Pre-spending exists when a program has a well-justified and compelling reason to incur costs and has obtained approval to make expenditures in advance of the receipt of funding. Pre-spending requests are generally not approved or appropriate when an award is imminent or an agreement is in-house. For instructions about how to submit a pre-spend change request in InfoEd, view the Change Request: Pre-spending job aid.
Conditions for establishing a pre-spending account
There are three conditions under which an investigator might request the establishment of a pre-spending account:
1) Get a head start on a federal project that is subject to Federal Demonstration Partnership (FDP) terms and conditions
Recipients of awards governed by FDP terms and conditions are allowed to initiate project activities up to 90 days in advance of the official start date indicated on the notice of grant award. Since start-up can be slow, this option provides additional time to get a project up and running and enables investigators to order equipment, hire staff, or begin preliminary work on the project. Recognition of a pre-spend period results in a modification to the project activity start date in the financial system and does not constitute a formal change to the official project period or budget period start date.
* Note: Under normal circumstances, a pre-spending request is not required to establish pre-spending pending the non-competing continuation of an FDP award. However, complex awards with multiple accounts, such as program project and center grants, require a pre-spend request.
2) Begin a project on the designated start date prior to receiving an actual award notice from the sponsor
A funding agency may be unable to provide an award agreement by the official project start date, particularly when funds are being subcontracted from another institution or when agreements are being negotiated with industry or corporate sponsors and it is expected that negotiations will take weeks or months to complete. In some cases, awards may not be finalized until well into the project period. If an investigator chooses to begin a project on the proposed start date, the sponsor has no prohibitions on doing so or incurring invoiceable costs before an award agreement has been fully executed, and there is a departmental endorsement of accepting the financial risk of doing so should an award not materialize, an authorized pre-spending account may be requested. This is an "at risk" account, and the department must provide a non-sponsored financial source to cover the costs should an award not be made.
3) Establish an account for an industry-sponsored clinical trial prior to receipt of initial payment but when all other required components are in place (e.g., subjects meeting study criteria are available).
Note: A Pre-Spend Change Request is required in InfoEd.