16.6.1 UIUC Sponsored Projects Administration

Sponsored Projects

The University of Illinois Urbana-Champaign (UIUC) conducts sponsored research, teaching, and other projects funded by sponsors outside UIUC. For additional information on the policy governing acceptance of contracts and grants, refer to the General Rules Concerning University Organization and Procedure. The homepage for the Sponsored Programs Administration (SPA) provides links to various regulations, policies, and forms. Refer to the SPA homepage for updates and pending changes and to access the most current Facilities and Administrative and Fringe Benefit rates.

Sponsored projects are supported by entities outside UIUC, have a defined scope or objective, and include reporting requirements. They result from proposals submitted by UIUC and funded by an external organization, such as a federal, state, local, or foreign unit of government, a foundation, an association, or a commercial entity.

Sponsored projects such as grants, contracts, and cooperative agreements are solicited and/or accepted for purposes which are consistent with and enhance the teaching, research, and public service mission of UIUC. Sponsored activities are undertaken by UIUC with support from outside sponsors that expect an outcome that either directly benefits the sponsor or serves a public purpose the sponsor wishes to promote. At a minimum, the sponsor requires UIUC to report on how the funds are spent and what progress has been made in accomplishing the goals of the activity. All proposals for support under the category of sponsored activities must be submitted to the sponsor through SPA.

Sponsored project awards can take the forms described below. The distinction between sponsored project awards and gifts is defined in 11.2 Distinctions Among Gifts, Grants, and Contracts of the Business and Financial Policies and Procedures. Gifts are contributions made to UIUC for which the donor receives no direct benefit and requires nothing in exchange beyond a general assurance that the intent of the contribution will be honored.

Grants - Grants are used when the principal purpose of the award is to accomplish a specified public purpose of support or stimulation authorized by federal statute. Grants are also used by state agencies, local governments, foundations, associations, corporations, and other private entities. Grants differ from gifts in that they entail reporting requirements, and differ from contracts in that they do not typically involve specific deliverables. Grant terms and conditions are typically sponsor or program regulations that are referred to but not included in the grant document itself. For a summary of federal terms and conditions for grants, see Appendix I - Typical Terms and Conditions for Federal Research Grants.

Cooperative agreements - Cooperative agreements have the same principal purpose as a grant but are chosen as the instrument of award when conduct of the work involves substantial participation by the federal sponsor.

Contracts - Contracts are used when the principal purpose is procurement, i.e., acquisition of property or services for the direct benefit of the sponsor. Contracts entail specific deliverables, and terms and conditions are incorporated directly into the contract document.

Standard research agreements - UIUC has developed standard research agreements for commercial and other non-federal sponsors (including local governments and State of Illinois). These agreements have been developed in conjunction with the Office of University Counsel and contain provisions that protect UIUC's interests. They can be obtained from SPA's website.

Sponsor-originated agreements - When sponsors furnish agreements to be used instead of standard agreements, they must be reviewed and approved by SPA, and as needed by the Office of Research Administration (ORA) in the Office of the Vice Chancellor for Research, and Office of University Counsel. Where necessary, the ORA or SPA will negotiate with the sponsor to reach mutually satisfactory terms and conditions for conducting the work.

Subawards - Subawards are awarded by a pass-through entity using funds it received from a prime sponsor, rather than its own funds. Subawards are typically subject to the same terms and conditions of the prime award to the pass-through entity, plus any additional terms and conditions the pass-through entity feels it needs for the effective administration of the subaward.

Technical testing agreements - UIUC conducts specified tests on a service basis for external parties when UIUC has special or unique facilities not elsewhere available or accessible. 

Intergovernmental personnel agreements (IPAs) - IPAs may be extended to permanent UIUC employees who are given temporary work assignments at federal agencies. These employees must be faculty or academic professionals who have been employed by UIUC for at least one year before serving on the IPA assignment, and who are eligible to return to a UIUC appointment at the end of the IPA service. While on IPA assignment, UIUC employees continue to participate in UIUC's benefits coverage.

Scholarships and Fellowships - Scholarships are gratuitous payments to students to provide financial assistance during the period of their training. Fellowships are awards involving cash stipends for graduate students or postdoctoral scholars. Fellowships are not awarded for carrying on specific research, and UIUC requires no services of a fellow. When provided by external entities, scholarships and fellowships are managed in one of the following ways:

• Awarded directly to students by external sponsors
• Awarded by UIUC through its Office of Student Financial Aid or the Graduate College
• Received by UIUC departments as gift funds and subsequently awarded to eligible students;
• Administered by UIUC as "agency accounts" as a matter of convenience for entities that wish UIUC to manage payment to a particular student
• Received as a grant and awarded to eligible students selected by the sponsor
• Received as a grant when the sponsor imposes terms and conditions for which UIUC is responsible for compliance, irrespective of whether the sponsor or University selects the recipient

Only the latter two cases above are considered sponsored projects and covered by these sponsored project policies.

Policies and Procedures Applicable to the Conduct of Sponsored Projects

This section sets forth the considerations necessary for proper administration of sponsored projects by principal investigators and unit administrators.

Changes in Projects that Require Explicit Sponsor Approval

In circumstances when principal investigators or project directors wish to make a change in a project that requires the sponsor's explicit approval, they (or their unit's support staff) are to prepare the request to the sponsor, providing necessary justification, obtain unit approval, and submit the request to SPA. SPA will review the request to make sure the content and justification are suitable, and then forward it to the sponsor, or pass-through entity, in cases where UIUC is a subawardee. Since the sponsor may reply directly to either the principal investigator/project director, the unit, or SPA, each should inform the other when they receive a reply from the sponsor.

Changes that can never be made without the sponsor's explicit approval include:

• Change the scope or the objective of the project or program
• Change a key person specified in the application or award document
• Absence of the project director/principal investigator for more than three months
• Reduction in time devoted to a federal project by 25% or more
• Change in circumstances whereby additional federal funding is needed to complete the project

Changes in Federally Supported Research Grants and Cooperative Agreements that Do Not Require the Sponsor's Explicit Approval Unless the Approval Requirement is in the Award or in Agency Regulations

Other after-the-fact changes that may require sponsor's explicit approval are shown in Appendix I - Typical Terms and Conditions for Federal Research Grants. Federal sponsors allow recipients to take the following actions without obtaining explicit approval from the sponsor. Note that the no-cost extension requires that the sponsor be notified.

Although no sponsor approval is required for these changes, departmental officials are responsible for determining that when these changes occur, that they do not alter the scope of the project.

No-Cost Extension

UIUC is authorized to approve a single no-cost extension of up to 12 months for eligible federal grants, provided it notifies the sponsor that it has elected to take such an extension, explains why the extension is needed, and provides this notification at least 10 days before the expiration date specified in the award. This one-time extension cannot be exercised merely for the purpose of using unobligated balances. The PI sends the justification letter to SPA. The letter is to include the length of the extension, the amount to be carried forward, and the plans for completing the project. SPA will notify the sponsor of the extension by countersigning the letter and forwarding it to the sponsor granting officer. For National Science Foundation grants, no-cost extensions are initiated through FastLane.

Any subsequent no-cost extension and any no cost extension greater than 12 months must be approved in advance by the sponsor. The request includes the same information provided for UIUC-approved no-cost extensions, but must be countersigned by the sponsor before it can take affect.

Sample letters to sponsors for both kinds of no-cost extensions are available from SPA's website.

Carry-Forward of Unexpended Funds to Subsequent Budget Period

Multiple-year projects can carry-forward unexpended funds to subsequent budget periods.

Incurring Pre-Award Costs

At the unit's risk, project costs can be incurred up to 90 days prior to the starting date of a project. The procedure to establish an account for this purpose, or to use the expired account of a predecessor project, is described in the Project Account Management section above.

Other Prior Approval Requirements of Federally Supported Grants and Cooperative Agreements that are Typically Waived

In addition to the three conditions described above, most federal sponsors also waive the prior approval requirements for the following actions. The document entitled "FDP Prior Approval and Other Requirements" describes how the participating Federal Demonstration Partnership agencies implement these and other requirements for research projects. For non-research grants and cooperative agreements from FDP agencies, and all grants and cooperative agreements from non-FDP agencies, consult the sponsor grant policy documents, many of which can be found at SPA's website, or contact the post-award staff at SPA. Sponsors are considered to have approved an item or action if it was included in the proposal and not explicitly addressed as unacceptable in the award.

Rebudgeting

Sponsors can allow budget transfers among direct cost categories, rebudgeting of direct to F&A costs and vice versa, and transfer of funds allotted for training allowances to other categories. Note, however, that NSF still requires prior approval to rebudget funds provided for participant support costs, and other agency terms and conditions can limit rebudgeting. Rebudgeting is reflected in UFAS only when explicit sponsor approval has been obtained. Where sponsor approval is required for rebudgeting, units can use the sample letter at SPA's website for this purpose.

Costs that Require Prior Approval under Federal Cost Principles

Costs include equipment and improvements to equipment, alterations and renovations, and faculty consulting in excess of the base salary. Note that the Federal Demonstration Partnership agencies limit unapproved alterations and renovations to $25,000 (except for NIH which permits up to $300,000 before sponsor approval is required). The Army Research Office (ARO) still requires prior approval for all equipment.

Subawarding Work to a Subrecipient Not Named in the Proposal

Some sponsors place no restriction on a recipient's prerogative to subaward work to a subrecipient when such subawarding was not envisioned in the original proposal. Nevertheless, UIUC requires that Principal Investigators/Project Directors obtain SPA approval.

Sponsor Approvals for Projects other than Federal Research Projects

Federal projects other than research projects and projects funded by non-federal sponsors usually require sponsor approval for changes that federal research projects can make without explicit sponsor approval. When these situations arise, the requests are to be made as described above for changes requiring explicit approval.

Some federal agencies, including some of those participating in the Federal Demonstration Partnership, place restrictions even on research projects. Appendix I - Typical Terms and Conditions for Federal Research Grants provides additional information on conditions FDP participating agencies place on these actions.

Where UIUC's award is received from a prime awardee, rather than directly from the sponsor, all required prior approvals are sought from the prime awardee, and not the sponsor. In the case of subawards from institutions that are not participants in the Federal Demonstration Partnership, the sponsor's non-FDP grant regulations apply.

SPA's website has sample letters available for seeking sponsor prior approval for no-cost extensions, rebudgeting, carrying forward funds across project years.

Post-Award Administration

This section sets forth the requirements for managing sponsored project accounts, including billing, financial reporting, and other administrative aspects of sponsored project management.

Project Account Management

New Projects

SPA provides notices of awards to the PI's department. In those instances where the PI or the department receive an official award notice from the sponsor, they are to forward it to SPA to become part of the formal record of the award. SPA cannot establish a budget without the official award notice. When SPA receives notice of award electronically, it forwards the notice immediately to the PI and unit business administrator, even before the award is formally accepted or an account established. SPA's official award notice is made after the award is accepted and the account is established.

Requests for new accounts - All project accounts are established by SPA's Accounting Office. These accounts include the project budget and incorporate numerous account attributes that facilitate the post-award administration of these projects.

Anticipation accounts - It is often beneficial to make staff appointments and incur other expenses prior to the formal notification of an award by the sponsor. When it can be determined with a high degree of certainty that an award will be made, campus units, at their own risk, may incur costs in anticipation of the award. Units should use the Revised Form GC70, Request for Anticipation Grant/Fund - Request to Use Expired or Overdrafted Grant/Fund to establish an anticipation account. Most federal agencies allow pre-award costs for 90 days prior to the formal starting date of a grant, provided that incurring these costs is in the best interest of the project. Others do not allow costs incurred before the project start date, though in some instances, the formal award is received after the project start date. Units should be informed about whether or not pre-award costs are permitted before requesting and placing charges on an anticipation account.

In cases where the funding period has ended and follow-up funding is expected but not yet received, units may elect at their own risk to continue charging the expired account for up to 90 days. Before doing so, they must either complete a Revised Form GC70, Request for Anticipation Grant/Fund - Request to Use Expired or Overdrafted Grant/Fund and obtain approval from SPA, or make an appropriate indication on the Notice of Terminating Accounts form and return it to SPA.

Continuation Projects

A continuation project exists when a project is initially authorized for an extended time (usually two to five years) but funds are provided by the sponsor on an annual basis, generally subject to satisfactory progress as indicated on the progress report and availability of funds.

Because of the difficulties associated with discontinuing and re-starting a project when funding is delayed, units may elect to continue a project pending receipt of delayed continuation funding. Should the funding not be awarded, or should it be awarded at a lower-than-anticipated level, units are responsible for any expenditures not covered by the sponsor.

Usually, the same general and subsidiary ledger accounts are used for all years of a multi-year, continuing project.

All of the major federal funding agencies and many other non-federal sponsors require project status reports before they will provide continuation funding. PIs are responsible for knowing the format and timing requirements of progress reports, and for providing them to the sponsor.

All major federal agencies allow unused grant funds to be carried forward into future budget periods, though some, like the National Institutes of Health, place some restriction on the amount or percentage that can be carried forward or subject large carry-forwards to special review.

Renewal Projects

A "renewal" exists when a project expires, and the proposal for continued support is subject to competitive review and results in a new award. This is different from a continuation project where continued funding is contingent only upon satisfactory progress and availability of funds. New general and subsidiary ledger accounts are established for renewal projects, except in those instances where the sponsor extends the funding period and provides additional funds to the existing award number.

Transferred projects

SPA provides assistance to faculty and departmental personnel when awards are transferred to and from UIUC. For specific guidance, please contact SPA when transferring awards to UIUC.

First Published: May 2002 | Last Updated: August 2024 | Last Reviewed: April 2023