Sure, it's fine to add sand. It's going to cloud the water somewhat though, so be prepared. I'd go ahead and add the sand, then wait for things to clear. Then, shake off the sand from the existing rock (it might kind of look like snow-capped mountains) and place it into the tank with the new rock.
As for sand underneath the rock, you really want the rock (at least, what's on the bottom of the pile) to be resting on the tank bottom. So, as you put the rock into the sand, wiggle it a little and wait until it feels firm. This way, you're resting the rock on something solid, rather than something that can shift and cause the whole pile to fall. Fish that move around in the sand, like eels or gobies, can make this even worse.