Some of the reasons why debit balances arise are detailed below, together with the new treatments.
Costs which cannot be recovered from the sponsor but which have been incorrectly charged to the project code. For example, costs classed by the sponsor as inadmissible; costs incurred after the end date of the project; overspends Six months and three months before a project is due to finish, the Research Support & Funding office (RSF) will send the Principal Investigator (PI) a statement showing expenditure versus budget. A copy of this will be sent to the Faculty Research Support Administrator or equivalent (RSA), and to Human Resources (if staff are paid from the project) for information. Before preparation of final expenditure statements (by the RSF) written confirmation of the required action needed to clear the project will be sent by the RSF to the PI and the RSA. Action should be taken on this by the faculty as soon as possible. The eventual financial position will only be known once final income has been received from the funder (this may take several months or in extreme cases up to a year). Any items of expenditure still outstanding at this point will be brought to the attention of both the PI and the RSA. If, after one month, action has not been taken to clear the items, the RSF will send a written reminder to the RSA (copy to the PI). If the items remain on the project after a further two weeks the RSF is authorised to transfer the amounts to the Operating Budget in the PI’s Department. The Department will be notified of this, and it will be the Department's responsibility to decide whether the costs can legitimately be moved to another code.
Staff costs continue to be charged after the official end date of the project. For research staff, the RSF will contact the PI, RSA, and appropriate HR Manager for advice. In the case of technical and clerical staff, the RSF will contact the RSA and PI requesting a different code in order to transfer the costs. If there is no response within one month, the RSF will send a written reminder giving two more weeks. If there is no response at the end of that period, the cost will be moved to the Department's Operating Budget, with notification to the Department.
Refundable to sponsor (e.g. charities) When the project ends, the RSF will write to the Principal Investigator (copy to RSA) stating the balance on the account and asking whether all valid expenditure has been processed. Two months will be allowed as a response time. At the end of the two months a reminder will be sent, again stating the balance. A further two weeks will be allowed before the refund is processed.
Surpluses (Fixed Price Contracts) and exchange gains
Post fEC, surpluses on Fixed Price Contracts will only occur where an element of profit has been built in to the agreed price, over and above the full cost of the research as calculated by PAM (Proposal to Award Management system). An adequate amount of academic staff time must be costed in as well as the correct level of indirect and estates costs. The treatments set out below will only apply where all contractual obligations have been satisfied and overheads (ie indirect, estates, and academic staff costs) have been taken to budget - Balance <£1,000: RSA to decide which account the surplus should be moved to (e.g. Operating Budget Account, Principal Investigator’s “Personal Account”). - Balance £1,000 - £5,000: PI to submit proposal to RSF, via Head of Department, stating how the funds will be spent. For amounts in this bracket, the surplus should normally be used within one year. - >£5,000: PI to submit proposal, including a full budget breakdown, to Dean of Faculty, via Head of Department. If approved by the Dean, the proposal is to be submitted to the RSF and from there to the Director of Finance for final approval.
Note: Projects which have been authorised by the Dean to be accepted at below the full economic cost, cannot treat savings on the direct costs as a credit to be taken. Any unspent direct costs should first be taken to reduce the project deficit on the full cost.
Exchange Losses and Gains
These can occur when dealing with income in any foreign currency. The University submits invoices or claims in sterling, which are then converted to the foreign currency by the sponsor who subsequently remits foreign currency, which is then converted back to sterling at a different rate. Substantial exchange losses and gains have occurred in this way on contracts between the University and the European Commission. The University recognises that such losses or gains are outside the control of the Department undertaking the project and does not wish to deter academic staff from participating in European and other overseas funded research. Therefore the fairest way to manage this is to take all losses and gains which occur as a result of exchange rates to each department's overhead account.