Sponsored Program Compliance
14. Monitoring Project Spending
From Start to Finish
Two common situations in which the allocability of an expense will be critically reviewed are those where expenses are incurred before the start of a project period, and those where expenses are incurred just before the end of a project period. During the project period, while the work of the project is being carried out, sponsors may also look closely at the RATE of project expenditures. When a new award is assured but the funding is delayed, it may be appropriate to open a "contingent GR Financial Activity Object (FAO) [account]."
It is NOT appropriate to charge these costs to other restricted or sponsored FAOs, even if you intend to transfer them later. You should also avoid charging these to non-sponsored FAOs and then transferring them later.
By opening a "contingent GR FAO," you will not have to transfer expenses onto a new FAO when funds arrive, thus avoiding both administrative burden and audit exposure. Opening a "contingent GR FAO" requires the identification of a departmental unrestricted FAO or "guarantee FAO," in the event the sponsored funds do not arrive.
During the project period, PI's can jeopardize their funding when spending EITHER accelerates at an unanticipated rate OR falls significantly behind project projections.
While there may be very good programmatic reasons for accelerated or decelerated levels of spending, it is ALWAYS a good idea to keep the sponsor - both the programmatic and the administrative officers - informed in these situations. In the case of Federal contracts, there are specific requirements for notification when the total cost will be greater or substantially less than the estimated cost, OR at the point when expenditures will exceed 75% of the total project cost.
Finally, it may be necessary and appropriate to purchase equipment, supplies or other expenses late in the project period. In these cases, it is particularly important to document the allowability—and particularly the allocability—of the expense.
Expenses incurred after the project period has ended are unallowable, unless the award, or the Uniform Guidance (U.G.)., contained provisions permitting them to be charged (e.g. the U.G. does allow non-federal entities to charge before close-out for the costs of publication or sharing of research results if the costs are not incurred during the period of performance of the Federal award). If you have work left to do on a project, but have run out of time, request a no-cost extension. This request must be coordinated through the Office of Research and Project Administration (ORPA).
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