• Section 1 - Purpose and Scope
• Section 2 - Process and Key Controls
• Section 3 - Key Requirements
• Part A - Pre-Award
• Part B - Acceptance and Establishment
• Credit Risk Assessment
• Project Account Creation
• Pre-invoicing
• Contractual Arrangements
• Part C - Post-award Management
• Project Account Update
• Project Financial Planning and Monitoring
• Payments to Collaborator Institutions
• Expenditure
• Other Research Transactions
• Prepayments
• Research Infrastructure Services
• Collaborative Research Services
• Income
• Debt Management and Recovery
• Interest on Grant Funds
• Indirect Costs
• Margins
• Refunds
• Project Maintenance
• Financial Adjustments
• Project Exceptions
• Higher Education Data Collection (HERDC) Reporting
• Part D - Project Close and Reporting
• Project Close
• External Financial Reporting
• Section 4 - Roles, Responsibilities and Accountabilities
• Section 5 - Monitoring, Review and Assurance
• Section 6 - Recording and Reporting

Section 1 - Purpose and Scope

(1) The University of Queensland (UQ or the University) derives research income from multiple public and private sources including federal, state and local government, industry, foundations and donors. Research funding is provided to UQ via contract research and research grants.

(2) This Procedure outlines UQ’s requirements for the effective financial management of research funding to ensure that:

1. the revenue and its related expenditure is managed and recorded appropriately in the financial statements;
2. the research funding has been used in accordance with the grant and contract conditions, and the University’s policies and procedures; and
3. the University can effectively discharge its financial compliance and external reporting obligations.

(3) This Procedure applies to all UQ staff who are responsible for or involved in the financial management of contract research and grants.

Section 2 - Process and Key Controls

(4) The process for financial management of contract research and grants comprises four distinct phases:

1. Pre-award.
2. Acceptance and Establishment.
3. Post-award Management.
4. Project Close and Reporting.

(5) Multiple parties across UQ work together across these phases in order to facilitate effective financial management and acquittal of research funding. These include:

1. The Research Office – responsible for advising researchers on budgets and ensuring compliance with UQ and funding provider budget policies, overseeing funding submissions, managing research agreements, and facilitating project variations. The Research Office is also responsible for maintenance of the relevant research policies including Administration of Research Funding - Applications, Grants and Contract Research Policy and Research and Consultancy Costing and Pricing Procedure.
2. Contract and Grants Accounting (CGA) within Finance and Business Services - responsible for financial project account establishment, maintenance and close; recording and billing of research income, and external financial reporting.
3. The Chief Investigator, assisted by the Finance Advisory and Transactional teams - responsible for financial budgeting, planning and expenditure approval and expense management of research funds in accordance with contract conditions.

(6) A financial project is required to be established in UQ’s financial system (UniFi) for every research contract or grant to enable:

1. effective identification and recording of the project income and expenditure; and
2. the acquittal of research funding for financial reporting purposes.

Section 3 - Key Requirements

(7) The overall process of financial management related to contract research and grants consists of the following key activities:

Part A - Pre-Award

(8) The Chief Investigator, or their nominee, prepares the project budget and submits the funding application to the Research Office for approval in accordance with the Research and Consultancy Costing and Pricing Procedure and Administration of Research Funding - Applications, Grants and Contract Research Policy.

(9) The Finance Advisory Professional Services team (PSt) is available to provide financial input and advice on a needs basis to support the Chief Investigator in the development of the funding application budget. Finance Advisory input and responsibilities takes cognisance of existing research administration support and local roles and is prioritised on a risk basis.

Part B - Acceptance and Establishment

Credit Risk Assessment

(10) A process of credit risk assessment for new domestic industry contracts exceeding $250,000 in contract value, is undertaken in accordance with the Credit, Pre-billing and Collection Procedure.

Project Account Creation

(11) Following approval of a funding application by the external funding body:

1. Contract and Grants Accounting (CGA) in Finance and Business Services creates a finance project account when a project is afforded a “Pending Contract” or “Approved” status in the research system by the Research Office on receipt of the funding notification.
2. The project account is created in UniFi with a “Pending-GRL” status for those require early project account access or “Approved” status, and the Chief Investigator is notified of the new account.
   
   In unusual circumstances, where contracts are considered a high risk for early project account access, they will be flagged in the research system by the Research Office and the finance project account will not be available for early use. 
   
   For early access project accounts, expenditure cannot be incurred until all contractual and compliance obligations have been met. Examples of such obligations include, but are not limited to, the project start date passing and completing required compliance obligations (e.g. ethics). Further guidance can be found in the Early Account Opening for Research Projects - Troubleshooting Guide for UQ Researchers.

(12) The Finance Advisory PSt will:

1. Plan the project income and assign access to the project for the Chief Investigator in MyBalance;
2. Monitor and regularly report spending on projects with a “Pending-GRL” status to the Head of School (or equivalent). The Head of School (or equivalent) may elect to stop the unit spending on a project where there is a high risk that the contract will not be approved.

Pre-invoicing

(13) Where contractually required or requested by the funder, invoices can be raised in advance of the GRL (and executed contract) by Contract and Grants Accounting once a Research master number has been issued by the Research Office.

(14) In instances where the financial project code has been opened, income will be reflected in the “Pending-GRL” project account.

Contractual Arrangements

(15) In the process of reviewing, drafting, and negotiating contract research, Research Partnerships Managers, the Research Office, and/or UQ Legal Services must ensure adequate consideration of financial items within agreements in line with relevant policy and/or procedures and with the assistance of the ‘Guidelines for negotiating financial contract clauses’ on the Research Grants website.

(16) For contracts requiring the funding provider to deposit directly into UQ’s bank account without billing (Recipient Created Tax Invoices or RCTI), the Research Office will provide the UQ Banking Details Form to the funding provider at the contracting stage to ensure that adequate payment reference details are provided by the funding provider.

Part C - Post-award Management

Project Account Update

(17) The receipt of the Grant Record letter (GRL) triggers an update of the project financial account by Contract and Grants Accounting and results in a change in status of the project with early account opening in the financial system from “Pending-GRL” to “Approved”.

(18) If a research grant involves collaboration internally across organisational units, multiple projects can be created and linked via a summary project for reporting to the grantor. A Split Site Form needs to be completed to generate the additional project/s.

Project Financial Planning and Monitoring

(19) Upon receipt of the GRL and supporting documents, the Finance Advisory Pst will initiate a meeting or communicate with the Chief Investigator to assist in developing the project financial plan. They will input the project financial plan into the organisational unit’s Budget Workbook by reviewing the Project Detail Report (staff login and appropriate access level required) notes regarding the project's financial reporting requirements and the budget spending rules.

(20) The Chief Investigator is responsible for decision-making regarding how funds will be spent on a research project, within the constraints of the awarded budget, and for approving any subsequent changes to the project financial plan.

(21) The Chief Investigator has access to MyBalance and is responsible for reviewing actual project expenditure in comparison to project financial plans on an ongoing basis during the project and engaging the Finance Advisory PSt in required changes to project financial plans.

(22) The Finance Advisory PSt will review actual project expenditure on an ongoing basis throughout the life of the project, in comparison to project financial plans, funding rules and updated forecasts. Finance Advisory PSts must prioritise their review based on higher risk and complex projects and those in their final year, with the overall objective of quarterly interaction with Chief Investigators to revisit project financial plans.

(23) Supported by the Finance Advisory PSt, the Chief Investigator must engage with the Research Office for advice should changes to financial plans indicate the potential need for funder approval of project variations.

Payments to Collaborator Institutions

(24) When the University collaborates with another institution on a research project, a Collaborative Research Agreement (CRA) or Multi-Institutional Agreement (MIA) must be established to formalize the transfer of funding.

(25) Standing Purchase Orders are raised in UniFi for the whole of life contractual commitment by the Finance Transactional PSt, on instruction from the Finance Advisory PSt based on the collaborative agreement.

(26) When individual tax invoices are received from collaborators over the life of the project, payments are made on approval of the Chief Investigator that the services have been delivered by the collaborator institution.

Expenditure

(27) The Chief Investigator should be assigned the Budget Holder role in the UniFi financial system for their research project.

(28) The Chief Investigator is accountable for the management of the project expenditure; and must ensure that funds are spent in accordance with funding conditions, for a valid project purpose and within the time limits imposed by the grant or contract conditions. MyBalance provides the Chief Investigator with the necessary financial information to discharge these responsibilities.

(29) The Chief Investigator may delegate the UniFi Budget Holder activities to an authorised proxy (see Financial Management of Research Contracts and Grants - Researcher Guidelines for Budget Holder Proxy) under defined conditions and with the necessary approvals. The accountability under clause 28, however, remains with the Chief Investigator.

(30) The Finance Advisory PSt is responsible for supporting and advising the Chief Investigator and researchers in budget management and compliance with contract financial conditions.

(31) The Finance Transactional PSt is responsible for research project expenditure transactional processing in accordance with contract conditions.

(32) It is the responsibility of the Finance Advisory PSt to ensure that the project expenditure is accurate and up to date at the end of each reporting period.

Other Research Transactions

(33) There are expenditure transactions related to contract research and grants that fall outside the norm. The following provisions offer additional guidance to support effective management of these transactions.

Prepayments

(34) For contract research and grants, prepayments of research expenses before services are rendered are not permitted. This would include internal or external prepayments for speculative future expenditure of services, salaries or consumables. Allowable payments in advance include such items as deposits on the eligible procurement of infrastructure items, milestone payments for works that are contractually bound and where delivery of a full service occurs over multiple milestones, formal grant collaborator payments, and advance bookings for travel.

Research Infrastructure Services

(35) Research Infrastructure Services are internal or external services provided by University-owned and operated equipment and research infrastructure to support delivery of contract research and grants. Fees should be charged for internal services on a fee-for service basis and these costs are charged against the research projects through the use of journals or Internal Services Charges (ISCs).

Collaborative Research Services

(36) Research collaboration within the organisation is encouraged, with income allocated using the split-site funding method and actual expenditures charged directly to the project. For eligible costs incurred by a staff member not named as an investigator, and where the split-site funding method does not apply, costs should be transferred to the project account via Internal Services Charge or journal, approved by the Chief Investigator. Costs must retain their original nature when charged to the project.

(37) Unless specifically budgeted for and contractually approved, UQ Researchers are not permitted to charge their services to a UQ research project as an individual consultancy fee. Services provided into a research project are deemed to be research services. Transfers of UQ research funds are therefore not generally permitted into individuals’ UQ Academic Consultancy and Award (ACA) accounts.

Income

(38) Invoices for all contract research and grants are raised by Contract and Grants Accounting in accordance with contract conditions. The Chief Investigator will be requested to confirm completion prior to billing, if the billing is conditional upon performance or progress reporting milestones.

(39) The Finance Advisory PSt is responsible for ongoing monitoring and follow-up of outstanding milestone confirmations and unpaid invoices.

(40) Income is recorded in the project financial account when income is deposited or when UQ raises an invoice to the funding provider.

(41) It is the responsibility of both the Finance Advisory PSt and the Chief Investigator to monitor unpaid invoices through the use of MyBalance. In the event that the grantor fails to pay the invoice, it is the responsibility of the Chief Investigator to monitor and ensure that the project expenditure does not exceed the amount receipted for it.

Debt Management and Recovery

(42) Debt management and recovery is primarily led by Accounts Receivable (AR) in FBS and requires input and information provision by the Research Office, Chief Investigator, Finance Advisory PSt, Heads of School and School Managers as applicable. Debt management and recovery processes are conducted in accordance with the Credit, Pre-billing and Collection Procedure.

Interest on Grant Funds

(43) The University typically does not agree to clauses in contracts that require the interest earned on the grant funds to be deposited back to the project.

(44) For non-negotiable interest clauses initiated by the funding body, the system will calculate interest based on the monthly available cash balance of the project and allocate the interest earned using the third-day average bank rate.

(45) UQ staff members should not request the inclusion of an interest clause in the agreements with the funder.

Indirect Costs

(46) Contract and Grants Accounting is responsible for the distribution of all research indirect costs (overheads) as per the GRL and according to the Research and Consultancy Costing and Pricing Procedure through monthly journal entries.

Margins

(47) In instances where contracts contain margins that are required to be distributed back to the School, Centre or Research group in accordance with local area rules and budget management principles, it is the responsibility of the Finance Advisory PSt to process the necessary journal adjustments to the project account, over the life of the contract.

Refunds

(48) Contract and Grants Accounting is responsible for the return of unspent research income in instances where the University is contractually required to refund (also refer to ‘Project Close’ provisions).

(49) Contract and Grants Accounting is responsible for initiating payment of the refund to the funder on receipt of a tax invoice. The unspent balance is held as a liability until the funds are repaid to the funding provider.

Project Maintenance

(50) When a need for a project change is identified, the Chief Investigator must consider whether contract conditions require a formal project and contract variation. The Finance Advisory PSts’ input can be sought, together with that of the Research Office.

(51) Contract and Grants Accounting is responsible for finance project maintenance which is conducted based on either a GRL re-record letter (for formal project and contract variations) received from Research Office or through completion of the digital Project Change Request Form by the Finance Advisory PSt. The Project Change Request Form can be utilised for the following changes:

1. Underwriting account;
2. Fund code; or
3. Opal unit.

(52) The Split Site Form is used to split research income across different project codes.

(53) Changes to project short title and Budget Holder are managed directly by the Finance Advisory PSt.

Financial Adjustments

(54) Income and billing adjustments to research projects are processed only by Contract and Grants Accounting by the creation and approval of an Adjustment Note or journal.

(55) Other financial adjustments and internal charges to projects are processed by the Finance PSts by means of journal entries or ISCs and in accordance with the Journal Entries Procedure. Specific conditions pertaining to research projects are highlighted in the Procedure.

Project Exceptions

(56) MyBalance and Business Objects exception and informational Reports should be used by the Finance Advisory PSt to assist in managing contract research and grants. A MyBalance Management Reports User Guide and Research Project Financial Management Reports User Guide is available to assist Finance to use these reports effectively.

(57) Finance Advisory PSts are responsible for accessing these reports on a regular basis for review, monitor, follow-up and/or action based on report information.

Higher Education Data Collection (HERDC) Reporting

(58) The Research Office is responsible for capturing the HERDC classification of contract research and grants in the research management system. Contract and Grants Accounting collates the research income data. The Finance Advisory PSt is responsible for responding to Contract and Grants Accounting queries or requests for further information or documentation.

Part D - Project Close and Reporting

Project Close

(59) Research and other finance projects are required to go through a close-out process after the end dates and prior to the preparation of the external financial reporting (where applicable).

(60) The Finance Advisory PSt has primary responsibility for initiation and preparation for the close-out process and should monitor projects approaching end dates on a monthly basis. Secondary responsibility, including monitoring and final financial project close in UniFi rests with Contract and Grants Accounting. The Project Close-Out Checklist is recommended to be used by Finance Advisory PSts as a guide to the process and decision-making steps.

(61) Any final project transactions or adjustments are required to be well substantiated through appropriate documentation. Chief Investigator approval is required for all significant project close adjustments.

(62) Subsequent to accounting appropriately for project margins throughout the life of the project and surpluses or deficits at the end of the project, project financial accounts are required to balance to nil in order to proceed to final project close.

(63) The Finance Advisory PSt must perform the following actions for project close: 

1. Identify outstanding commitments, consider the need for variations and clear outstanding transactions, commitments and sub-ledger balances, including small balances less than $200.
2. After ensuring that all valid costs have been charged against a project, reverse any remaining project deficit from the project accounts by processing an adequately substantiated journal entry for Operating Funds, the Consultancy Account, or another research project, per applicable expenditure line item.
3. After ensuring that all valid costs have been charged against a project, any remaining project surplus is only required to be returned to the funder if UQ has a contractual obligation to do so (refer to the ‘Refunds’ provisions). If there is no contractual obligation to refund and, depending on the research subsidisation and operating funding position of the organisational area, a journal should be processed by the Finance Advisory PSt to transfer the surplus to Operating funds or to the relevant Academic Consultancy and Award (ACA) account, with the approval of the Head of School.

(64) Contract and Grants Accounting is responsible for final financial project close. When projects reach six months past close date, Contract and Grants Accounting will process a final adjusting journal to the underwriting account nominated at project initiation, and will close the project.

External Financial Reporting

(65) Contract and Grants Accounting is responsible for the preparation, review, approval and submission of all external financial reporting for contract research and grants for the University in accordance with the contractual conditions.

(66) Contract and Grants Accounting, as part of the initial setup of the finance project account, will record the contractual requirements for reporting in the finance system for items such as treatment of overhead, margin, and interest, as well as any other special non-norm reporting requirements. The data is available for access of the finance advisory staff via the Project Detail Report (staff login and appropriate access level required).

(67) The Finance Advisory PSt needs to review the relevant contractual/reporting requirements outlined in the Project Detail Report to ensure that the project expenditure adheres to the relevant requirements specified. The Finance Advisory PSt is responsible for ensuring that the general ledger financial records for projects are up to date, complete, and accurate prior to the preparation of the financial statements by Contract and Grants Accounting. Additionally, the PSt must provide a Project Financial Confirmation to Contract and Grants Accounting for all final financial statements.

(68) The Chief Investigator is responsible for confirmation of compliance with financial contract conditions, including “in kind” obligations, which is often required for external reporting obligations.

(69) In instances where funding bodies require special format financial statements, the Finance Advisory PSt is responsible for classification of the project financial information in that special format. Contract and Grants Accounting is responsible for the review, approval and submission of those final financial statements.

(70) Contract and Grants Accounting is responsible for organising and managing the audit process, where required. The Finance Advisory PSt and Chief Investigator are responsible for responding to audit queries or requests for further information.

Section 4 - Roles, Responsibilities and Accountabilities

Section 5 - Monitoring, Review and Assurance

(71) This Procedure will be reviewed on a triennial basis by the functional owner of the end to end process of financial management of contract research and grants, to ensure its ongoing relevance and effectiveness.

Section 6 - Recording and Reporting

(72) Transactions, activities, results and reports related to this Procedure are recorded primarily in the UniFi financial system, MyBalance project financial reporting system and Business Objects reporting system. Final financial statements, contracts and supporting documents are stored by Contract and Grants Accounting in TRIM.