Chapter 8 - Award Acceptance & Account Authorization
Acceptance of Awards
When a sponsor determines that it will fund a sponsored program proposal, it will send an award notice to the fiscal agent. If the original award document is sent to you the Principal Investigator, please immediately forward it to Sponsored Programs Administration (SPS).
For awards administered by the Research Foundation (RF), upon receiving an award document containing acceptable terms and conditions, SPS accepts the award on behalf of the Research Foundation, obtains Conflict of Interest approval from the cognizant Dean or Vice President, and authorizes Grants and Contracts Services (GCS) to establish an account to make the awarded funds available to the Principal Investigator for expenditure. GCS establishes an account (called an Award/Project/Task) in the Research Foundation's accounting system known as OASIS. The OASIS system assigns 3 separate numbers - one for the Award, one for the project, and one for the task. All actions and communications by the Principal Investigator relating to the award should thereafter include the RF Award/Project/Task numbers.
For awards administered by UB Foundation Services (UBFS), upon receiving an award document containing acceptable terms and conditions, SPS obtains Conflict of Interest approval, and then advises UBFS to accept the award and to establish a UBFS account for that award. UBFS establishes an account to make the awarded funds available for expenditure. The Principal Investigator should use the UBFS account number in all communications relating to that award.
Negotiation of Awards
If a sponsor offers an award to one of the University's fiscal agents which is not immediately acceptable due to non-conformance with University at Buffalo, SUNY or Research Foundation policy, or an unacceptable budget or work plan, negotiations ensue. These negotiations are always between an authorized representative of the sponsor and either the cognizant Grant and Contract Administrator--if the award is to be administered by either the RF or UBFS--or the authorized representative of one of the University's other fiscal agents. No faculty or staff member is authorized to negotiate the terms and conditions, including funding, of sponsored program awards. The results of any such unauthorized negotiations will not be binding on the University or any of its fiscal agents. Negotiations with sponsors have the following general pattern. Terms and conditions offered by the sponsor are provided to the Principal Investigator for review and are simultaneously reviewed by the cognizant Grant and Contract Administrator. The Principal Investigator is responsible for determining whether the terms which affect program performance, including direct cost funding and reporting requirements, are acceptable. The Administrator is responsible for determining acceptability of all other terms and conditions. If there are terms which are not acceptable, the Principal Investigator and the Administrator develop an acceptable counter offer which is transmitted to the sponsor by the Administrator. The process is repeated, if necessary, until terms and conditions acceptable to both parties are reached. For a description of the issues that are involved in award negotiation, see Chapter 6.
Faculty and staff are not authorized to accept grant awards nor are they empowered to sign binding contracts on behalf of the University or any of its fiscal agents. Formal acceptance of the award must be by the fiscal agent which will be legally responsible for administration of the award. The only parties authorized to legally bind the RF are the University President, currently Dr. John Simpson, the RF Campus Operations Officer, currently Dr. James Willis, the Vice President for Research, currently Dr. Jorge Jose, and Dr. Charles Kaars, Assistant Vice President for Sponsored Programs. The only party authorized to legally bind the UBFS is Mr. Edward P. Schneider, Executive Director.
Advance Expenditure Authorization
The award document is the only legal authority a fiscal agent has to recover from the sponsor those funds which are expended at the direction of the Principal Investigator. The award document gives the fiscal agent such authority only for the awarded project period. Expenditures made prior to the awarded start date or after the awarded termination date of the project will not be paid by the sponsor. Thus, any expenditures made before receipt of the formal award document which conveys official notice of the project start date may place the fiscal agent at financial risk.
There are, however, circumstances when award documents are delayed beyond the time it is necessary to begin the work which will be authorized by the award. When such circumstances arise, the Principal Investigator should request Advance Expenditure Authorization (AEA) from SPS. The request, directed to the cognizant Grant and Contract Administrator, should:
- identify the anticipated award,
- state the need for funds to be advanced to the project,
- allocate the requested funds to appropriate budget categories, and
- indicate the time period for which advance funding is requested (usually a one-month period).
Since funds available for advance expenditure are extremely limited and at risk, such actions will be restricted to amounts which will allow minimal functioning of the project and will generally be approved only for personnel and other essential expenses. Upon request by a Principal Investigator for advance funds, the cognizant Grant & Contract Administrator will complete a Request for At-Risk Account which will include the information above. The Request will be presented to the Assistant Vice President for Sponsored Programs for approval. In some cases, the Request will require the approval of the PIs chairman or dean for “backstopping” (see below).
The following guidelines apply to approval of At-Risk Accounts:
- The cognizant Grant and Contract Administrator must be able to confirm with an authorized representative of the sponsor that the anticipated award will be made for a period of performance that covers the entire period for which advance expenditure authority has been requested and for an amount at least equal to the amount of the requested advance. Such confirmation will ordinarily be in the form of a letter of intent from the sponsor;
- At-risk accounts will be approved for limited periods, generally not more than three months at a time;
- The Principal Investigator must be prepared to terminate the project on short notice, even possibly before the approved at-risk account has been fully expended, if SPS determines that the anticipated award will not be made;
- Expenditures made under an at-risk account must conform to the sponsor's regulations, the fiscal agent's policies and procedures, and the budget submitted to the sponsor;
- At-risk accounts will generally require "backstopping". Before the account is approved, the Principal Investigator or the PI's chairman or dean must identify a source of funds which will reimburse the fiscal agent in the event that the advanced funds have been expended and the anticipated award is not made. Backstopping commitments must be made in writing by the person responsible for the source of funds used as the backstop. Funds ineligible to be used as backstopping include funds appropriated by the state or federal governments, funds in Income Fund Reimbursable Accounts and funds committed to other sponsored programs.
Pre-Award Costs for Federal Grants
Federal grants covered under the Federal Demonstration Partnership (FDP), PHS Expanded Authorities and NSF General Condictions allow the Research Foundation to, at its own risk, incur obligations and expenditures prior to the anticipated start date of an award. Such pre-award costs may generally be incurred within 90 days prior to the beginning date of the award without sponsor prior approval. Pre-award costs incurred more than 90 days prior to the beginning date of the award require written prior approval. Pre-award costs are different from advance expenditure authorizations in that with pre-award costs the start date of the award is changed to an earlier date. (Advance expenditure authorizations start on or after the anticipated start date of the award before the actual award document is received--the award date itself is not changed.)
To be considered acceptable, pre-award costs must be necessary for the conduct of the project, and allowable under the terms and conditions of the pending award. It should be noted that while the federal award allows the RF this flexibility, pre-award costs are incurred at the RF’s risk and generally requires backstopping, as the federal agency is under no obligation to make an award. The guidelines for approval of advance expenditure authorizations apply to pre-award costs.
Principal Investigators wishing to exercise pre-award costs should complete the Federal Grant Change Request form.
Establishing Subawards
Organizations Outside SUNY
When an award is received that involves collaboration with another organization which is not part of the State University of New York, SPS will issue a subcontract to that organization after the prime award is received and accepted by the fiscal agent. If the prime award is from the federal government, SPS is required to conduct a pre-award audit of the subcontractor's proposal. If the prime award is in the form of a basic grant, the pre-award audit may be a simple check by SPS of the reasonableness of the subcontractor's proposed costs. For prime awards made by federal contract, a more thorough pre-award audit of the subcontractor, which could result in an adjustment to the budget, is generally required. In either case, the Principal Investigator must complete and return to SPS a Subaward Selection Justification form. This form must be completed before the subcontract can be issued. The purpose of the form is to document, for audit purposes, what criteria were used by the Principal Investigator to select the subcontractor for inclusion in the prime proposal. To facilitate the audit process, it is important to obtain a complete proposal from the subcontractor at the time of proposal submission to the sponsor (see Chapter 4).
Keep in mind that the University will be responsible for performing all of the work included in a proposal, and that sponsors reserve the right to approve subcontractors. A Principal Investigator should not submit a proposal which includes work which s/he can not perform unless suitable arrangements have been made in advance to subcontract that portion of the work.
Other SUNY Campuses
Since most campuses within the State University of New York utilize the Research Foundation as their fiscal agent, there is no need to establish a subcontract to facilitate a collaborative project involving multiple SUNY campuses. Funding under a prime award to one campus is made available to another SUNY campus by establishing a suballocation (a separate Project/Task) for that campus in the RF’s OASIS accounting system. The collaborating campus’ Principal Investigator is assigned as the Project Manager of the separate Project/Task. The total funds required, including the campus’ approved indirect costs, are established in the budget for the Project/Task. The prime campus does not assess its own indirect costs on the suballocation.
