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What is an advanced account, and when do I need one?
You have been notified that your proposal will be funded.
Congratulations! Now, you begin planning in earnest and need to hire
personnel or order equipment to move forward when your project officially
begins on the award start date.
Frequently, the sponsor will notify you that the project will be
funded but the award is delayed while the terms and conditions of the award
are negotiated. In the meantime, the start date may pass.
An "advanced account" allows you to charge expenses to your pending award
appropriately, so that you don't have to move the expenses later. An
advanced account works just like a normal sponsored project account.
Background and authority for pre-award costs
Many sponsors allow you to start spending prior to the award start date. Expenses incurred prior to the start date are called “pre-award costs.” The federal government defines pre-award costs as “those incurred prior to the effective date of the federal award directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of work.”
Such costs are allowable only to the extent that they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency.
The university is allowed pre-award expenditures up to 90 days in advance of the grant award for most federal sponsors on most types of grants. This flexibility is derived from the Research Terms and Conditions (RTC), which implements the Office of Management and Budget (OMB) Uniform Guidance. The Prior Approval Matrix (Appendix A) provides guidance for the primary federal funding agencies.
In some cases, pre-award costs are not allowed, and any costs incurred prior to the award start date must be covered from other non-grant accounts.
When should I request an advanced account?
- Your award is in the final stages of negotiation and the start date is confirmed.
- You are anticipating a continuing year of funding but the award is delayed.
- Funding is anticipated from a federal source and you need to make pre-award expenditures up to 90 days before the start date.
How do I request an advanced account?
The principal investigator, project director, or fiscal officer completes an
Advanced Account Document in Kuali.
- An unrestricted, non-contract, or non-grant account must be
provided. This account will be used to cover any costs that are not allowed
after the award is finalized.
- Each school or unit sets their routing and approval requirements.
Upon receiving your request, the Office of Research Administration will make
sure that all research risk approvals are in place and will set up the
account. Accounts will be set up for an entire budget period.
What else do I need to know?
Auditors give cost transfers close scrutiny. By setting up an advanced account, your department and the Office of Research Administration can ensure the proper fiscal management of the expenditures. According to IU Policy SPA-11-017 Requests for Advanced Accounts, failure to request an advanced account may result in disapproval of cost transfers for expenditures made prior to the full execution of the award.
Contracts do not allow pre-award expenditures and should never receive an advanced account for that purpose.