SPENDING BEFORE THE OFFICIAL AWARD IS RECEIVED
Currently there are only two acceptable ways to spend before the official award is received and an account is officially set up. The first way is to request pre-award spending for no more than 90 days before the start of an award because the sponsor has assured the PI or Project Director that the award will be issued XX days in the future and the sponsor allows preaward spending. The second way is to request hold account status so spending can start on an award that has been awarded but the paperwork has not been issued for some reason. In both instances, an IPAS Form (available on our web site) must be properly completed and approved. As part of that process, the Division of Grant and Contract Accounting (DGCA) requires that a backup account be provided in the event that the funding does not come through as planned. If funding does not come through, the departmental back up account WILL BE charged for all unfunded expenses.
SPENDING AFTER THE OFFICIAL AWARD IS RECEIVED
Normally, once an award is made by the state they will honor its terms and pay for all services or work provided under the award as if it was a binding contract. However, we are a part of the state and in hard times these terms and conditions might not be treated on an arms length basis. The state can terminate a program or award in the middle for various reasons including lack of funding. If that happens on your award, please notify your DGCA accountant immediately and cease all expenditures on the award.
REQUESTING FUNDING BEFORE ACTUAL SPENDING ON AN AWARD
Program people at the state might ask our PIs and Project Directors to bill in advance for services or work that hasn't been done in order to obligate their agency's funding and protect it from a potential cut. You should be aware that only the DGCA (and the grants offices in Newark and Camden) is authorized to bill sponsors. If we are asked to advance bill, we will make sure that the University is not misleading the state financial people (versus the program people who asked you to advance bill) into assuming we have actually spent the money. Please keep in mind that almost all of the University's grants and contracts with the state are cost reimbursable grants and contracts - in short, we must incur the expenses before we are allowed to bill the sponsor. On the other hand, if your award is one of the rare fixed price contracts with periodic (perhaps quarterly) payments, we could advance bill at the state's request without a concern of misleading the state financial people.
STATE AGENCIES AT RISK
Of special note is that the Governor is suggesting that funding for the New Jersey State Council on the Arts will be drastically cut and that the Commission on Science and Technology might be eliminated entirely. Obviously, all awards (current active awards and new or continuation or in the pipeline proposals/awards) from these sources need to be treated very carefully so the University does not have an additional shortfall to cover beyond whatever budget cuts are determined in the final budget.
Your cooperation in remaining vigilant on the above matters is most appreciated.