Suppose you are nearing the end of your grant’s project period and you’ve submitted a renewal application but don’t yet know its review outcome. Should you manipulate how you spend down your remaining funds—either by front-loading your spending so you have none left when your renewal is awarded or by conserving funds so you can persist under a no-cost extension if your renewal application is not funded?
Our advice is: You should continue spending your grant funds normally, as befits your research.
A Common Misnomer
Your current award ending and undergoing closeout does not preclude a renewal award. There is no requirement for continuity. Nor has NIH set a time limit for how quickly a renewal must follow the original award.
For major gaps between projects, peer reviewers may express concern that the science has since shifted and will expect some treatment of that possibility on your part in the renewal application. But having the original award’s project period end before you submit a renewal application isn’t a factor for whether you’ll receive a renewal award.
Remember, though, that not all grant types allow renewal applications, e.g., R21 grants. You can check “Application Types Allowed” in Section II. Award Information of the notice of funding opportunity through which you’ll apply to verify renewals are accepted. Read Apply for a Renewal for further guidance.
Standard Procedures
A different matter is what happens to the original award’s remaining funds when a renewal award begins. Here, it’s helpful to start with some definitions:
- Unobligated funds—The amount of funds authorized under a federal award that the non-federal entity has not obligated. The amount is computed by subtracting the cumulative amount of the non-federal entity’s unliquidated obligations and expenditures of funds under the federal award from the cumulative amount of the funds that the federal awarding agency or pass-through entity authorized the non-federal entity to obligate.
- No-cost extension—An extension of time to a project period and/or budget period to complete the work of the grant under that period, without additional federal funds or competition.
- Carryover—Unobligated federal funds remaining at the end of any budget period that, with the approval of the grants management officer or under an automatic authority, may be carried forward to another budget period to cover allowable costs of that budget period (whether as an offset or additional authorization). Obligated, but unliquidated, funds are not considered carryover.
- Carryover authority—If indicated in the Notice of Award (NoA), a term and condition to indicate the disposition of unobligated balances, stating whether the recipient can automatically carry forward the unobligated balance from one competitive segment to another.
NIH awards’ project periods are typically divided into budget periods for funding purposes. Each budget period runs from the start date to the end date of a funded segment of an award—usually 12 months—during which time recipients are authorized to expend the funds awarded. Unobligated funds that exist at the end of an overall project period when a renewal award is pending are treated similarly to those that arise between budget periods, but there are key differences.
Here, though, assume that NIH has not yet funded a renewal. If the original grant’s NoA authorizes automatic carryover (e.g., most R01s, R25s), you will initiate a no-cost extension for the first segment of the project if you have work remaining in the current project period and funds remaining. Conversely, for awards that do not automatically carryover (e.g., most T32s, U01s), those funds are restricted to be spent in the current budget period by the terms of the NoA, and you’d need to follow the Carryover Requests SOP to request prior approval to use those funds in a new budget period (refer also to Prior Approval Requirements).
When you either complete the no-cost extension or receive a renewal award, you must then complete the final Federal Financial Report (FFR) for the prior segment (i.e., current project period). Note that for a renewal award, NIAID will revise the original award to conclude the project and budget period end dates 1 day prior to the renewal award’s start date.
Under the circumstance that you have a renewal award pending, you will report the original award’s unobligated funds within the FFR. Once NIAID has reviewed and accepted the FFR, the balance will be moved within the Payment Management System (PMS), enabling you to use those funds for the project’s next segment (renewal project period) if you have carryover authority. Absent carryover authority, you’ll need to request and receive NIAID’s written prior approval to then draw down the funds from PMS.
Note that we do not reduce the renewal award’s funding proportionate to any funds carried over from the original award. To address this article’s overarching question: In most cases, you aren’t wasting money by beginning the renewal award with funds left unspent under the original award.
If you aren’t sure whether your award provides automatic carryover authority, check the Notice of Award (Section III. Standard Terms and Conditions) in eRA Commons or ask the grants management specialist assigned to your award for help. Finally, remember that submitting complete and timely FFRs is an important step to ensure NIAID’s prompt review and consideration of carryover requests.