Guarantee account set-up follows the same process as a regular award set-up. Setting up an account immediately allows expenditures to be charged to the correct project and therefore limits cost transfers and retroactive personnel actions. The allowability of pre-award costs must be taken into consideration. All standard award documentation requirements, including assurances, must be complete prior to setting up a guarantee account.
NOTE: Schools/departments requesting a guarantee account do so at their own risk. If funding for a project on guarantee does not materialize, or is less than expended, incurred expenses will be transferred to an eligible departmental account.
Allow five (5) business days to complete the majority of requests. Large projects or projects with uncommon costs may require more review time. All requests will be reviewed in the order received and in accordance with major proposal deadlines.
Guarantee accounts may be established for grants as long as the start date in FMS is not before the start date on the grant award notice. Federal accounts that allow pre-award costs are the exception. In the exception cases the FMS project start date (when spending may begin) should be within 90 days of the start date on the Notice of Grant Award.
The following procedure is to be used when requesting the establishment of a guarantee account for contracts and grants for new & renewal projects that have been reviewed & approved by Pre-award. Guarantee requests for After-The-Fact proposals will also require a complete Administrative and Financial packet. Guarantee requests for transfer proposal will also require Transfer In packet.
The responsible business official will submit a written request to the appropriate Sponsored Projects Specialist (SPS) in Pre-award. Emails and facsimiles are accepted. The request should include:
- PI name.
- Project title.
- Sponsor name.
- Estimated beginning and ending dates of the project.
- Anticipated amount of funding to be received.
- The source of funding (i.e., federal, state, local or private).
- Budget pools to be set-up.
- Approvals from the PI and Responsible Department or Business Official.
A complete Review and Approval Form, including all applicable assurances (human subjects, animals, radioactivity, biohazards, etc.), and complete Conflict of Interest Certification forms for all personnel on the project. If there is a potential conflict, the project must be submitted to the RCOI committee for review, and the guarantee account will not be set up until a response is received from the Committee.
And, as with all awards, the Human Subjects Protection training and The Principal Investigator Responsibility training must be completed prior to account setup.
Once all appropriated documentation and information is received, Pre-award will notify Post Award Finance who will set up the guarantee account and notify the department.
It is the department's responsibility to monitor all guarantee accounts closely.
Establishing Expenditure Budgets on Clinical Trial Projects
In order to limit retroactive personnel actions and cost transfers by allowing expenditures to be charged to the correct fund source, an expenditure budget may be established for clinical trial projects prior to receiving the first payment. (Formerly, these projects were established as cash-basis accounts with ‘zero’ budgets.) Schools/departments requesting an expenditure budget on a clinical trial project are guaranteeing coverage. If payments are not received equal to or greater than the expenditure budget established, the expenses incurred that exceed the revenue will be transferred to an eligible account. The use of the “guarantee” account is advisable if the expense will be incurred by the department regardless of a clinical trial receipt.
If effort reports have been certified, expenses may only be transferred to a departmental or discretionary account.
The following procedure is to be used when requesting the establishment of an expenditure budget clinical trial projects:
Upon account setup notification by Post Award Finance (PAF) to the department, the responsible business official will request that an expenditure budget be established up to one-third (1/3) of the total anticipated revenue from the study. The request should include the budget pools to be set up.
These accounts should be monitored closely by the department to ensure that revenue covers or exceeds expenditures.