Under limited circumstances, Principal Investigators (PIs) may request authorization to spend funds in support of a sponsored project in advance of receiving a notice of an award from a sponsor. Authorization of pre-award spending is contingent upon the following:
- An essential need to advance or commit funds prior to the receipt of an award
- Receipt of a firm commitment by an authorized representative of the sponsor to OSP that an award is forthcoming
Risks, Liabilities, and Limitations
The risks, liabilities, and limitations associated with pre-award spending must be carefully considered prior to requesting authorization to spend funds in advance of receiving the award.
Risks: Whenever the university authorizes pre-award spending, it is risking monetary loss. The PI must identify other funding that must be available to cover the risk of a delayed start date, costs disallowed by the sponsor or failure of the sponsor to make an award as anticipated.
Liabilities: Special care must be exercised in assessing the impact of pre-award spending on the legal obligations of the university prior to requesting or approving pre-award spending. The university must consider the impact of not having a fully executed grant or contract agreement on its legal obligations regarding intellectual property rights, subject injury, indemnification, etc.
Limitations: A sponsor’s policies; the terms and conditions of the anticipated award; and campus policies and practices determine whether pre-award spending or pre-award activities are allowable. Restrictions differ depending on the funding agency and the type of award anticipated (i.e., grant, cooperative agreement, or contract).