Pre-spending Accounts

Pre-spending exists when a program needs to begin to incur costs in order to accomplish its goals in a timely fashion and has obtained approval to make expenditures in advance of the receipt of funding.  There are three conditions under which an investigator might request the establishment of a pre-spending account:
  1. To 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 have the option to begin 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.
  2. To begin a project on the designated start date but 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 contracts are being negotiated with industrial sponsors. In extreme cases, awards may not be finalized until well into the project period. If an investigator wants to begin a project on time and has departmental endorsement, an authorized pre-spending account can be established. In this case, pre-spending may be requested on or after the official project start date but before the award is received and finalized.
  3. To establish an account for an industry-sponsored clinical trial prior to receipt of an initial check but when all other required components are in place (e.g. subjects meeting study criteria are available).
When an investigator has been notified that an FDP project has been approved for funding within the next 90 days or that a late-arriving award has a designated start date, there is very little financial risk involved with establishing a pre-spending account.  Investigators are encouraged to take advantage of this option as utilizing a pre-spending account provides better management information and eliminates cost transfers. In order to establish a pre-spending account, a request should be submitted via the Electronic Proposal Submission System (ESPR).
Note: Under normal circumstances, a pre-spending request is not required in order to establish pre-spending pending the non-competing continuation of an FDP award.