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Greetings, PIs, Business, and Grant Administrators,
Recently federal agencies have increased their focus on the burn rate of award funds and the timing of expenditures as they relate to the performance period of the award. For example, if an award is 60% into its period and only 20% of the funding has been spent, a sponsor would likely investigate further. Similarly, a sharp increase in spending at the end of an award period will likely result in further investigation.
Managing award spending begins when the award is first received and continues throughout the life of the award. Good communication and timely review of financial information and personnel effort by both the PI and unit post award administrator will help avoid spending spikes, address potential questions, and facilitate close-out of the award.
Although the Principal Investigator (PI) is ultimately responsible for the award, day-to-day financial management by a unit post award administrator can make a big difference in ensuring that funds are properly spent in accordance with the approved budget and research work plan. Spending spikes, not only pose an audit risk, but often result in unallowable costs that require transfer off of the award.  Following are some tips for avoiding them:

  *   Develop a spending strategy with the PI at the beginning of an award.
  *   Track spending on a periodic basis against budget and make adjustments as appropriate.
  *   Regularly hold meetings with PIs that are structured and include reviewing financial reports.
  *   Regularly review salary and effort, alert the PI of any issues, and make any necessary adjustments timely.
  *   Plan, prepare and analyze regular communications with sponsors, such as progress reports, financial reports or no cost extensions, in accordance with the milestones and time frames indicated in the award document.
Large unspent balances may require justification to the sponsor, and SPA staff can assist in facilitating the necessary communication.  The justification should clearly explain why a large unobligated balance exists, its impact on the scope and timeline of the project, and include a detailed plan on how the unspent funds are expected to be utilized in the next budget period.

Several federal agencies created detailed guidance as it relates to reporting of unspent balances.

NIH<https://grants.nih.gov/grants/policy/nihgps/HTML5/section_8/8.1.1_nih_standard_terms_of_award.htm>
Department of the Air Force<file://files.uvm.edu/shared/frs/GACA/Finance/Templates/Communication/Sponsor%20Policies/Sponors%20Spending%20Trends%20Notices/AFOSR%20Expenditure_Research%20Prot_Memo_January%202022_Final.pdf>
SAMHSA<https://www.samhsa.gov/sites/default/files/samhsa-overview-of-carryovers-grantees-11-06-17.pdf#:~:text=For%20the%20recipient%20to%20carry%20forward%20unspent%20funds,remark%28s%29%20in%20the%20FFR%20Section%2012%20%E2%80%93%20Remarks.>
HRSA<https://bphc.hrsa.gov/compliance/compliance-frequently-asked-questions/health-center-program-carryover-unobligated-balances-frequently-asked-questions>
HHS - Administration for Children & Families<https://www.acf.hhs.gov/orr/resource/managing-federal-grants>

If you have any questions or concerns, please reach out to your SPA financial analyst<https://www.uvm.edu/spa/staff-function>.

Thank you.

Linda Serrantonio, CRA | Assistant Director | Team Lead
Research Finance | Reporting
University of Vermont
Sponsored Project Administration
217 Waterman | 85 South Prospect Street
Burlington, VT 05405-0160
P: 802-656-4194 | [log in to unmask]<mailto:[log in to unmask]> | www.uvm.edu/spa/<http://www.uvm.edu/spa/>


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