Research Circular No. C.1.
Issued April, 1977
Revised December, 1994        UCSB OFFICE OF RESEARCH
Distribution:
     Deans
     Directors              SPONSORED PROJECTS POLICY
     Department Heads
     Administrative Personnel


POLICY ON EXPENDITURES AGAINST PENDING CONTRACTS AND GRANTS

I.   References

     A.  By-Laws and Standing Orders of The Regents 100.4 (n)

     B.  University of California Contract and Grant Manual, Chapter 6

     C.  Memorandum dated April 14, 1980, as amended August 26, 1980, from 
President Saxon to Chancellors:  Expenditures Against Firm Commitments Under 
Contracts and Grants

II.  Policy

     A.  General Statement

     Under certain limited circumstances, a principal investigator of a 
research, training, or public service project may request permission to spend 
funds in advance of the University's receipt of an anticipated contract or 
grant in support of the project.  The principal investigator must first 
demonstrate that an essential need exists to commit funds in advance of an 
anticipated award.  A firm commitment must then be obtained from the funding 
agency (either a governmental or private non-profit sponsor) that it intends 
to award a contract or grant in support of the project.  Finally, an existing 
source of funds must be identified to cover the risk of a delayed start date 
for the anticipated award, or any other such action by the funding agency that 
results in a loss of anticipated funds.

     B.  Essential Need to Spend Funds in Advance

     The determination of an essential need to spend funds in advance of 
receipt of an award relies primarily on the judgment of a project's principal 
investigator.  Certain circumstances, however, may be taken as instructive 
examples.  Projects anticipating renewal or continuation awards can have an 
essential need to retain experienced project personnel as employees, and thus 
a request may be made to spend salary and fringe benefit funds in advance.  In 
the case of a new project, an essential need might relate to the initiation of 
work by a certain date to meet project objectives, or to the purchase of a 
piece of equipment that may otherwise be unavailable.

     C.  Firm Commitment

     The term "firm commitment" has no legal definition, and may not be taken 
as a binding contract between the University and a sponsor agency.  It only 
serves as an indicator of a sponsor's intent, according to which the 
advisability of assuming the risk of expending funds in advance of an award 
may be assessed.  As stated by the University's Office of General Counsel:  
"The phrase is applicable to situations where University personnel are advised 
by representatives of [sponsor] agencies that a contract or grant will be 
forthcoming, and the only delay is a ministerial one of document processing.  
An agency representative making such a representation must be one who can be 
relied on for such representation."  Accordingly, obtaining a firm commitment 
from a sponsor agency is the responsibility of the Office of Research.  Such a 
commitment can only be given by an authorized agency official, such as a 
Grants Management Officer or Contracting Officer.

     D.  Existing Source of Funds

     Spending funds in advance of the receipt of an award is done solely at 
the University's own risk.  No automatic provision exists to cover losses 
resulting from the failure of a sponsor agency to award all or part of the 
anticipated funds.  To minimize the risk to the University, department chairs, 
ORU directors, and/or Deans endorsing requests to spend in advance of the 
receipt of an award must identify an appropriate source of existing funds 
under their control that can be used to cover any unexpected losses.

III. Procedure

Approval for expenditures against pending contracts and grants is requested on 
OR Form 203, "Request for Approval to Spend Funds" (RAS). 

     A.  Items 1 through 10 of the RAS form and the "Certifications and 
Approvals" are completed by the requesting principal investigator, department 
chair, and Dean, as outlined in the form's instructions, before submitting the 
form to the Office of Research.

     B.  Upon receipt of the completed RAS form, confirmation of a firm 
commitment from the funding agency is obtained by the responsible Contract and 
Grant Officer in the Office of Research.

     C.  Final approval or disapproval of the request is by the Associate Vice 
Chancellor-Research, acting as the Chancellor's designee.

     D.  The  Office of Research notifies the requesting department of 
approval or disapproval of the RAS form, and transmits approved requests to 
the Extramural Funds unit of Accounting and Financial Services.

IV.  Attachments

     A.  OR Form 203, Request for Approval to Spend Funds







James F. Case
Associate Vice Chancellor-Research



cc:  Meta Clow, Administrative Services