Underwriting Procedures

Underwritten Accounts

Occasionally, a grant account is established before award documentation is received. An account can be established under these circumstances if a Dean, Director, or Vice President authorizes an underwriting of award expenses until the official award documentation is received.

Underwritten accounts generally occur under one of the following circumstances:

1. A non-competing continuation award does not arrive when anticipated;
2. An application is submitted and the sponsor acknowledges its award, however, the formal grant document is not received by the University when funds are needed;
3. An award is received, but its setup is delayed due to budgetary or other issues.

Underwriting Procedures

When an underwritten account is necessary, the PI must take action by notifying his or her Dean, Director or Vice President of the need for the account. The Dean, Director or Vice President must make a written request to the SPRS Director asking that a grant account be established (or continued in the case of anticipated renewal). An underwritten account will be opened by the OGA only upon the written recommendation of the Vice President for Research. A request for an underwrite should include the following information:

1. maximum dollar amount of the underwrite;
2. anticipated date of sponsor award; and
3. any budget category restrictions for the underwrite.

An account number to which charges may be transferred also is required should the anticipated award not be granted or should some expenditures be disallowed.

Underwritten accounts carry an element of risk. If the award is not received, the unit underwriting the account assumes responsibility for accumulated expenses. If the award is received and its start date is later than anticipated, all expenses accumulated prior to the official start date may be disallowed by the sponsor. An account number will be required should the anticipated award not come through, or should expenses charged to an underwritten account be disallowed by the sponsor.

Underwritten accounts carry the following qualifications:

1. All pre-award costs charged to an underwritten account must be reasonable,allocable, and allowable;
2. Pre-award costs on federal grants can normally be charged to underwritten accounts 90 days before the award’s official start date. (Note that most non-federal sponsors DO NOT allow pre-award costs).