A guarantee account is an account type that is setup for new and renewal projects prior to receiving the official notification of the award or execution of the contract. Setting up an account before an award is received allows expenditures to be charged to the correct project and therefore limits cost transfers and retroactive personnel actions.
Schools or departments requesting a guarantee account do so at their own risk. If funding for a project on guarantee does not materialize, or is less than expended, incurred expenses will be transferred to an eligible departmental account.
A guarantee account will only be issued for projects that have yet to receive an official award notice. If an award notice has been received and is pending set-up, a guarantee account will not be established. Guarantee account set-up follows the same process regular award set-up. The allowability of pre-award costs must be taken into consideration. All standard award documentation requirements, including assurances, must be complete prior to setting up a guarantee account.
Allow SPA five (5) business days to complete the majority of requests. Large projects or projects with uncommon costs may require more review time. All requests will be reviewed in the order received and in accordance with major proposal deadlines.
Guarantee accounts may be established for grants as long as the start date in FMS is not before the start date on the grant award notice. Federal accounts that allow pre-award costs are the exception. In the exception cases the FMS project start date (when spending may begin) should be within ninety (90) days of the start date on the Notice of Grant Award.
Guarantee accounts are not set up on non-federal clinical trial agreements and cannot be set up prior to the effective date of the contract. Contracts do not allow for pre-award spending. Subcontracts off of federal grants may be set up on guarantee as long as the start date matches the start date on the prime institution’s NOGA.
Guarantee accounts are set up for four months with a $0.00 budget. An extension of an additional four months may be requested
The following procedure is to be used when requesting the establishment of a guarantee account for contracts and grants for new & renewal projects:
The responsible business official will submit a written request to the appropriate Sponsored Projects Administrator (SPA) in Pre-Award.
Emails and facsimiles are accepted. The request should include:
- PI name.
- Project title.
- Sponsor name.
- Estimated beginning and ending dates of the project.
- Anticipated amount of funding to be received.
- The source of funding (i.e., federal, state, local or private).
- Budget pools to be set-up.
- Approvals from the PI and Responsible Department or Business Official.
Example guarantee request template.
Also, a complete Review and Approval Form, including all applicable assurances (human subjects, animals, radioactivity, biohazards, etc.), and complete Conflict of Interest Certification forms for all personnel on the project. If there is a potential conflict, the project must be submitted to the RCOI committee for review, and the guarantee account will not be set up until a response is received from the Committee.
And, as with all awards, the Human Subjects Protection training must be completed prior to account setup.
Once all appropriate documentation and information is received, SPA will notify Post Award Finance who will set up the guarantee account and notify the department.
Note* : It is the department's responsibility to monitor all guarantee accounts closely until the award arrives.
For existing accounts, where a project number has previously been assigned in the accounting system and the budget period has ended, the department may request that the account be guaranteed for four months. This type of guarantee is normally necessitated by the pending completion of a grant or contract amendment by SPA.
As with a new account guarantee, schools or departments requesting a guarantee of an existing account do so at their own risk. If funding for a project on guarantee does not materialize, or is less than expended, incurred expenses will be transferred to an eligible departmental account.
The following procedure is to be used when requesting the guarantee of an existing account:
The responsible business official will submit a written request to the Post Award Finance Team (PAF Team). Emails and facsimiles are accepted. The request should include:
- Project number.
- PI name.
- Project title.
- Sponsor name.
- A statement requesting that the project be placed on guarantee.
- During the guarantee period no additional amounts are added to the budget.
- An extension of an additional four months may be requested.
Note *: It is the department's responsibility to monitor all guarantee accounts closely until the award arrives.
Once all appropriate documentation and information is received for the grant or contract amendment, SPA will notify PAF who will set up the amendment, remove the guarantee, and notify the department.