Research Administration Policies

RA63 Budget Revisions and Other Prior Approval Requirements

Policy Status: 

Active

Subject Matter Expert: 

Kimberly Croft, 814-865-1962, ksw13@psu.edu

Policy Steward: 

Senior Vice President for Research and Corporate Controller

Contents:

PURPOSE:

This policy identifies prior approval requirements associated with budget revisions on sponsored programs.

BUDGET REALIGNMENT:

Budget realignment is the process of adjusting the original awarded budget. There are many considerations in determining if a budget can be realigned, including departmental and college restrictions. Agency or sponsor regulations are the prime determinant if realignment is permitted and within what parameters. The Principal Investigator or Project Director (PI/PD) of a sponsored project is required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions, in accordance with the specific terms and conditions of the individual award. All such reports or requests must be processed through the Office of Sponsored Programs and countersigned by an authorized official of the University.

GUIDANCE FOR FEDERAL GRANTS AND COOPERATIVE AGREEMENTS:

Per the Uniform Guidance 2 CFR 200.308 Revision of budget and program plans:

(a) The approved budget for the Federal award summarizes the financial aspects of the project or program as approved during the Federal award process. It may include either the Federal and non-Federal share (see definition for Federal share in §200.1) or only the Federal share, depending upon Federal awarding agency requirements. The budget and program plans include considerations for performance and program evaluation purposes whenever required in accordance with the terms and conditions of the award.

(b) Recipients are required to report deviations from budget or project scope or objective, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with this section.

(c) For non-construction Federal awards, recipients must request prior approvals from Federal awarding agencies for one or more of the following program or budget-related reasons:

  1. Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
  2. Change in a key person specified in the application or the Federal award.
  3. The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.
  4. The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with Subpart E of this part as applicable.
  5. The transfer of funds budgeted for participant support costs as defined in §200.1 to other categories of expense (See RA22 – Participant Support Costs)
  6. Unless described in the application and funded in the approved Federal awards, the subawarding, transferring or contracting out of any work under a Federal award, including fixed amount subawards as described in §200.333 Fixed amount subawards. This provision does not apply to the acquisition of supplies, material, equipment or general support services.
  7. Changes in the approved cost-sharing or matching provided by the non-Federal entity.
  8. The need arises for additional Federal funds to complete the project.

(d) No other prior approval requirements for specific items are to be imposed by Federal agencies upon universities unless a exception has been approved by OMB. However, PI/PD's are advised to review carefully the terms of the specific grant award and the agency's guidelines prior to making any changes to the budget or program plans.

EXPANDED AUTHORITIES:

(e) Federal agencies are authorized to waive prior approval requirements associated with pre-award costs (incurred up to 90 days prior to the begin date of a new award), no-cost extensions (up to 12 months following the end date of an award), and carry forward of remaining balances to subsequent periods of performance. Please note that not all agencies waive these prior approval requirements. It is important to check the specific requirements associated with your federal award. For more information, see Uniform Guidance 2 CFR 200.308(e).

ADDITIONAL RESTRICTIONS OR LIMITATIONS:

Per Uniform Guidance 2 CFR 200.308 Revision of budget and program plans:

(f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for Federal awards in which the Federal share of the project exceeds the Simplified Acquisition Threshold (as defined at FAR 2.1) and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. The Federal awarding agency cannot permit a transfer that would cause any Federal appropriation to be used for purposes other than those consistent with the appropriation.

(g) All other changes to non-construction budgets, except for the changes described in paragraph (c) of this section, do not require prior approval (see also §200.407 Prior written approval (prior approval)).

PI/PD's are instructed to consult the terms of their award and the agency's guidelines in order to ascertain their agency's policy regarding these additional restrictions or limitations.

CONSTRUCTION AWARDS:

(h) Guidance related to construction awards (and awards involving both construction and non-construction) can be found at 2 CFR 200.308(h).

BUDGET REVISION REQUESTS:

Per Uniform Guidance §200.308 Revision of budget and program plans:

(i) When requesting approval for budget revisions, the recipient must use the same format for budget information that was used in the application, unless the Federal awarding agency indicates a letter of request suffices.

(j) Within 30 calendar days from the date of receipt of the request for budget revisions, the Federal awarding agency must review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, the Federal awarding agency must inform the recipient in writing of the date when the recipient may expect the decision.

GUIDANCE FOR FEDERAL CONTRACTS:

Federal contracts with educational institutions are to include FAR 52.216-7 with its Alternate II, which incorporates the educational cost principles at 2 CFR 200, Subpart E, including 2 CFR 200.407, which states that “Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or nonallocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs.” Principal Investigators should also review the terms and conditions of the specific Federal contract to determine if any other prior approval requirements apply.

FURTHER INFORMATION:

For questions, additional detail, or to request changes to this policy, please contact the Office of the Senior Vice President for Research or the Office of the Corporate Controller.

CROSS REFERENCES:

Other Policies may apply, especially:

RA22 - Participant Support Costs

Revision History:

  • January 24, 2021 - Policy name updated to include Other Prior Approval Requirements; section added to provide guidance specific to Federal contracts

  • January 10, 2021 - Updated to reflect revision to UG

  • September 18, 2019 - Changed Vice President for Research to Senior Vice President for Research

  • February 26, 2016 - This new policy (incorporating former policy RA04) has been created as part of the policy reorganization brought about by implementation of the Uniform Guidance (2 CFR 200) and republished as RA63.
  • February 24, 2010 - Revised the FEDERAL DEMONSTRATION PARTNERSHIP section, clarifying information and links
  • March 7, 2005 - Editorial changes to correct links
  • February 20, 1998 - Reformatted for GURU from OSP, dated September 1994. Published as RA04.

Date Approved: 

January 18, 2021

Date Published: 

January 24, 2021

Effective Date: 

January 24, 2021