Codes and Approval

So, you've submitted a proposal - What happens next?

When the sponsor has reached a decision, Duke will be informed through either a notice of award letter or a regret letter. If the proposal is to be funded, then the sponsor sends notice to Duke that contains the terms and conditions that Duke must accept to receive the funding.

The ORS staff are responsible for negotiating the terms and conditions of awards, contracts and cooperative agreements which define the relationship between the University and the sponsor and clarify each party's obligations. This is done in consultation with the PI so that he or she understands the issues involved with a contract and can assist by providing background information pertinent to the research being contemplated.

Award Notice When a notice of award arrives in ORS kicking off the Award Process, several things must happen simultaneously. The process involves several offices at Duke including ORS, TBS, PAFM, OPAA and the owning department.

After an award has been negotiated and approved, an ORS Award Specialist will send an email to the PI, co-PIs, the administrative unit, and TBS announcing that award information has been entered into SPS. TBS will enter the revised budget plan into SAP.

 

Signing the Award If the award requires a signature of acceptance, ORS will sign on behalf of Duke or, if needed, secure the President's or the Vice President for Research's signature. Some sponsors, particularly small foundations, send letters of agreement to PIs requesting that they sign and return the documents. PIs may sign the documents if they wish, but as they are not authorized to enter the University into any agreements, the award documents must also be approved and signed by ORS. ORS will then return the fully executed documents to the sponsor or, if necessary, ORS will return the document for sponsor signature and await the fully executed copy.

Establishing the WBS Element (WBSE)

In order to spend funds when an award arrives, a separate, or restricted, financial account must be set up so that the university can report back to the sponsor on how the funds were used. That account is called a WBS Element or, in the old terminology, a fund code. (If a PI receives the original copy of an award it should be forwarded to ORS immediately so that this process can be started and the project can be underway as quickly as possible.)

Upon receipt of an award notification, ORS will initiate the code request in SPS.

It should be noted that there are three instances when ORS will wait to request the WBS Element from TBS.

  1. When the PI, co-PI(s) or PI-Fellow(s) have not completed RCC training,
  2. When the PI, co-PI(s) or PI-Fellow(s) do not have up-to-date COI disclosures on file, and
  3. When the award is a contract that will require significant negotiation.

There are three types of WBS Element requests.

  1. WBS Element Request with Accepted Award: Many of our sponsors issue a consistent set of terms and conditions with each grant Duke receives so they are acceptable with minimal review. Standard grant Terms and Conditions (T&Cs) from NSF and NIH require very little review and little to no negotiation. In these cases, the goal of ORS is to initiate the WBSE request within 48 hours. In other cases, sponsors may have included terms and conditions that are unacceptable to Duke, and ORS will not request a code until those issues have been addressed.
  2. WBS Element Request Pending Award Acceptance: In order to reduce the amount of time it takes to request and receive a WBSE, ORS will request the new code prior to the acceptance of the award. For instance, ORS might receive a subcontract from another institution of higher education, sign and return the documents, and then be waiting to receive the fully executed documents back from the other institution.
  3. WBS Element Requested in Advance of an Award: In some cases, PIs may learn from their Program Officers that they are going to receive an award prior to the award actually being issued. It’s important to remember that POs generally do not have the authority to legally commit the federal government, only Grants Specialists and Contracting Officers have that authority. If the department believes that the chances of receiving the award are high, then the department can request a code in advance as long as the chair or dean agree to backstop the expenditures. If the PI is transferring an award to Duke from another university, the risk of Duke not being able to sign the award is minimal and a WBSE in advance may help eliminate any gaps in funding. Duke units can initiate this request in SPS following the steps in the WBSE Create Quick Guide referenced above.

2XX - 38X and A03 WBS Elements

WBS Elements are 7-digit numbers. A sponsored project WBS Element is identified by the first three digits of the 7-digit number. It will always begin with a two (2) or three (3) - meaning restricted - and thus is referred to as a 2XX or 3XX account. The second digit identifies the sponsor, and the third identifies the type of activity funded, e.g. research, fellowship, conference. The last four digits comprise a unique identifier for the account. It will look something like this: 3339999 and translates to 3 for restricted fund, 3 for National Science Foundation, 3 for research.

  • Parents and Children: If it is necessary to account separately for different components of a single project, parent and children WBS Elements may be established as needed. For example, if subawards are included in a project, ORS will request a different WBS Element for each of the subrecipients so that the PI and department grant manager can more easily track expenditures.

A03 WBS Elements

Department of Health and Human Services - DHHS WBSE codes (formerly 303 and 203xxxx) are assigned with the prefix “A03.”  These codes will work the same as 203xxxx codes.  As a reminder, you should be careful to update your SAP variants to include A03xxxx codes as needed, and be sure to include them in any ranges where you are selecting DHHS codes.

For a detailed explanation of Cost Objects, and 2XX and 3XX WBS Elements in particular, see the Financial Services Chart of Accounts.

29X and 39X WBS Elements
Miscellaneous 39X accounts are established for external funds received through mechanisms other than the standard proposal and award process. Examples include all gifts, conference and symposium fees for events sponsored by Duke, editorships, class gifts, executive education programs, and corporate scholarship programs. The primary difference between fund codes in the 2XX - 38X series and the 39X series is that there is no requirement for financial reporting back to a sponsor on a 39X code.

If funds are received outside the normal proposal and award process, the department or school should request that a miscellaneous 39X fund code be created for the funds. The WBS Element Request for a Miscellaneous Code form has been designed for submitting the request.

 

Additional information can be found on Duke's Financial Services page: SAP Financial Accounting Code Guide

Department Preaward Spending
Situations may arise, where the PI needs to begin spending the funds prior to the start date of the award. On many federal grants, Duke has the authority to approve preaward spending up to 90 days prior to the start date. However, this is not always the case. Some sponsors may require their prior approval before spending. The PI should draft a letter justifying the need to begin spending earlier than the award start date. The purpose of preaward spending is not simply to start a project early, but rather to make expenditures which would facilitate beginning the project on the specified start date.

For example:

  • Purchasing supplies and equipping a lab
  • Purchasing equipment when a sale price is only available before the start date
  • Interviewing and hiring project staff

Please keep in mind that all costs incurred must be allowable under the potential award, and all preaward costs are incurred at the department's risk. A sponsor is under no obligation to reimburse such costs if for any reason the sponsor decides not to issue the award.

Preaward Spending with Federal Funds
Uniform, government-wide regulations govern preaward spending on federal grants. If a project has been recommended for funding, federal agencies have several options. They may:

  • prohibit preaward spending
  • require written agency approval
  • allow universities to incur preaward costs 90 days prior to an award without prior written agency approval
  • exercise the default position provided in the regulations, as follows: If a federal agency does not explicitly address preaward spending in its regulations or in the terms and conditions of an award, the requirement for prior written agency approval is automatically waived, and the authority to approve requests is transferred to the University.
  • Preaward spending more than 90 days prior to the start date of an award must always be approved by the agency.

Preaward Spending with Non-federal Sponsors
PIs who wish to initiate preaward spending should notify ORS who will contact the non-federal sponsors to determine if it is permissible, and if so, what procedures should be used.

Generally, sponsor approval requires the following:

  1. A letter describing the need to incur expenses before the proposed start date of the award should be addressed to the sponsor. The letter should be addressed to whomever told the PI that the project was recommended for funding. This will usually be a program officer.
  2. The request must be sent to ORS for review, approval, and required signatures.
  3. When approval is received, ORS will notify the appropriate offices.