Many departments run into trouble because they knew a faculty member needed/wanted to begin a project before the award, and they allowed the faculty member to use an unrelated federal account to fund it. Using unrelated federal accounts as a temporary holding place (pending an award) is usually viewed by federal auditors as a serious breach of internal control procedures that may damage the reputation of the faculty member, the department, and the university. In addition, financial disallowances may result. Due to the federal audit technique of sampling and extrapolation, a few inappropriate expenditures can be extrapolated to the entire population of MSU grants and contracts. This has the potential to multiply a small error into a large amount of questioned costs and potential disallowances. To minimize these occurrences, MSU makes available to departments two types of accounts, Advance & Hardship Accounts. These accounts allow the department to charge project expenditures to the correct account when the expenditure is first incurred.
Advance Accounts are used when a PI has requested an expedited account setup. This setup can occur if OSP has received a contract or grant award to negotiate for the project and OSP believes it can be successfully negotiated and accepted, all compliance approvals are on file (IRB/animal approvals, COI, export control, eTransmittal, etc...) AND the college has agreed to allow Advance Accounts.
- Over 99% of current contracts are successfully negotiated.
- Advance Accounts will "normalize" the process, such that, the PI can begin work without additional paperwork.
- CGA will assign a project account number after OSP approves the set up of the account. No funds will be added to university ledgers until the award negotiation is completed and the agreement is fully executed.
- In return for this expedited service, you are agreeing in advance, without specifically signing on to each proposal, to cover any expenses that might become non-reimbursable.
- Advance Accounts can be immediately canceled.
|Colleges & Units below participate in Advance Accounts
|College of Agriculture & Natural Resources
|College of Arts & Letters
|College of Communication Arts & Sciences
|College of Education
|College of Engineering
|College of Human Medicine
|College of Natural Science
|College of Nursing
|College of Osteopathic Medicine
|College of Social Science
|College of Veterinary Medicine
|James Madison College
|MI Agricultural Experiment Station
|Facility for Rare Isotope Beams (FRIB)
|Office of the Vice President for Research and Graduate Studies
|Urban Affairs Programs
Hardship Accounts are available when the department guarantees that if the award is not made, for any reason, the department will transfer the expenses to another non-restricted account and OSP is provided with adequate information to indicate that an award is likely and what type of award will be issued, i.e., a grant award or a federally-funded contract (if the funding document is anticipated to be a Federally-funded contract, a Hardship Account generally cannot be issued since it is unlikely that pre-award costs will be allowed).
Hardship Accounts are for those cases where the department wants an account number to be assigned, and project expenses to occur on the correct project account, even though OSP does not have draft of the award. Hardship Accounts are different from "Advance Accounts" because with Advance Accounts, OSP has an award in process and the account will be issued barring a highly unlikely event.
Hardship Accounts may be established via a memo from the unit administrator to OSP (addressed to Contract Team 1 or 2 based on your college) requesting a Hardship Account and indicating that if the award is not made, expenditures made to that account will be covered from their departmental funds. The department may also request that the Hardship Account only be used for certain items (salaries, for example), or up to a certain dollar amount, i.e., not to exceed $50k. Generally, Hardship Accounts up to $100k can be guaranteed by the department chairperson. If the department wants to expend in excess of $100,000 on the Hardship Account, an approval from the appropriate dean is required. Of course, Hardship Accounts cannot be setup until an eTransmittal has been processed, and all compliance documents (IRB/animal approvals, COI, export control, etc..) are received by OSP.
Hardship Extensions are used when an existing account has expired but additional money is expected. This keeps the account open for payroll and Purchasing items. Hardship extension requests need approval from the Department Chair which can be emailed to firstname.lastname@example.org. Alternatively, a department administrator can route an extension to an account in KFS via an account edit edoc, attaching the Chair’s approval or ad hocing the Chair on the KFS route for his or her approval.
The Advance and Hardship Account types assume that:
Departments that are not included on the approval list for Advance Accounts, but would like to be, need to have the Dean/Director/Chairperson complete the Advance Account Sign Up form. The signed form can then be returned to CGA.