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Policy And Procedure For The Establishment of Temporary Accounts
Preamble When a grant or contract award is received and accepted by the University, a unique restricted fund account is set up for management of income and expenditures related to the grant or contract project. In order to maintain control over expenditures related to but prior to the receipt of an award notice, it may be advantageous to set up an account prior to receipt of the award document, especially in order to meet payroll requirements for a project. The account that is set up in the absence of an award document is known as a "temporary account".
A responsible investigator, department and school are identified when a restricted fund account is set up. Consistent with policies for other types of accounts, this policy will require that the responsible department or school reimburse the University for expenditures charged against a University account that are in excess of income received and credited to that account.
This policy sets forth the conditions under which approval will be given for issuance and maintenance of a temporary account number. The policy is intended to standardize and streamline the request and review process, as well as minimize the risk to a department or school of incurring expenses for which it may need to reimburse the University. A form is provided which will solicit the required information for account set-up, responsibility, and guarantee for reimbursement.
The objectives of this policy are (1) to set forth the information necessary to initiate the establishment of a temporary account, and to identify alternate sources of funding to support the account and (2) to provide a standardized request process to meet the needs of the Principal Investigators, to expedite request review, and to satisfy the guarantee requirement of the Institution.
This policy applies to all requests for temporary accounts for Sponsored Programs to support research, service, or training for new projects and new years of continuing projects.
The Office of Research and Development (ORD) is charged with approval of requests for temporary accounts. ORD will approve establishment of a temporary account number in the absence of an award document when required proposal and guarantee documentation is on file in ORD, and upon consideration on a case-by-case basis, of the probability of receiving an award document and receiving payment from the sponsor. Temporary accounts may be set up for a budget period not longer than one year.
A. To request a temporary account when an executed award document has not been received the following information must be on file in ORD, or be submitted to ORD:
- A routed proposal for the budget period for which the temporary account is proposed.
- A complete final copy of the application submitted to prospective sponsor.
- The form entitled "Preaward Spending Request Form" completed and signed.
- When available, additional documentation from the agency regarding its intent to fund the proposed project.
ORD reserves the right to disapprove the account request if any of the above-listed documentation is not in ORD files.
B. The "Guarantee Account" cited on the form must be a solvent, University revolving fund (02-3 type) account. This account will be used as described in paragraph IV.E.
C. The account request will be reviewed and information validated by ORD. Review of the request will include consideration of the probability of receiving an award document and receiving payment from the sponsor for the project, and conversely, the University's and unit's potential risk associated with charging expenditures against the account. If approved, the account request will be signed on behalf of ORD and sent to the Office of Financial Services for account assignment. If the account request is not approved, the principal investigator and unit administrator will be so notified by ORD.
D. The Office of Financial Services will permit expenses to be charged to the account but such expenses will not be allowed to exceed the amount of the proposal budget. Payroll expenses will be limited to the amount proposed for salary in the proposal budget.
E. Accounts will be allowed to remain in a temporary status no longer than six (6) months except at the discretion of ORD upon review of the account on a case-by-case basis. If an executed award document is not received during the six (6) month period, the account may be frozen and all expenses transferred to the guarantee account cited on the account request form.
ORD will notify the principal investigator and unit administrator upon initiating review of the temporary account and, when appropriate, will elicit their assistance in obtaining the missing award document from the sponsor. If in the judgment of ORD the account should be closed due to lack of award document, lack of income to the account, or other factors, ORD will so notify, in writing, the principal investigator, the unit administrator and the Manager of the Restricted Funds Accounting (RFA) section of the Office of Financial Services.
Upon notification, RFA will review the guarantee account for solvency. If the guarantee account is no longer solvent, the unit administrator will be asked to provide another account number in accordance with standard procedures for account close-out. RFA will coordinate with the Quality Assurance section of the Office of Financial Services to transfer expenses from the temporary account to the guarantee account and close the temporary account.