How To

Spend before an award is accepted by Stanford.

It is possible to spend before an award is accepted by Stanford if the sponsor authorizes it in writing. This is termed preward spending for grants and preaward costs for contracts. Most federal sponsors allow preaward spending for grants within 90 calendar days prior to the anticipated award start date. Other sponsors limit the dollar amount or do not allow preaward spending. It is rare for contracts to include language allowing preaward spending. Special language must be negotiated. Check the terms and conditions of the specific award for restrictions on preaward spending.

If the sponsor authorizes preaward spending, you must open an early PTA. If the research involves human or animal subjects or stem cells, a protocol must be submitted before early an PTA can be opened. Although you can receive an early PTA, work on animals and humans cannot begin until the protocol is approved.

Preaward spending is done at the PI’s risk.  The sponsor is not obligated to fund the pre-award costs if the project is not funded, and the sponsor's authorization of preaward spending does not guarantee that the PI will receive the award. If the award does not materialize, the PI must cover for the costs from his or her unrestricted funds.

In addition, if the start date of the project is delayed, the award will not cover the costs if they were incurred outside the 90 day period.  

Example 1:

An award is expected in two months and a graduate student is working in this area now and needs to funded. The PI says to charge the student to another project, and then transfer costs when the real award comes in. Is this a problem?

Yes, the student’s effort should not be charged to any project which does not benefit from that effort.   If the student is working in an area that does not relate to the project being charged, then the charge cannot be allocated to that project.  This charge is both unallowable and unallocable, and cannot be approved, even if you intend to transfer the charges later.

What should you do? If the sponsor authorized preaward spending, request open an early PTA. This will require the PI to identify an unrestricted PTA to guarantee payment of the expenses, in case the sponsored project is not awarded.

Example 2:

Anticipated award start date of March 1 is ascertained through communication with the sponsor.

The sponsor authorized preaward spending in writhing 90 days prior to award start date ​January 1. You begin spending.

The sponsor delays the start date to April 1. Now the preaward spending the PI incurred in the month of January is outside the 90 day limit, and the PI is obligated to cover those costs with unrestricted funds.

When it is necessary to request an early PTA, the PI must identify a guarantee PTA with unrestricted funds to cover the costs in the event that the award does not materialize.

If human, animal subjects or stem cells are involved, certification that protocols have been filed for review and that no expenses involving those activities will be incurred until the final protocol approval is granted. Once the award is received, an early PTA becomes the project PTA. 

An early PTAs can be requested in the SeRA system. For detailed instructions see the Sponsored PTA Manager - Dept User Guide and the Sponsored PTA Manager - Early/Extend - Post Award User Guide  here

Do not use another sponsored PTA to fund expenses that you intend to move later. The expenses would be considered both unallowable and unallocable.
It is strongly recommended that preaward or spending in advance of a fully executed award is NOT charged to an unrestricted PTA. Any time charges are transferred onto a sponsored project PTA, as they would be when you have to “clear” early expenses and transfer them onto the proper PTA, careful documentation is required as to the benefit to the new project. Additionally, depending on how the expenses are incurred, the costs could be considered unallowable. The CAS language states: 

The costs of any work project not contractually authorized, whether or not related to performance of a proposed or existing contract, shall be accounted for, to the extent appropriate, in a manner which permits ready separation from the costs of authorized work projects.

It is very difficult to separate cost that benefit a sponsored project from cost in an unrestricted PTA.

Contact

For more information, please contact:

OSR Pre-Award Assignments

Office of Sponsored Research

Research Managment Group

School of Medicine

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