FINANCE PROCEDURES MANUAL - University of … · FINANCE PROCEDURES MANUAL RESEARCH PROJECT FINANCE PROCEDURE Page 1 of 30 UTS Res Proj Fin Proc approved 100909.docx Hardcopies of

FINANCE PROCEDURES MANUAL

RESEARCH PROJECT FINANCE PROCEDURE Page 1 of 30

UTS Res Proj Fin Proc approved 100909.docx Hardcopies of this document are considered uncontrolled please refer to UTS website or intranet for latest information.

RESEARCH PROJECT FINANCE PROCEDURE

Date approved

10th September 2009

Date Policy will take effect

10th September 2009

Date of Next Review

Approved by Vice Chancellor

Custodian title & e-mail address

Mr Michael Pennisi

Manager Strategic Finance

[email protected]

Telephone 02 9514 2866

Responsible Division Financial Services Unit / Research and Innovation Office

Supporting documents, procedures & forms of this procedure

Delegation of Expenditure Authority

http://www.gsu.uts.edu.au/delegations/documents/guidelinesauthorisations.pdf

http://www.fsu.uts.edu.au/forms/Financial-Delegations.xls

http://www.gsu.uts.edu.au/delegations/documents/protocol.doc

Ethical Conduct of Research – Academic and Support Staff Policy

http://www.gsu.uts.edu.au/policies/researchethicpol.html

Commercial Activities Policy

http://www.gsu.uts.edu.au/policies/documents/commercialactivities.pdf

Gift Acceptance Guidelines

To be finalised

HREC policy and guidelines for undergraduate and postgraduate students

http://www.gsu.uts.edu.au/policies/hrecpolicy.html

http://www.gsu.uts.edu.au/policies/hrecguide.html

Outside Work/Consultancy Policy

http://www.gsu.uts.edu.au/policies/outsidework.html

Intellectual Property Policy

http://www.gsu.uts.edu.au/policies/intellectualproperty.html

http://www.gsu.uts.edu.au/policies/ipresearch.html

Policy on research funding by the tobacco industry

http://www.gsu.uts.edu.au/policies/tobaccofunding.html

Research Information Form

http://www.uts.edu.au/research/docs/researchinfoform.pdf

Records Management

http://www.records.uts.edu.au/procedures/index.html

ResearchMaster

http://rmprod.itd.uts.edu.au/rmenet/

Research Strengths Policy

http://www.gsu.uts.edu.au/policies/researchstrengths.html

Research Project Budget Template:

To be finalised




Risk Management Policy

http://www.gsu.uts.edu.au/policies/riskmanagement.html

University Research Infrastructure Costs Policy

http://www.research.uts.edu.au/docs/resinfrastructurepolicy02.doc

Key References & Legislation

Australian Code for the Responsible Conduct of Research

http://www.nhmrc.gov.au/publications/synopses/r39syn.htm

Australian Standard AS/NZS 4360 Risk Management and Handbook HB 436 Risk Management Guidelines - Companion to AS/NZS 4360

Program Guidelines: Cooperative Research Centres Program

https://www.crc.gov.au/HTMLDocuments/Documents/PDF/CRC%20Program%20Guidelines%20(Nov%202008).pdf

National Principles of Intellectual Property Management for Publicly Funded Research

http://www.arc.gov.au/pdf/01_01.pdf

Audience

Staff Intranet – UTS Staff Only

Expiry date




Contents

1 Introduction / Background 4

2 Scope / Purpose 5

3 Definitions 6

4 Flow Chart 9

5 Research project life-cycle 12

5.1 Initiation phase 12

5.1.1 Submitting a grant application 12

5.1.2 Research infrastructure costs 12

5.1.3 Research project budgeting 13

5.1.4 Other considerations 13

5.2 Planning and design phase 15

5.2.1 Setting up a research project 15

5.2.2 Research donations 16

5.3 Execution phase 17

5.3.1 Recognition of research income 17

5.3.2 Expenditure 19

5.3.3 Asset purchases 20

5.3.4 Journal processing 20

5.3.5 Balances 21

5.3.6 Problems with projects, deadlines or payments 21

5.3.7 Management reporting 22

5.3.8 Financial statements 22

5.3.9 Transfers to/from other institutions 22

5.3.10 Change of investigator/industry partner etc 23

5.3.11 Cooperative Research Centres and similar consortia 23

5.4 Finalisation and closure phase 24

6 Roles & Responsibilities 25

6.1 Managerial Responsibility 25

6.2 Other Responsibilities 25

7 Version Control Table 26

ANNEXURE A 27

Risk classes and examples of specific risks for research projects 27




1 Introduction / Background

Research grants and contracts are awarded to the University of Technology, Sydney (UTS) by the Australian Government, State and local governments, foundations, research institutes, companies and international funders. Private donors also contribute to research at UTS. While Faculties and researchers directly manage research projects, research at UTS is centrally co-ordinated by two administrative units:

1. Research and Innovation Office (RIO) is responsible for the administration of research grants and contracts (including processing of applications, grant acceptance, recording and reporting and research policy issues), management of intellectual property and commercialisation of research

2. Financial Services Unit (FSU) is responsible for the accounting requirements of research grants including maintenance of accounts, invoicing of granting bodies and preparation of financial statements and acquittals.

Grants are generally awarded to support specific research proposals. The use of grant funds is governed by the conditions specified by the funders in their funding agreement or their contract documents. In general, income for one research project cannot be used for another research project. Income received from more than one funder for the same project may only be amalgamated in one activity if none of the funders require the expenditure from their funds to be acquitted separately or an explicit cost flow rule has been agreed and adopted by RIO and FSU. Similarly, expenditure for one project should not be charged to another project's grant. UTS distinguishes grants as follows:

1. Research grants from external bodies (External Research). These grants are accepted on behalf of UTS either by the Director RIO (research contracts and agreements to the value of $0.5m) or the Deputy Vice Chancellor (Research) in accordance with the Protocol for Execution of Documents (Standing Delegation of Authority 5.1). All correspondence with the funder is processed by the Director, RIO.

2. Research grants provided by the University (Internal Research). These may be funded through the allocation of central funds administered by the Deputy Vice-Chancellor (Research) (Central Research Budget [CRB]) or by the use of operating funds within Faculties.

There are occasions when UTS and an external body will provide funds jointly for a research project. Special Purpose grants may be awarded to staff members or Faculties/Schools/Units for purposes other than research (e.g. developmental activities) and these are normally administered by the grantee area. The procedures covering the application for, and administration of research, are outlined at http://www.research.uts.edu.au/funding/resources.html and form part of this procedure. Research at UTS is also conducted in accordance with the requirements of the Australian Code for the Responsible Conduct of Research.




2 Scope / Purpose

This procedure applies to transactions relating to activity that satisfies the Higher Education Research Data Collection (HERDC) definition of research:

• creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications

• any activity classified as research which is characterised by originality; it should have investigation as a primary objective and should have the potential to produce results that are sufficiently general for humanity's stock of knowledge (theoretical and/or practical) to be recognisably increased. Most higher education research work would qualify as research

• pure basic research, strategic basic research, applied research and experimental development.

In addition to the activity of people directly engaged in research, research activity also includes:

• the provision of professional, technical, administrative or clerical support and/or assistance to staff directly engaged in research;

• management of staff who are either directly engaged in research or are providing professional, technical or clerical support or assistance to those staff;

• activities of students undertaking postgraduate research courses;

• development of postgraduate research courses;

• supervision of students undertaking postgraduate research courses; and

• higher degree research student training.

The following activities, however, are not classified as research except where they are primarily for the support of, or are part of, research activities:

• preparation for teaching;

• literary and artistic activities such as creative writing (but preparation of an original report on research findings is research);

• scientific and technical information services;

• general purpose or routine data collection;

• standardisation and routine testing;

• feasibility studies (except into research projects);

• specialised routine medical care;

• the commercial, legal and administrative aspects of patenting, copyright or licensing activities;

• routine computer programming, systems work or software maintenance (but research into applications software, new programming languages and new operating systems is included).

Within the framework, this finance procedure specifically describes the financial management of External and Internal Research at UTS over the project life-cycle but excludes the treatment of Special Purpose grants. The Chart of Accounts includes specific research income accounts for use in this connection.




3 Definitions

The following definitions are sourced from:

• Accounting Standard AASB 1004 Contributions

• Australian Taxation Office

• Department of Innovation, Industry, Science and Research

• Financial Services Unit, UTS

• Higher Education Research Data Collection specifications

• OECD Frascati Manual: Proposed Standard Practice for Surveys on Research and Experimental Development, Sixth edition, 2002

Word/Term/ Abbreviation

Definition

ABS Australian Bureau of Statistics Accounting string The segments of the full accounting string are:

02. XXXXXX. XXX. XXXXXXX. XXXXX. 0000. 00 [Company]. [Organisation Unit]. [Location]. [Activity]. [Natural Account]. [Future]. [Intercompany]

Activity The Activity segment of the full accounting string in the Chart of Accounts is used to identify jobs or projects under the control of an Organisational Unit for which revenue and expenses need to be separately identified and monitored. Specific project research grants are captured using the following Activity segment codes:

• 1000000 External Research

Activity numbers follow the format 10 XX XXX [Ext research ID] [Org Unit ID] [Activity ID]

• 2000000 Internal Research

Activity numbers follow the format 20 XX XXX [Int research ID] [Org Unit ID] [Activity ID]

Applied research Original investigation undertaken to acquire new knowledge; it is, however, directed primarily towards a specific practical aim or objective

ARC Australian Research Council Basic research Experimental or theoretical work undertaken primarily to acquire new knowledge of

the underlying foundations of phenomena and observable facts, without any particular application or use in view

Cash balance LTD Net Result adjusted for asset purchases, accumulated depreciation and prepayments

Chart of accounts List of all account names and numbers that go together to produce the full accounting string that provides the structure for financial information at UTS. The chart of accounts is used to: • classify revenue, expenses, assets, liabilities and equity in accordance with UTS’

management structure • ensure that the appropriate people are responsible for the costs that they

control • allow reporting by different categories

Contributions (AASB 1004)

Where an entity receives assets or services or has liabilities extinguished without directly giving approximately equal value in exchange to the other party or parties to the transfer; they include everyday transfers such as gifts, donations, government grants and taxes

CSIRO Commonwealth Scientific and Industrial Research Organisation





Definition

DIISR Department of Innovation, Industry, Science and Research Direct costs Costs specifically and easily identified with the conduct of a research project,

including: • salaries and on-costs of project staff (including academic and technical staff and

administrative support) • scholarships for students • equipment purchase and maintenance • materials and supplies • computing support • consumables • travel and accommodation • services such as photocopying, report production and photography • external consulting services • travel and living expenses

EHS Environment, Health and Safety Experimental development

Systematic work, drawing on existing knowledge gained from research and/or practical experience, that is directed to producing new materials, products or devices; to installing new processes, systems and services; or to improving substantially those already produced or installed

FSU Financial Services Unit Funding agreement Legal document which sets out the arrangements under which a grant is provided,

received, managed and acquitted GST Goods and Services Tax – a broad-based tax of 10% on most goods, services and other

items sold or consumed in Australia HERDC Higher Education Research Data Collection (HERDC) - the annual collection and

reporting of research income to DIISR. Research income that qualifies for the HERDC comprises: • Australian Competitive Grants income (Category One) • Other Public Sector funding (Category Two) • Industry and Other funding (Category Three) • CRC Funding (Category Four)

IGS Institutional Grants Scheme (IGS) - supports research and research training activities. Funding under the IGS is allocated to UTS by DIISR on the basis of a formula that takes into account each institution’s success in attracting research students (30% of funding), in attracting research income (60%) and in the quality and output of its research publications (10%); use of the funds is in accordance with the University’s own strategic judgements

Indirect costs Costs associated with providing the infrastructure necessary to support the research activity undertaken, including utility costs, physical plant operation and maintenance, building use, equipment depreciation and EHS requirements

Infrastructure charge

Overhead charge used to fund research infrastructure levied on research projects not funded through agencies listed on the National Competitive Grants Index (NCGI)

Innovation Innovation is the process that translates knowledge into economic growth and social well-being. It encompasses a series of scientific, technological, organisational, financial and commercial activities. Research is only one of these activities and may be carried out at different phases of the innovative process.

Invoice A document stating the amount of fees payable to UTS for goods or services supplied IP Intellectual Property LTD Life To Date Natural Account This segment of the full accounting string is used to distinguish how, where and why

funds have been received or applied. Accounts are classified into the following types: Income, Expenses, Asset, Liability and Equity

NHMRC National Health and Medical Research Council





Definition

Organisation Unit This segment of the full accounting string is meant to distinguish Faculties and Divisions and cater for their internal reporting and accountability requirements

Overheads Include facilities, administrative, infrastructure and service costs, central administration and academic services such as the library and University IT facilities

Project costing The total cost to the University of undertaking a research project can be thought of as the sum of direct costs and indirect costs (overheads/infrastructure)

Project pricing Where a research project is not covered by a regulated pricing regime, the research project is priced so as to recover, at a minimum, all direct costs and indirect costs; for contract research, there may also be an overhead recovery component and a profit margin

Research and Development (R&D)

Research and development is a term covering three activities: basic research, applied research, and experimental development. It comprises creative work undertaken on a systematic basis to increase the stock of knowledge and the use of this knowledge to devise new applications

ResearchMaster Enterprise research management software RIBG Research Infrastructure Block Grants Scheme –allocated to UTS by DIISR to enhance

the development and maintenance of research infrastructure. Funding under the RIBG scheme is determined on the basis of an institution’s relative success in attracting research income from competitive funding schemes listed on the Australian Competitive Grants Register

RIO Research and Innovation Office Special purpose grant

Grants and donations accepted by the University to finance research or teaching projects, fellowships, scholarship awards and prizes, and also funds received from sources such as endowments, consultancies and publications

Tax invoice A tax invoice is an invoice that contains prescribed items of information: 'Tax Invoice' is stated prominently; date of issue; an invoice number; name of supplier; ABN of supplier; brief description of each thing supplied; an indication of which goods or services don’t include GST and which goods and services include GST; the GST exclusive price, the GST amount and the GST inclusive price for each item. Where the amount payable is above $1 000, additional information needs to be included: name of recipient; address or ABN of recipient; and, for each description, the quantity of the goods or the extent of the services supplied

UTS University of Technology, Sydney YTD Year To Date




4 Flow Chart










5 Research project life-cycle

5.1 Initiation phase

5.1.1 Submitting a grant application

Applications for internal or external research funding, apart from some internal Faculty-based schemes, are made by researchers to the Research and Innovation Office (RIO). The first named Chief Investigator on the application has accountability for the accuracy of the application and, if funded, the overall management of the research project and its budget in accordance with the general financial delegations of the University and any relevant conditions imposed by the funder (including the Faculty). Each Research Grant or Contract Research application submitted to RIO must be accompanied by a Research Information Form (RIF). The RIF is the vehicle whereby RIO collects all the necessary information to review and process the application. The RIF requires certification by the first named Chief Investigator, their academic supervisor, and the Faculty Dean (or equivalent) or delegate. The delegate is usually the Associate Dean (Research) in the Faculty. By requiring this certification, the University ensures there has been proper academic review of the project and proposed budget and that, if successful, the academic unit is committed to making the time and resources available for the project to be undertaken. The data contained in the RIF is also used for ABS and DIISR reporting and for analysis of faculty and university research performance. RIO is responsible for the final approval and submission of the application to the funding organisation. The Director RIO has authority to submit funding proposals up to $1m in value; all other proposals require the authority of the Deputy Vice Chancellor (Research) or alternate, in their absence. In most cases, externally funded research must be fully costed. RIO will consult with the relevant Faculty finance and research support staff to determine whether or not indirect costs or overheads are applicable and, if so, whether they have been applied appropriately. All contracts must be accompanied by a complete and accurate budget spreadsheet showing the breakdown of costs. Where overheads are waived or included at a reduced rate, written approval from the Deputy Vice-Chancellor (Research) must be included.

Competitive neutrality

Competitive neutrality refers to the principle endorsed by the Commonwealth Government and all State and Territory Governments that no government-owned business should enjoy a net competitive advantage simply by virtue of its public sector ownership. Therefore, universities must charge full direct project costs plus any added costs which would be faced by a private sector provider of similar services, but from which government providers are exempt or face lower costs due to government ownership.

5.1.2 Research infrastructure costs

The standard rate for University Research Infrastructure Costs charged to research projects is set from time to time by the Vice-Chancellor who also determines the appropriate distribution between Faculties and the amount to be retained centrally. Granting bodies on the National Competitive Grants Index are exempt from the charge. In other cases, the current rates are 25% for non-laboratory based research and 30% for laboratory based research. RIO is allocated 6% of this charge for the preparation of contracts and the provision of other research support services. The Faculty is allocated 19-24% of the charge with no less than one-third distributed directly to the researcher on “… satisfactory submission as to how the funds … [will] be used for infrastructure support




for their research.” The Faculty charge may be waived by the Deputy Vice Chancellor (Research) on the Dean’s recommendation to the Research & Innovation Office.

5.1.3 Research project budgeting

Project budgets are an essential component of grant applications. These can be developed in conjunction with Faculty finance and research support staff. To further assist researchers prepare budgets for their research projects, a Research Project Budget Template has been developed that assists with the calculation of income and costs including salaries, on-costs and projected salary increases. This information is entered into ResearchMaster.

5.1.4 Other considerations

Risk management

Like other projects, research projects may be subject to a number of risks. The University requires that these risks be identified and managed in accordance with Australian Standard AS/NZS 4360 Risk Management and Handbook HB 436 Risk Management Guidelines - Companion to AS/NZS 4360. The classes of risk that need to be considered in the context of research projects are:

• Proposal development

• Human resources

• Finance and economic

• Infrastructure

• Environmental

• Health and safety

• Commercial and legal

• Management control

• Project and operational

Specific examples of the risks that may need to be considered in the development and subsequent execution of a research project can be found at Annexure A. It is important to consider these risks and mitigation strategies during the initiation phase of a research project.

The Research Information Form provides additional guidance on a subset of these sources of risk:

• Human ethics

• Animal ethics

• Genetically modified organisms

• Pathogenic microorganisms

• Imported biological material

• Ionising Radiation

• Cytotoxins

• Chemicals

• Physical

• Work environment

It is a requirement that ethics, biosafety and other clearances specified in the Research Information Form be obtained for research projects before work commences.




Intellectual Property (IP) and other legal concerns

Intellectual Property means all statutory and other property rights (including rights to require information to be kept confidential) that are protected by Australian law and international agreements applying to Australia as amended from time to time. Unless otherwise agreed, UTS asserts ownership of all Intellectual Property created or developed by a staff member in the course of his/her employment and asserts ownership of student IP under circumstances identified under the UTS IP policy. Under no circumstances should staff or students, other than those specifically authorised by the University, enter into binding negotiations, or come to agreement, with third parties for the commercialisation of research on behalf of UTS. In particular, UTS has a commercialisation agreement with UniQuest Pty Limited, the technology transfer company of the University of Queensland. Negotiating contracts, commercial partnerships and other deals requires the professional expertise provided by RIO. In working with external partners to develop research projects and funding applications, researchers must not pre-empt the University's negotiation of contracts by intentionally or inadvertently making commitments on behalf on the University.

Confidentiality requirement

Some projects may be affected by a confidentiality agreement. If a project is not clearly identified as confidential, details of the project will be visible on ResearchMaster and in UTS Library repositories. A disclosure of Confidential Information may be necessary in the course of discussions or negotiations with an external partner, a potential licensee or an investor. Staff members and students must not disclose confidential information relating to UTS IP without the approval of the RIO Director or a RIO Commercialisation Manager. Such approval will normally require that a signed Confidentiality Agreement is in place. The signature of staff and students who are IP inventors or creators (staff and/or students) will be required as evidence of their agreement to abide by the conditions of the Agreement. Staff members and students must not receive Confidential Information from another person without that being preceded by a signed Confidentiality Agreement.




5.2 Planning and design phase

5.2.1 Setting up a research project

Successful projects are accepted by the University by the execution of a research funding contract with the funder. RIO prepares a UTS Establishment Letter for the researcher. RIO is responsible for the negotiation and execution of the contract. In this process, it liaises both with the researcher and the funding organisation, as necessary. UTS Legal provides advice on non standard terms and conditions. The Director RIO has authority to execute research contracts and agreements to the value of $0.5m; all other contracts are executed by the Deputy Vice Chancellor (Research) or alternate in their absence. If the research is part of a shared grant and there are investigators other than UTS investigators named on the grant, UTS and all other organisations involved in the research enter into a shared grant agreement which identifies how the financial resources will be distributed, spent and reported. FSU will send an e-mail advising the project activity number to RIO and the relevant Faculty. The organisation unit and activity segments of the full accounting string are advised to the grantee and Faculty office. The full accounting string is used to record transactions relating to the grant and is to be used on all documents for financial transactions including purchase requisitions, all employment contracts, payment request forms and application to travel forms. The activity segment is recorded in ResearchMaster. Most grants are not awarded the full amount requested so the project budget will need to be updated by the researcher and entered into ResearchMaster when that functionality becomes available. Until that time, revised budget details are to be provided to RIO by email. In these cases, researchers need to review the research project expenditure and work out what component(s) can be reduced. The amount of time it takes for a grant to be set up depends on the completeness of the information provided to RIO. If all the required information has been provided, funds will normally be available to the researcher within two to three weeks of receipt by RIO of the finalised contract, that is, a contract that has been fully executed by all parties. RIO coordinates the collection of project and records management information including:

• An original proposal or application

• Correspondence to the effect that the funder has awarded the grant

• Any contract or agreement that relates to the project

• Complete and up-to-date budget

• Any other relevant correspondence, particularly from the funder

• Ethics approval, if applicable

• If the research is covered by a sub-contract or secondary contract, then a copy of the full original or primary contract to which it refers

• If the money is a donation, then there should be some evidence that the donation was given for the express purpose of carrying out ‘research’

• If the grant is subject to indirect costs/overheads as per the ‘University Research Infrastructure Costs’ policy and the overheads have not been included or included at a reduced rate, then an official request to waive these costs to the DVC(Research) must be received.

If the research is part of a multi-institutional agreement and there are investigators who are not at UTS, UTS and all others involved in the administration of the project are required to enter into a shared grant agreement before any funding can be released. This is undertaken by RIO.




5.2.2 Research donations

The Development Office manages the relationship with UTS’ donors and prospective donors. All research donations should be handled in accordance with the University’s Gift Acceptance, Processing and Disbursement Guidelines. In the case of grants from philanthropic organisations, funds are processed by RIO in consultation with the Development Office. In the case of research donations directed to a specific research program, those donations can be aggregated within a single research activity by a Faculty subject to the following conditions:

• All donations are accompanied by a letter that includes

o a clear statement of the purpose of the donation

o no specification of deliverables

o no reporting requirement

o no claim to intellectual property

o details regarding invoicing, where necessary

• For the establishment of a research activity, the first donation letter received needs to be forwarded to RIO with an abbreviated Research Information Form that includes Faculty approval

On receipt of the first donation letter and the abbreviated RIF, RIO will arrange for the creation of an External Research activity with a title that reflects the nature of the research program to be undertaken by the researcher. Each research activity will be reviewed by RIO and FSU, in consultation with the researcher and relevant Faculty, every two years after its creation to monitor spending against the activity and determine whether the activity needs to remain open.




5.3 Execution phase

5.3.1 Recognition of research income

External funding In accordance with Accounting Standard AASB 1004 Contributions, grants are recognised as income when the University obtains control over the assets comprising the grants (e.g. cash, equipment), irrespective of whether conditions are attached to the grants or whether the grant relates to the current or future financial years. Control over granted assets would normally be obtained upon their receipt. Where there is a condition that unspent funds are returned to the funder on completion of the grant, the unspent balance remaining on completion will be recognised as an expense of the year in which the funds need to be returned. If the refund cannot be made prior to the end of the financial year, the amount to be repaid is expensed in the year and recognised as a liability of the University. If there is no requirement to repay the unspent amount, then it will be transferred to CRB or the relevant Faculty’s operating funds at the discretion of the Deputy Vice-Chancellor (Research) after consultation with the relevant Associate Dean (Research) and the researcher. Internal funding Internal research funds from CRB are allocated on the basis of approvals by the Deputy Vice-Chancellor (Research), normally for a period of two years. As a general rule, if expenditure by a researcher at 31 December exceeds the allocation, the excess will need to be funded from operating funds. Likewise, savings are carried forward but only for research projects whose term hasn’t expired by the end of the year. Any unspent funds at the end of the grant period will be transferred back to the Central funds of the University. The policy of recognising carry-forwards for Internal Research Only activities is a matter agreed upon between the Deputy Vice-Chancellor (Research) and Deputy Vice-Chancellor (Resources). Revenue Natural Accounts The initial receipt of research income is credited to one of the following accounts (listing as at May 2009 and subject to periodic review):

Account # Account name

41145 Grants Research - Commonwealth Schemes

41150 Grants Research - C'wealth Other/Non Schemes

41165 Grants - DEST - Research Infrastructure Block Grants

41170 Grants - DEST - Institutional Grants Scheme

41205 Grants - ARC - Discovery Projects

41206 Grants - ARC - Discovery Indigenous

41207 Grants - ARC - Linkage Infrastructure

41210 Grants - ARC - Linkage Projects

41212 Grants - ARC - Federation Fellowships

41215 Grants - ARC - Research Fellowships

41217 Grants - ARC - Special Research Initiatives

41220 Grants - ARC - Linkage International

41222 Grants - ARC - Linkage Research Networks

41224 Grants - ARC Shared Grants - Centre of Excellence

41225 Grants - ARC Shared Grants - Research Networks

41226 Grants - ARC Shared Grants - Discovery Projects




Account # Account name

41227 Grants - ARC Shared Grants - Linkage Infrastructure

41228 Grants - ARC Shared Grants - Linkage Projects

41229 Grants - ARC Shared Grants - Linkage International

41260 Grants Research - NSW Government

41261 Grants Research - Other State Governments

45210 Grants Research - Aus Industry

45215 Grants Research - International Funding

45220 Grants Research - Local Government

45225 Grants Research - Coop Research Centre Funds

45230 Grants Research - Non Commonwealth Schemes

45235 Research Other – Donations

Consulting income is not to be included as part of research income. Private consulting is undertaken for remuneration by a staff member in his or her personal capacity as an individual, as opposed to his or her capacity as staff member of the University; it makes no use of University resources or the reputation of the University and all liability is taken by the staff member. Approval for personal consulting may be granted through the procedures identified in the Outside Work (Academic Staff) Policy and the Vice Chancellor’s Operational Directive Outside Work (Academic staff). University consulting covers the provision of professional services to external parties for remuneration which makes use of any of the following: the University’s name; services; space; facilities; equipment or paid work time. In the case of University consulting undertaken by UTS employees, it needs to be transacted through the UTS controlled entity, accessUTS Pty Ltd. Invoicing Ideally, a funding agreement would provide that payment for the grant be made in advance to the University, preferably as a single payment. In reality, payments are received as either a single payment or over a period and are either based on a time schedule or the satisfactory completion of milestones. UTS will invoice in accordance with the terms and conditions associated with a funding agreement unless there are extenuating circumstances. It is important that, where a funding agreement requires invoices to be sent following project performance and/or progress reporting milestones, that FSU is advised so that an invoice may be promptly raised. Research Accounting staff from FSU, together with RIO and Faculty finance staff, may contact Chief Investigators directly to confirm milestone completion. It is important that, where delays in the project are occurring and milestones have been revised or completed inadequately, FSU and RIO are advised and ResearchMaster is updated. UTS has agreements with some funding bodies where UTS is not required to raise an invoice for the receipt of grant payments. Instead, the funding body may issue a tax invoice related to the supply of research reports at the time they are issuing the funds. Such invoices are referred to as Recipient Created Tax Invoices. Individual researchers, Faculties, Institutes, Schools and Centres are not permitted to raise UTS invoices for funds related to research projects. All invoicing will be done by FSU on receipt of a copy of the contract or other supporting documentation. Where an invoice cannot be raised by FSU, the relevant Faculty office will be advised of the reason via e-mail. When the actual income (cash) is received from the funder, FSU credits it to a debtor's account for that particular funder. The balance of this account is the total amount owed by this funder across all projects less its payments to the University. This balance is monitored by FSU and any action required to obtain the funds (for example, issuing an invoice or providing a financial statement) is carried out by them.




Budget variations Where the amount granted for a project is significantly below that requested, RIO institutes a budget recasting process with the relevant Faculty that allows a Faculty to authorise revised project objectives and projected outcomes. On occasion, where these variations are material, RIO may need to consult with the researcher to determine whether contractual obligations are able to be met and determine whether revisions need to be communicated to the funding agency. In some cases, a formal variation approval is sought. UTS is seeking to implement systems that facilitate an online budget recasting process. Allocation of income There are separate processes for the allocation of research income depending on its source:

• Australian Research Council (ARC)

FSU updates the ARC file based on the ARC monthly report. Income is transferred via journals to a research activity or activities based on the information supplied in the ARC report. Where an activity has not been set up in Oracle for a specific ARC activity, funds are recorded against the appropriate income faculty suspense account until the activity is established.

• RIBG and IGS (Central Research Budget – UTS funded)

RIO allocates most RIBG and IGS funds to activities as part of the budget cycle as approved by the Deputy Vice-Chancellor (Research).

Unallocated funds are applied by the Deputy Vice=Chancellor (Research) to activities during the year using a standard RIBG/IGS template. Using this template, FSU journals the income that has been allocated in the current month to activities and adjusts income and expense budgets accordingly in Oracle.

• Invoiced directly to individual research activity

FSU raises scheduled invoices to funders through Accounts Receivable and records the revenue directly against the appropriate activity / natural account. Where a new activity has not been set up in Oracle, funds are recorded against the appropriate income faculty suspense account until the activity is established.

Receipts of block grants or sums will usually be credited, in the first instance, to an income clearing account and subsequently transferred to the relevant activity and natural accounts.

5.3.2 Expenditure

The grant will be managed by the first named Chief Investigator with support from the relevant Faculty office. The full range of expenditure accounts from the University’s Chart of Accounts is available to all research projects. The Faculty Finance Manager/Officer or the Research Accountant in FSU can be contacted, if advice is needed. Expenditure should be charged to a research activity during the contracted grant period and finalisation phase for the project. In addition, expenditure should be incurred in compliance with University policy and in accordance with the final grant budget recorded in ResearchMaster. Only expenditures types approved in the grant contract should be charged against the research activity. For a type of expenditure not specified in the original budget, approval may need to be sought from the granting body. In such circumstances, RIO should be contacted to assist with the submission for the necessary approval. Written permission should be sought in advance of expenditure being incurred which means that sufficient time needs to be allowed for this procedure.




It is important that expenditures are charged to the correct research activity during the contracted grant period. Bulk transfers of unexpended funds from the account to clear the balance are not normally allowed.

Employing staff

Where a research project requires the employment of staff, this must be done within UTS’ recruitment and employment policies and the relevant Staff Agreement. There are clearly defined procedures which must be followed to ensure that funds are available to cover personnel cost and that the correct level of appointment is offered. Staff must be employed in accordance with UTS salary scales and conditions of employment. Usually, the amount awarded for Fellowships and some other directed salaries is less than the UTS salary for that level of position. In these circumstances, the researcher will need to consult with the relevant Associate Dean (Research) regarding the means by which any funding gap will be addressed.

5.3.3 Asset purchases

When purchasing assets, the UTS Procurement Policy and Directives and the Register of Standing Delegations need to be read in conjunction with the Property, Plant, Equipment and Intangibles chapter of the Finance Procedures Manual and reference should be made to the PP & E Identification and Classification Guidelines. Capital items of $5 000 and over are capitalised into the University asset register. General asset purchases of equipment include the following types of items: computer hardware, computer software, scientific equipment, furniture, motor vehicles, audio visual equipment, photocopiers, data projectors, security equipment, networking equipment and networking installations. Where assets are purchased in accordance with the revised budget for an external research grant, the asset needs to be coded to the appropriate Activity and Natural Account segments of the full accounting string for the research project. Ideally, the asset will be depreciated with an effective life that coincides with the life of the research project. In the event that the effective life of the asset extends beyond the research project life, the Research Accounting Section in FSU should be contacted to ensure that the correct ongoing accounting treatment of the asset against the research project. Asset purchases funded by RIBG and other centrally allocated Internal Research funds are coded to the Central Research Budget organisation unit. Faculty funded asset purchases need to conform to the procedures detailed in the Property, Plant, Equipment and Intangibles chapter of the Finance Procedures Manual.

5.3.4 Journal processing

Within UTS, there are three sources of journal(s) for posting against research activities:

• FSU

• RIO

• Faculty finance areas Journals are submitted to the Research Accountant in FSU and need to be accompanied with a justification before they are processed. The Research Accountant reviews the journal, signs it off and posts it in the ledger. Correcting journals can be raised for either income or expense. In cases where the original posting had been incorrectly processed, a correcting journal can be created to ensure that income and or expenditure is recorded against the correct organisation unit, activity and/or natural account segment of the full accounting string. These transactions should be clearly identifiable and must have been incurred within the grant period. Expenditure charged to a research project may be subject to review by auditors and it




is important that transactions are charged only to projects to which they relate and are in accordance with the grant conditions and/or grant budget.

5.3.5 Balances

Carry-forward conditions are normally specified in funding agreements. For grants where the conditions do not allow a carry-forward, it is important for researchers and Faculty offices to monitor expenditure on the research activities to ensure that all expenditure relating to the project is incurred before the grant terminates. Also, where circumstances have arisen that delay a project and subsequently affect expenditure patterns, a request to extend the grant period should be made in advance of the original contract end date. Some grants require a written request to be made to carry forward unexpended balances, even though the grant continues into subsequent periods. In particular, there may be milestone-specific carry-forward requirements. For grants with termination dates of 31 December, any funds remaining on a LTD basis (after adjusting entries) may or may not be available for expenditure depending on the conditions of the particular grant. It is advisable to check the carry-forward conditions because, if expenditure is incurred and later found to not be allowable (say, at the time FSU prepares the financial statement), this expenditure will have to be met from another Faculty source. Where legitimate expenses are incurred in December but payment is not expected until the next month (that is, in the new financial year), the Faculty can request an expense accrual. For grants that terminate on dates other than 31 December, the same requirement applies. For example, if a grant has a termination date of 31 March, and the grant conditions do not allow a carry-forward, then the balance as at 31 March cannot be expended in April. Arrangements to refund a surplus balance to a funder will be confirmed at the time the financial statement is prepared. The surplus balance is confirmed with the Chief Investigator (by way of signature) to the effect that there are no further expenses to be recorded against the activity being refunded. In the event that expense(s) are recorded against the research project following a refund, the Faculty will be held responsible for such costs. All refunds are processed via FSU. Research project overspends (negative LTD cash balance) are the responsibility of the Faculty concerned and any over expenditure remains with the Faculty and must be promptly transferred to another appropriate activity. Alternatively, where the over expenditure cannot be transferred to another activity, it will need to be funded from the Faculty operating expense budget. Periodically, FSU may send the Faculty Associate Dean (Research) a list of overspent accounts for action.

5.3.6 Problems with projects, deadlines or payments

If there are difficulties meeting deadlines which may require renegotiation of milestones, problems with payments or any other difficulties with the administration of grants, RIO and the Faculty office should be immediately advised. Any significant events should be entered into ResearchMaster. It is important that these matters are dealt with as quickly as possible. UTS holds the grant on the behalf of researchers and will need to advise the funding body or industry partner of issues affecting the research work. In all instances, grants management staff will endeavour to renegotiate the grant and deliver a favourable outcome. Overdue income invoices FSU (Accounts Receivables) provides RIO with monthly aged receivables reports on overdue invoices. RIO reviews the circumstances surrounding invoices 60 days and over. Where payment is being delayed because of issues with the conduct of the project, RIO will liaise with the researcher and the funding authority in an attempt to resolve them. RIO will make recommendations to FSU in regard to debt recovery, credit notes or write-offs depending on the outcome of those investigations. FSU is responsible for decisions and follow-up action in light of those recommendations. Researchers are specifically advised they are not authorised or encouraged to act as debt collectors or in any way to commit the University in




regard to unpaid debts. Overdue invoices will not be cancelled in order to be re-issued without the prior consent of RIO.

5.3.7 Management reporting

A number of standard financial reports relevant to monitoring research projects are available from UTS’ financial reporting system:

• LTD Research Activity Report by natural account (T3)

• YTD Income Statement by natural account (T7)

• Full Year Income and Expense Statement by Month by natural account (T9)

• LTD Research Activity Report by activity (T14) In addition, ResearchMaster contains LTD actual balances and links to monthly transaction statements for each research project. This information is updated monthly. For overall management of research at UTS, FSU also produce Top Ten reports for UTS and by Faculty. These reports detail the top ten overspent and underspent External and Internal Research projects at the end of each month. Expenditure on research projects is monitored both by the researcher and by Faculty finance staff supporting the Associate Dean (Research). Faculties produce Life to Date financial reports on a monthly basis in order to monitor and control research projects. In addition, transaction reports are produced, where necessary.

Dormant ‘at risk’ research projects

FSU is responsible for the identification and reporting of research projects that have no transactions for three or more years. This data is produced monthly. Activities identified as dormant and potentially at risk of funds return are communicated to RIO for investigation of the circumstances, in consultation with the researcher and relevant Faculty. A recommendation is made in regard to the management of risks that may be discovered.

5.3.8 Financial statements

The requirements for progress and final reporting varies according to funder. The Chief Investigator is responsible for reporting on progress and the outcomes of the research program. Financial reporting is arranged by RIO and, where an accountant’s certification is required, this is provided by FSU. RIO monitors both the progress and financial performance of research projects to ensure they are consistent and to investigate and resolve any irregularities. FSU is responsible for the preparation of all certified financial statements to funders in accordance with the conditions specified in the funding agreement. The financial statements are prepared based on information from the relevant activities and accounts in the University's financial system supplemented with information from the relevant researcher, where required. To enable this function to be carried out effectively, grantees and/or Faculties responsible for management of the grants must ensure that funds are spent in accordance with approved budgets and within the time limits imposed by the grant conditions. It is also the responsibility of grantees and/or Faculties to ensure that the information in the relevant activities and accounts is accurate, up to date at the end of each reporting period and the grant is fully expended at termination. Where the project is complete and funds are unexpended, the refund of this amount is co-ordinated by FSU.

5.3.9 Transfers to/from other institutions

Some grants are awarded to collaborating institutions, with one institution receiving the funds directly from the granting body and funds required to be redirected to another institution. Where the University is




awarded such a grant and a transfer is required to be made to another institution, an invoice should be forwarded by the other institution to FSU Research Accounting Section for payment. Payments to other institutions are facilitated by FSU from the relevant research activity by way of an expense invoice from the other institution. This information is then used to fulfil the University’s reporting obligations to the funder in the case of external grants. If a researcher changes institutions, it is possible that all or some of their external grants may transfer with them. There are several conditions applicable to such transfers, for example, the researcher must remain in employment in an “eligible institution”. In the case of researchers leaving UTS (or coming here), RIO should be contacted for advice. The relevant Faculty will need to manage any active Internal Research projects to completion. In calculating the unspent balance where shared funding exists between government and non-government entities (for example, ARC Linkage grants involving industry partners), the unspent balance is calculated by first applying expenses to government grants then to non-government institutions. Unless otherwise stated in the funding agreement, any UTS internal funds supplied to a transferring activity do not form part of the above calculation. In some cases, the receiving institution is liable for legitimate costs incurred by UTS up to and including the date of the transfer to the new institution as well as any residual project commitments. This needs to be confirmed by RIO and the receiving institution before the transfer balance is effected.

5.3.10 Change of investigator/industry partner etc

If circumstances change – an investigator or other key personnel leaves the project, the industry partner withdraws and so on – RIO should be contacted for advice and changes may need to be made to the project budget. Such changes will need to be advised to the funding body and, in some instances, the terms of the grant or contract will need to be renegotiated or a variation will need to be approved.

5.3.11 Cooperative Research Centres and similar consortia

Cooperative Research Centres (CRCs) are incorporated entities that involve key elements:

• collaborative research

• co-investment of cash and/or in-kind resources by a university partner(s)

• industry funding Under the CRC Program, DIISR provides funding to consortia of universities, publicly funded research agencies, government or professional research bodies and industry. CRCs are characterised by multiple partners, high levels of funding (with co-investment requirements) and complex governance and contractual arrangements. CRCs may also commission research to be done by universities, generally through a research contract. In the case of the CRC Program, all participants must contribute resources to the CRC. The total of these resources, including cash and in-kind, tied and untied, must at least match the amount of funding sought from the CRC Program over the funding period. For the purposes of determining matched funding, a nominal value is used for in-kind staff (covering salary, on-costs and overheads). Where the University is contributing cash to the CRC, RIO is responsible for the payment of invoices in accordance with the Commonwealth and Participant’s agreements. The source(s) of these funds is negotiated with Faculties at the time the University agrees to be a member of the CRC. Funding is provided to the University by CRCs for individual projects and services over varying periods. CRCs have a variety of project application processes ranging from competitive bids to direct funding for




specified research programs. Each project is supported by a project agreement that identifies the scope and expected outputs for each project and a payment schedule. The funding agreement(s) associated with each program specifies the type of costs for which funds can be spent. The Research Accounting Section in FSU is responsible for the financial administration of research projects conducted under these schemes. As the treatment of the accounts for each project varies in accordance with the agreement, RIO and FSU need to be contacted early in the process to ensure that appropriate accounting procedures are implemented. RIO reports annually on CRC performance and responds to any risk issues that emerge.

5.4 Finalisation and closure phase

The end of a research project typically occurs on completion of the final deliverable and submission of the final report for the project. Once the final report is submitted, the project has been finalised and the activity associated with the project has a nil balance, the activity is closed by FSU. Before the activity is closed, the researcher, in consultation with the Faculty office, needs to ensure that:

• there are no current salary appointments against the activity

• there are no outstanding invoices or agreed transfers from other areas

• agreement has been reached regarding the transfer of assets pertaining to the research project

Any over-expenditure will need to be funded by the Faculty and the relevant accounts cleared. Surplus funds may need to be returned to the funder along with the final financial report. As part of the closure phase, RIO will correspond with university partners and subcontractors to ensure there are no outstanding payment claims.




6 Roles & Responsibilities

6.1 Managerial Responsibility

Director (FSU) and Director (RIO) must ensure that the procedure is current.

6.2 Other Responsibilities

Heads of management units are responsible for ensuring that the requirements of this procedure are implemented. The Research Accounting Section (FSU) is responsible for:

• Financial administration of External and Internal Research activities. Primarily, this encompasses the financial administration of External Research activities funded by external funders and includes liaison with Faculty/School/Centre staff in respect of the financial administration of awarded grants. Specifically:

o Preparation of certified financial statements and acquittals for research grants,

o Allocation of grant income to research activities and accounts,

o Invoicing and receipt of grant income from funders,

o Refund of unexpended grant funding to funders,

o Transfer of research grant income to other institutions and co-ordination of the annual Higher Education Research Data Collection - Financial Data.

• Financial administrative support to Faculties in respect of Co-operative Research Centre activities and Research Centres including:

o Establishment of new accounts

o Preparation of acquittals

o Invoicing and receipt of funding

o Advising when a research activity is closed, by way of completing in the “Request for Change” document. In order that IT can update the “DO NOT USE” in the activity description field and the closing end date in Oracle.

• Financial administration of research infrastructure funding, that is, Research Infrastructure Block Grants (RIBG); this includes the following functions - liaison with RIO re the University's financial reporting requirements and allocation of grant income to research accounts.

RIO is responsible for:

• Advice on policy issues

• Assisting academic staff to identify relevant external funding sources and prepare high quality applications

• Advice on preparation of the initial budget and revisions, as necessary

• Review and negotiation of research contracts and agreements

• Setting up research grants

• Management of the grant acceptance process

• Administration of externally awarded funds

• Reporting on research income and expenditure

• Ensuring financial and progress reporting obligations are met

• Finalising the grant The Associate Dean (Research), with the support of staff in the Faculty office, is responsible for reviewing, negotiating and project management of all research contracts and agreements in their area.




7 Version Control Table

Version Control Date Released Approved By Amendment

1.0 May 2009 Director, Financial Services Unit




ANNEXURE A

Risk classes and examples of specific risks for research projects

RISK ISSUE EXAMPLES OF SPECIFIC RISKS

PROPOSAL DEVELOPMENT • Leadership systems

• Upstream supplier systems

• Governmental agency priorities

• UTS facilities program

• Identification of opportunities

• Sufficient project time and resources

• Resource estimates

• Technical/ modelling

• Planning

• Ethics issues

• Review and control systems

• Fit with existing research and Teaching & Learning activities

HUMAN RESOURCES • Availability of key staff - academic; tech support; admin

• Retention of key staff

• Availability of research students

FINANCE AND ECONOMIC • Availability of government funding

• Availability of funding from non-government sources

• Foreign exchange

• Commercial value of IP

• Fellowship funding

• Cashflow

INFRASTRUCTURE • Capacity

• Capex requirement

• R&M

• Information

• Specialised facilities

ENVIRONMENTAL • Pre-existing environmental issues

• UTS-caused environmental issues

• Environmental management systems/plan

HEALTH AND SAFETY • Field work

• UTS EHS systems

• Project health and safety risks





COMMERCIAL AND LEGAL Client - contract research and consultancy

• Credit rating

• Previous problems or difficulties

• Client reputation

• Client tax status

• Strategic issues

• Client sensitivity

Research contract conditions

• Contract type

• Contract value/pricing

• Scope definition issues

• Extension of time provisions

• Termination rights

• Retention of UTS intellectual property

• Goods & services tax clause

• Taxes & Imposts clause

• Variations

• Payment terms

• Specification of deliverables

• Confidentiality

• Dispute resolution

• Indemnities

Subcontractors/suppliers

• Subcontractor/supplier risks

• Contracting entity

• Price validity period

• Payment/contract terms

• Defects liability periods

• Subcontractors/suppliers not locked down

Potential liabilities/limits

• Liquidated damages

• Consequential loss

• Total liability cap

Security

• Bank guarantees/retention

Performance/fitness for purpose

• Warranties back to back with subcontractors/suppliers

• Performance warranty

• Fit for purpose warranty





COMMERCIAL AND LEGAL (continued)

Insurances

• Contract works

• Public liability

• Other insurances

• Exclusions

• Deductibles

Joint ventures

MANAGEMENT CONTROL Project management

• Research project management systems

• Leadership and management of funded research

• New technology or application?

• Availability of plant & equipment

• Reliance on outsourcing/third parties

• Programming/scheduling

• Quality assurance and controls

• Information technology

• Contract management

• Reporting requirements

Interfacing management

• Interfacing with client

• Interfacing with other researchers

• Interfacing with other contractors

• Interfacing with others

Community Issues

• Government

• Public

• Reputation

PROJECT AND OPERATIONAL Design

• Adequacy of research project design

• Ambiguity of design responsibilities

• Adequacy of alternative designs

• Documentation

• Legislative/technical standards




PROJECT AND OPERATIONAL (continued)

Delivery

• Technical

• Innovation

• Approvals/licences/permits

• Procurement

• Storage

• Quality of outputs - publications, research proposals, other

• Testing

• Meeting milestones

• Amount of re-work

Completion

• Final completion

• Knowledge management

Assessment of risk is assessed using the framework in the Research Information Form:

Risk treatment or mitigation is achieved by means of one of the following option:

• Avoid Do not engage in activity that presents the risks

• Manage Reduce risk likelihood Reduce risk consequences Enhance existing controls

• Price Include provision for financing risk in costs or contingency

• Transfer Another party shares some or all of the risk

• Undecided