Re: Funding Continuity Barbara Gray 14 Aug 2003 11:09 EST

At College of Charleston, we use what we call a "risk account." We
require a letter of intent (usually an email or fax) from the funding
agency that documents their intention to make an award for the specific
project for a certain time period and in a certain dollar amount and
then we open the actual grant account that will be used when the award
appears. (We don't temporarily charge expenses to an operating
account--too much work to transfer expenses when the award does come
in.) This is done with the agreement of the department head that the
department will be financially responsible if the grant funds evaporate.
Sometimes agencies are not as clear in their intent letters as we would
like--they'll add something like "subject to agency's receipt of funds".
Then we have to use our best judgement about probability that the funds
really will materialize and how conservative we should be in our
spending before the award arrives. This has worked well for us. Here's
what our opertational policy actually says:

"Risk Accounts - Occasionally, a PI will be notified that a proposal has
been recommended for funding but funding has not yet been officially
approved or funding has been approved but the official award paperwork
is delayed. In such cases, with proper documentation of the anticipated
award, the PI may request establishment of a “risk account” so that work
on the project may begin. PIs who wish to request a risk account should
consult with ORGA. If ORGA determines that a risk account is necessary
or desirable, the department chair/unit director must first agree to
accept responsibility for any expenditures incurred and/or any
uncancellable obligations if for any reason funding does not materialize."

In your third scenario, we would likely be using the same grant account
number over the multiple year period. If the hold-up is on the sponsor's
end and we knew the incremental award was coming, we would allow the PI
to charge necessary expenditures to the existing account--even if it
goes in the red. If the problem is a late report, then we be less likely
to allow the expenditures, as that would negate leverage we have for
getting the PI's cooperation in reporting..

Bill Schulze wrote:

>We are seeking to bolster local streamlining efforts by gathering a
>collection best practices concerning how universities deal with funding
>continuity.  By funding continuity, I mean the ways that institutions
>provide for recurring situations such as:
>
>1) You know a grant will have an effective date of October 1st, but you
>need to exercise your 90-day preaward option and get graduate assistants on
>the payroll & pay their tuition in mid August...
>
>2) An agreement is only partially executed, and the fully executed copy is
>not likely to arrive until after the start date - and the PI needs to order
>equipment, hire students, etc....
>
>3) The current year of a multi-year award is coming to an end, but the
>assured continuation funding has not yet arrived - and employment documents
>need to be processed to that project staff & students will continue to get
>paid...
>
>4) A federal cooperative agreement for millions of dollars approved for
>multiple projects is in place, but because of continuing resolutions,
>initial obligations are insufficient to cover needed encumbrances - but the
>research is expected to go forward....
>
>These are but a few of the real world situations we encounter, and I'm sure
>they are familiar to you as well.  In situations such as this the risk
>factor is almost zero, and we deal with them - but our current process is
>cumbersome and inefficient.  I am aware that institutions use various
>techniques such as setting up unbillable accounts, temporary accounts,
>internal overrides, etc., but it would really help our efforts if I had a
>good selection of best practices.
>
>So if any of you all have policies or procedures you could share via
>comment, attached files, or URL references, I would really appreciate
>it.... I also will be happy to make what I collect available to others who
>may be interested...
>
>Bill
>
>****************************************
>William E. Schulze, EdD
>Director of Sponsored Programs
>University of Nevada, Las Vegas
>Phone (702) 895-1357
>Fax (702) 895-0986
>xxxxxx@ccmail.nevada.edu
>****************************************
>
>
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--
==================================================================
Barbara H. Gray, Director
Office of Research & Grants Administration
College of Charleston
66 George Street
Charleston, SC  29424
Campus Location:  407-G Bell Bldg.
Office: 843.953.5673  Desk: 843.953.5885  Fax:  843.953.6577
e-mail:  xxxxxx@cofc.edu   URL: http://www.orga.cofc.edu/
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