920_1a

Effective Date: 9/1/82
Expiration Date: On file w/Manuals' Coordinator
Supersedes: No. 920.1; dated 7/1/75

UCLA STANDARD PROCEDURE

Number 920.1

EXPENDITURE OR COMMITMENT OF FUNDS AGAINST CONTRACTS AND GRANTS PRIOR TO RECEIPT OF AN EXECUTED AWARD

I. References II. General Policy III. Definitions IV. Procedure

I. REFERENCES

A. Standing Order 100.4(n) of The Regents of the University of California concerning expenditures against firm commitments.

B. Delegation of Authority: No. 5240.1--"Expenditures Against Firm Commitments Under Contracts and Grants," from President Saxon to Chancellors and Vice President -Agriculture and University Services, 4/14/80 and 8/26/80; and from Chancellor Young to Administrative Vice Chancellor Hobson, et al., 2/1/82.

II. GENERAL POLICY

The Principal Investigator of a research, training, or public service contract or grant may request permission to spend a specified amount of money during a specified period against an appropriate account and fund number prior to the receipt of an executed award from the funding agency. Three criteria must be met before the Principal Investigator is authorized to spend funds against approved projects in advance of receiving a formally executed award. It must be demonstrated that:

A firm commitment by a funding agency exists to award a contract or grant.
There is an essential need to advance or commit funds.
Other funding is available to cover the risk of a delayed start date or failure of an agency to make an award as anticipated.

The Principal Investigator's Department, School, College, or Organized Research Unit (ORU) is responsible for providing appropriate funds to cover expenditures which might be disallowed as a result of delay or failure of an agency to make an award as anticipated.

III. DEFINITIONS

A. AGENCY CONTRACT OR GRANT OFFICIAL WHO MAY LEGALLY MAKE A FIRM COMMITMENT.

This individual is usually referred to as the "Contracting Officer," "Grants Management Officer," "Procurement Contracting Officer," or similar title. This official may legally commit funds of a sponsoring agency and should not be confused with a "Project Monitor," "Technical Review Officer," "Scientific Officer," or other individuals who review and approve or disapprove the technical or scientific merits of a proposal. The technical monitor is seldom the individual who may commit agency funds.

B. FIRM COMMITMENT

The term "firm commitment" has no legal definition. It is in the nature of a pledge or promise to do something in the future, but is not a binding contract. The phrase is used when University personnel are advised by authorized representatives of funding agencies that a contract or grant will be forthcoming but that a delay, usually related to document processing, will cause the award to be received after the start date of the project.

C. FORMALLY EXECUTED AWARD

The formally executed award is the legal document (contract or grant) which binds an agency to commit funds to the University and binds the University to provide resources (services, goods, facilities, expertise) in return for the funds. The awarding agencies have differing formats for such contracts and grants. Contracts are usually effective only when signed by both the University and the agency; grants often are signed only by the agency.

D. NEED TO ADVANCE FUNDS

In the case of a new award, the need to advance funds might relate to a date which must be met, or any kind of study which must be done, or prepared for, by a specified date (e.g., the observation of a lunar or solar eclipse). For renewal or continuation awards, the need to keep already employed personnel on the payroll may be accepted as one justification for the need to advance funds.

IV. PROCEDURE

Responsibility	Action
Principal Investigator	1. Is advised that an award is forthcoming and prepares Request for Approval to Spend Funds (OCGA Form 4) according to form instructions. (See Attachment A.) a. Identifies nature of commitment by the awarding agency, including identification of the agency contract or grant official who may legally commit funds. (The Office of Contract and Grant Administration will assist in this identification if necessary.) b. Details risks involved. c. Explains need to advance funds and attaches a budget of the amount required by major cost categories. d. Attaches any supporting documentation. 2. Signs and dates form and submits it to Department Chair or ORU Director.
Department Chair or ORU Director	3. Reviews form for completeness. 4. Determines if funds are available within the department to cover expenditures should the anticipated award not be received or does not coincide with the anticipated period of performance. a. If funds are available, checks box on form indicating ability to provide funding for any losses incurred as a consequence of approval of Request. b. If funds are not available, checks box indicating inability to provide funds and recommending that Dean cover any losses. 5. Signs and dates form and forwards it to Dean.
Dean	6. Reviews form for completeness and checks appropriate box. a. If Department Chair or ORU Director is able to provide funds for any losses, Dean checks box indicating concurrence. b. If Department Chair or ORU Director cannot provide funds for any losses, Dean checks box indicating willingness to provide any necessary funds. NOTE: If neither the Dean nor the Department Chair or ORU Director is able to cover losses, Request will not be approved and should be returned to the Principal Investigator. 7. Signs and dates form and forwards it to the Contract and Grant Officer in the Office of Contract and Grant Administration (OCGA) serving the department.
Office of Contract & Grant Administration (Contract & Grant Officer) (Assistant Director) (Contract & Grant Officer or Assistant)	8. Reviews form for completeness, for consistency with University and funding agency policies, and confirms that there is a firm commitment from the funding agency. 9. Signs and dates form indicating recommendation for approval and forwards it to Assistant Director of OCGA. 10. Reviews form, checks box indicating approval or disapproval of Request, signs and dates form, and returns it to the Contract and Grant Officer/Assistant. 11. Forwards approved form with copy of budget to Office of Accounting Services (GAS Contracts & Grants Section). NOTE: If Request is not approved, form is returned to Principal Investigator with an explanation of reason for denial.
Office of Accounting & Services (Contracts & Grants Section)	12. Assigns appropriate account and fund number on form. 13. Signs and dates form. 14. Advises Principal Investigator or Department Administrator by telephone of approval to spend and of assigned account and fund number. 15. Establishes temporary account, fund, and sub-budget titles in General Ledger. 16. Distributes copies of form as designated: a. Pink copy (original) to OCGA. b. Yellow copy to Principal Investigator. c. Green copy to Department. d. Blue copy retained by OAS (Contracts & Grants Section). e. Makes photocopy and sends to Purchasing Department with copy of applicable budget. NOTE: If an award does not materialize as anticipated, the Department involved will inform OAS (Contracts & Grants Section) and identify other fund sources within the Department, School or College to cover any resulting loss

H. Thompson
Assistant Vice Chancellor - Business