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Can one use leftover grant funding to take a vacation?

Or does leftover funding get returned to the funding agency?

For reference, I am asking about research labs in American universities.

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    It is possible to use some grant money to pay yourself summer salary, which you could then of course spend on anything you wish. However, this is not "leftover" money; it must be allocated for salary already in the proposal. – David Ketcheson Jul 7 '18 at 4:29
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Without knowing the actual laws or seeing the grant proposal, I think I can pretty definitively say no, you can't do that. If it is noticed, it would likely generate an audit of the entire grant. In an extreme case (NSF funding) it could result in jail time as fraud or embezzlement.

However, if the grant is from some private party, the rules might be very loose, though I doubt it.

However, if the topic of study in the grant were somehow related to leisure time or such then what seems like a vacation might actually be research. (We should all be so lucky.)

What happens with unused funds is likely spelled out in the grant itself or in the regulations of the funding agency. They might go back to that agency, or perhaps remain with some other institution.

But vacations? No. Pizza night for the research team, maybe. Unlikely.

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    My experience is only with National Science Foundation grant. Unspent money from these goes back to the NSF. They've been very good about giving"no-cost time extensions" so that I can spend left-over money on research even after the end-date of the original grant. (I think it makes the Foundation look better if the money eventually produces research than if it goes unspent.) But they certainly wouldn't allow spending it on a vacation. – Andreas Blass Jul 6 '18 at 2:44
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    Now, if there is a bit of money left over and the PI decides to use some of it to cover his summer salary (usually legal under NSF grants), and goes on a vacation, it might look like the grant is paying for the vacation. But only to those who don't see the financial reports... – Jon Custer Jul 6 '18 at 12:55
  • @JonCuster From that point of view, the question makes a lot more sense. Totally fair and legal to use the money to finally take the well earned, paid holidays you never had the time for during the original grant period – Karl Jul 6 '18 at 19:06
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    @Karl, I think you misread the comment. If the grant pays the salary it may be ok, but that assumes that the work somehow continues over the period covered by the salary. If the grant pays the airline and hotel costs, you likely have a big problem. Money is fungible, of course, so you may be able to finesse it, but don't leave a paper trail that leads to a lawsuit. – Buffy Jul 6 '18 at 19:13
  • @Buffy I think you are misunderstanding mine. Where do you read anything about flight and accomodation in my comment? :-) – Karl Jul 6 '18 at 19:34
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The standard procedure is to extend the grant by a few months, until the money has been spent for purposes that are within the original purpose of the grant. Usually paychecks for people who are writing an additional paper, or grant proposals for a follow-up project (and perhaps take the remaining paid free days from their original contract, if that was what your question aimed at).

Agencies usually have no use for returned money, and would often have to return it to their funding partner(s). Otherwise the agency would have to find someone new to spend the money on, which they don't have resources for.

If the agencies would not simply extend the grant time, that would lead PIs to try to spend the money last minute, possibly by stretching a few rules. They would have to make extra effort to control those last minute expenses. Even if your scientists stay far for stealing the money for a private holiday, legal quabble would often ensue.

But of course, if you don't ask for extension, there will surely be a clause in the grant that says the money falls back to whoever provided it.

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