Advance Account vs. Pre-Award
Advance Account vs. Pre-Award
An Advance Account and a Pre-Award Account both allow spending before sponsor funding arrives, but they differ in timing and risk. An Advance Account is created before the grant is formally awarded, based on the expectation that funding will be approved though it is not guaranteed. A Pre-Award Account is established after a grant has been officially awarded but before funds are received from the sponsor, allowing the institution to begin spending in anticipation of incoming funds. Because advance account spending occurs without a fully executed agreement, it carries greater financial risk. If the grant is not awarded, the department may have to cover those costs internally.
Compliance
Before proceeding with an Advance Account or Pre-Award, all compliance protocols (IRB, IACUC etc.) associated with the project must be completed and approved. Extenuating circumstances where protocols are not yet completed will be reviewed by the Sponsored Projects Administration Team on a case-by-case basis.
Advance Account
An advance account (also known as an "at-risk" account) is a temporary funding mechanism that allows a project to begin spending before the official award is fully executed. It is usually set up when funding is highly likely but not yet finalized, enabling activities like hiring staff or purchasing materials to start on time. This may also reduce the need for later cost transfers. However, the department must accept full financial responsibility for any expenses incurred if the award is not ultimately funded or accepted, or the awarded start date is later than the advance account start date and pre-award costs are not permitted.
Pre-Award
Pre-award expenditures are expenses that occur before the official start date of a funded project. These costs must be essential to the project and must meet the standards of being allowable, properly assigned to the project, and reasonable, as outlined in the Uniform Guidance (2 CFR 200). In most cases, such expenses are incurred within 90 days prior to the project’s start date. Proof of anticipated funding from the sponsor must be provided to proceed with a Pre-Award.
For federal awards governed by Federal-wide Research Terms and Conditions, pre-award costs are often permitted within this 90-day period under expanded authorities. If an award does not include these expanded authorities, prior approval from the sponsor is required, or the terms of the grant or contract may need to be renegotiated.
| Pre-Award | Advance Account | |
| Type | Phase/process | Financial tool/account |
| Timing | Before the official award start date (often within 90 days prior) | Before award is finalized but after proposal is submitted |
| Spending Allowed? | Yes, but with limits - only allowable pre-award costs under specific conditions | Yes |
| Cost Requirements | Must be allowable, allocable, and reasonable (per Uniform Guidance 2 CFR 200) | Must follow institutional and sponsor guidelines |
| Risk Level | Moderate (depends on sponsor approval and allowability) | High (costs to department may not be reimbursed) |
| Requirement | Required for all funding requests | Optional, only if early spending is needed |
| When Used | During planning and limited early spending period | When funding is expected but not finalized |