O. Not-fully-executed (NFE) Spending Accounts on Externally Sponsored Programs

 (Note: OLPM sections on this page may be cited following the format of, for example, "UNH.VIII.O.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

1.   Background

NFE accounts, also known as "at risk" accounts, provide principal investigators the opportunity to initiate work under an externally sponsored program and begin incurring associated expenses prior to the conclusion of negotiations and the institutional acceptance of an award by an Authorized official. NFE accounts allow investigators an opportunity to:

  • Begin a seasonally-dependent project;
  • Place an advanced order for long lead time items (i.e., equipment);
  • Provide continuity of funding for students and research staff;
  • Record and track expenditures and eliminate the need to charge other unrelated accounts as well as the need to transfer expenses once an award is executed

2.   Definitions

2.1   A not-fully-executed (NFE) account: is a budgeted account established in the University System of New Hampshire (USNH) financial accounting system for the purpose of permitting expenses in anticipation of receiving externally-sponsored funds for a University of New Hampshire (UNH) program.

2.2   Pre-award costs are those costs incurred prior to the start date of the period of performance and in anticipation of an award where such costs are necessary for efficient and timely performance of the scope of work.

3.   Policy

3.1   Sponsored Program Administration (SPA) may establish a unique NFE spending account on the authority of a principle investigator's UNH Responsibility Center (RC) unit head (normally a dean, institute director, vice president, or officially-named designee).

3.2   SPA will ordinarily establish an NFE upon request because UNH has an established history and previous dealings with a sponsor, and the issues to be resolved prior to executing an agreement are routine. There are cases, however, where terms and conditions that are of significant concern to the PI, the RC, and the University may have to be negotiated. In these instances, prior to establishing the NFE, SPA will identify known areas of concern and the associated financial and/or non-financial risks to ensure the investigator and his/her RC are aware of the risks they are accepting. Examples of negotiation issues include, but are not limited to: publication restrictions and confidentiality requirements; intellectual property; and indemnification.

3.3   In making the decision to approve an NFE spending account for a specific program, the RC unit head must have received reasonable assurance that the externally-funded award will be made to UNH and must evaluate the level of financial risk to his/her unit budget. Any expenses charged to the NFE spending account that are not reimbursed ultimately by the externally-funded award must be reimbursed from the RC unit operating budget or some other non-restricted UNH funding source under the RC unit head's purview.

3.4   The RC unit head will make the final determination about whether to approve or deny the request to establish an NFE. When an RC unit head approves an NFE for $500,000 or more, s/he must notify the Senior Vice Provost for Research, the Vice President for Finance and Administration, the Provost and the Executive Vice President for Academic Affairs.

3.5   All parties, including principal investigator, the RC unit head, and SPA, will endeavor to minimize the expenses against NFE spending accounts and minimize the time between establishing an NFE spending account and fully executed award. All expenses to NFE spending accounts must be allowable under the applicable regulations and terms and conditions of the award and must be incurred within the period of performance.

3.6   UNH will normally not assume the risk of guaranteeing a subrecipient’s costs under an NFE account, and requests for sub-recipient costs under an NFE must provide compelling justification.

3.7   Establishing an NFE account does not create the ability to incur pre-award costs. Before incurring pre-award expenses, the investigator should consult with SPA to confirm that pre-award spending is permissible under the applicable regulations and terms and conditions of the award.

4.    Procedures

4.1   Requesting an NFE account: A principal investigator initiates an NFE request (form) and submits it to his/her department chair and RC unit head for approval, which in turn requests an account from SPA on the investigator's behalf. This same procedure will be repeated to either increase the budget and/or extend the term of an NFE.

4.2   SPA will inform the RC if it has any concerns about the terms in the award and will establish the NFE account if the RC remains willing to bear the risk.

4.3   Period. The recommended period of a NFE is 90 days. Longer periods may be anticipated for awards being transferred into UNH (i.e., awards new faculty bring with them from another institution). SPA will request that RC’s review NFE accounts that have not been converted to active status within 2090 days of the start date of the budget period.

4.4   Upon acceptance of an award by UNH, the account will be converted from NFE to Active status by SPA. The RC is responsible for removing expenditures from the NFE account if the award is not made, not accepted, or if the terms of the award deem expenditures to be unallowable.

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