc.) confirmed and compared to proposal;
• Signed OSP checklist submitted, along with other required documents (e.g., COI and IPA) for all personnel; and

• For federal awards, confirm that the forward-funding account start date is within the preaward period allowed by the sponsor (e.g., 90d before the requested start date).

 The forward funded budget and associated line-item amounts will be developed based on the proportion of the amount requested to the total award, excluding any subcontract expenditures.  If other expenditure plans are to be used, the PI is to communicate this on the forward funding request form. 

The forward funding chartstring request will not be processed until all outstanding compliance obligations for the award are fulfilled.

 4.      OSP notifies PI and others of chartstring setup

The research administrator will submit the request to the Office of Sponsored Accounting; once the chartstring has been created, OSP will notify the principal investigator and departmental administrator of the chart string and project numbers.

 The effective date of a forward funding chartstring will be the date indicated on the forward funding request form, provided that the date requested is within the requested project period or allowable pre-award period. 

5.      PI charges expenses.

The PI is responsible for assuring that all expenditures to the forward funding chartstring meet the following criteria,[2] which are applicable to all sponsored programs accounts: 

• Allocable: The cost must have a direct benefit and be directly attributable to the project or activity being performed.
• Allowable: Costs must be allowed by sponsor and University policies.
• Reasonable and necessary for the performance of the project.
• Expenses must be charged in accordance with the sponsor's regulations (including the certification of effort) and the authorized or submitted budget.
• Preaward costs on federal projects must be incurred within the timeframe allowed by the sponsor. Most, but not all, federal agencies allow institutions to approve preaward costs within 90 days of the award's effective date. Costs incurred before this 90-day period require specific agency approval.
• Transfers of costs from one budget period to the next solely to cover cost overruns are rarely allowable. If there are questions, contact your research administrator.

 Appropriate facilities and administrative costs will be charged on forward funding accounts.

 Employment Issues

The University’s employment obligations apply to sponsored programs activities and PIs are responsible for complying with these requirements. The employment of faculty, staff or students to work on research projects creates certain legal obligations for the University and its agents, i.e., principal investigators. These obligations are applicable to the forward funding period as well as the term of the sponsored award; consequently no one, including graduate student(s), undergraduate student(s) or technical staff, can perform any work on the project until all employment requirements are completed (i.e., they are officially hired).

 Under the federal Immigration Reform and Control Act of 1986, all employees must complete Form I-9, the “Employment Eligibility Verification Form” issued by the Immigration and Naturalization Service within three days of their first day of work.  International faculty, staff and students must complete this form at the Slutzker Center for International Services at 310 Walnut Place.  All other employees must complete this form at the Office of Human Resources at Skytop or at either of the HR satellite offices at 121 Bowne Hall or 210 Steele Hall.

New York State labor law sets requirements for the timely payment of wages to employees.  Weekly employees must be paid no later than one week following the end of the pay period.  Salaried employees are paid semi-monthly and must be paid by the end of the pay period in which the work is performed. 

 Failure to comply with any of these legal obligations exposes the University to fines and penalties.

 If faculty, staff or graduate assistants are to be eligible for fringe benefits such as health insurance, dental insurance or group life coverage, enrollment must occur within the first 31 days of employment.  In order for Human Resources to verify eligibility these employees must appear as active in the payroll system.  Failure to enroll during this period will cause coverage to be denied until the following open enrollment period.

 6.      Monitor Forward Funding account.

Expenditures:

·        PI and departmental staff review financial reports to ensure that forward funding or preaward expenditures meet the criteria outlined in item #5.

·        If spending appears to be excessive, departmental administrators should stop processing expenditures and refer the matter to the PI, Chair and OSP.

 Age

·        OSP research administrators monitor the age of forward funding chartstrings and follow-up on the awards status with the sponsor or PI.  OSP will also facilitate closing of unawarded projects, as necessary.

 7.      Upon award start date or finalization, the Office of Sponsored Accounting reviews the forward funding expenditures to the award.

• If no award is issued: the Office of Sponsored Accounting will transfer the charges to the non-sponsored chartstring provided on the Request for Forward Funding Chartstring form. The Office of Sponsored Accounting will terminate the forward funding account upon notification from OSP.
• If some or all forward funding account charges are not allowed by the sponsor:  The Office of Sponsored Accounting will transfer the charge to the non-sponsored chartstring provided on the Request for Forward Funding Chartstring Form.