University of Iowa

Advance Payments - Outgoing Subawards

Advance Payments - Outgoing Subawards

There may be situations when the university needs to advance funds to enable a subrecipient to begin working on a project.

Federal guidelines under as well as the NIH Grants Policy Statement allow for advance payments to lower-tier recipients (Subrecipients) when those recipients lack sufficient working capital to perform the work. Additionally, the Uniform Guidance, 2 CFR 200, requires monitoring of recipients of subawards.

In consideration of the federal regulations as well as university procedures that must be followed in order to initiate pre-payments, the following guidelines apply when the university chooses to advance payments to a Subrecipient.

 

Step 1: Department Procedures to Request an Advance of Funds to a Subrecipient:

To request an advance payment for a Subrecipient, the subaward requestor will select ‘Yes’ for the question on the eDSP Outgoing Subaward Request, “Advance Payment:”, found in the General Section.

PI/Department must submit:

  1. The completed Principal Investigator Subrecipient Monitoring Assurance which states the roles and responsibilities of the PI regarding Advance Payments, and is signed by the PI and DEO.  This letter certifies that the PI has read and understands all UI Subrecipient monitoring requirements.
  2. The Subrecipient Request for Advance of Funds (Sample Letter Template) which is a letter from the Subrecipient stating the need for Advance Payments, dollar amount, and is signed by the Subrecipient.

 

Step 2: Division of Sponsored Programs and Grant Accounting Office Review:

The Division of Sponsored Programs (DSP) and Grant Accounting Office (GAO) shall review all material listed above and make a determination if there is sufficient justification to approve an advance fund request.

All subawards that have been approved for advance payment require a formal Subrecipient Monitoring Assurance letter (see item 1 above) signed by the PI and DEO that will be placed in the DSP project file. Please note the Subrecipient Request for Advance of Funds document (see item 2 above) will be valid for 5 years from the date of the letter.

The allowed schedule and amounts of advance payments are as follows:

  • Initial payment: 20% of annual award amount, plus budgeted equipment
  • Quarterly payments: one fourth of balance remaining after the initial payment

The advance payment schedule and the financial reporting requirements will also be written into the formal subaward agreement by DSP.

 

Step 3: Department/PI Procedures for Advance Payment Invoicing

Once the final, signed subaward agreement is received by the university, advance payments will be allowed to proceed.

To initiate an advance payment (this includes both the initial and quarterly payments), the Department/PI must:

1. Complete the Advance Payment Request (see form for required fields)

2. Submit to Grant Accounting, 118 S. Clinton St.

 

Department and PI Responsibility

During the project, the PI is responsible for monitoring that the project is proceeding as expected and that the Subrecipient is submitting financial reports by the required deadlines. The university will not allow additional advance payments in the event that required financial reports are not received. As the financial reports are submitted by the Subrecipient, the Department/PI is responsible for reviewing them for consistency with the subaward budget and compliance with the terms of the prime award.  As a result of this review, the Subrecipient must be notified of any costs that are determined unallowable.

 

The Department/PI is responsible for collecting any funds that have been advanced that require reimbursement to the university. This could include costs that are determined unallowable or advances that exceed the final expenditures submitted by the Subrecipient. If these are uncollectable from the Subrecipient, the department will be responsible for the uncollected funds.

 

 If you have questions about advance payments to Subrecipients, please e-mail the DSP Contracts Team or call 335-2123. Outgoing subawards are generally assigned to DSP staff according to the PI's college or unit. Click here for the DSP staff directory.