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Procedures on the Over-Expenditure of Research Funds

Classification number ADM 1305.01
Parent policy Policy on the Over-Expenditure of Research Funds
Framework category Administrative
Approving authority Vice-President, Research, Innovation and International
Policy owner Vice-President, Research, Innovation and International
Approval date September 19, 2017
Review date March 2018
Last updated Editorial Amendments, February 18, 2020

Purpose

The purpose of these procedures is to support the Policy on the Over-Expenditure of Research Funds and to ensure that, should a Research Fund Over-Expenditure occur, it is handled appropriately and in a timely manner. These Procedures outline the process for addressing research fund Over-Expenditures.

Definitions

For the purposes of these procedures the following definitions apply:

“Arrears” means an overdue financial obligation that results when a Sponsor fails or refuses to pay either the full amount of the grant or contract, or a particular payment or invoice related to the grant or contract.

“Continued Funding” means Research Funds awarded for periods of two or more years and paid in annual or periodic installments by the Sponsor.

“Fund Holder” means the individual responsible and accountable for the management and use of a research fund.

“Internal Research Funds (IRF)” means funds provided by the University to a Fund Holder to support research-related activities. IRFs include:

  • Faculty Start-up funds;
  • Internal funding programs; and
  • University matching funds.

“Over-Expenditure” means the amount by which the recorded and encumbered expenses exceed the budget available.

“Recovery Plan” means a plan collaboratively established between the Fund Holder, the Faculty Dean, RTA and the OVPRII, based on the cause of the Over-Expenditure, and which outlines the proportional responsibility of each party to return the Over-Expended fund to a zero balance.

“Research Funds” means funds provided by a Sponsor, held in trust and administered by the University to pay for expenses incurred in support of research at the University, including:

  • Internal Research Funds; and
  • Funds awarded through external Sponsors.

“Research Fund Number (RFN)” means a unique account number dedicated to Research Funds administered by Research and Trust Accounting. The Research Fund Number is used to record all revenues and expenses associated with specific Research Funds.

“Sponsor” means the provider of funds for research activities, including both external and internal sources.

Scope and authority

These procedures apply to all Research Funds.

The Vice President Research, Innovation and International, or successor thereof, is the Policy Owner and is responsible for overseeing the implementation, administrative and interpretation of these Procedures.

Procedures

Roles and Responsibilities

  1. The Fund Holder has overall responsibility for the financial management of their Research Funds, including:

    1. Ensuring that all expenditures are in accordance with Sponsor requirements and also comply with University policies, procedures, and agreements.
    2. Regularly monitoring the financial status of Research Funds using the financial management software provided by the University and maintaining their Research Funds in good standing. Delegation of the account review does not release the Fund Holder from responsibility for Over-Expenditures.
    3. Reviewing all financial transactions that have been charged to their Research Funds and communicating any discrepancies or errors to Research and Trust Accounting immediately.
    4. Ensuring that sufficient funds are available to fund all expenditures and ongoing commitments.

  2. Research and Trust Accounting (RTA) has responsibility for:

    1. Supporting Fund Holders in managing their Research Funds through the provision of: appropriate financial and program information, financial management tools, and advice on and interpretations of University and Sponsor policies and procedures.
    2. Implementing appropriate and effective, policies, administrative systems, and controls to ensure that the research is conducted in compliance with all applicable financial management standard.
    3. Providing a quarterly report on Research Funds “at risk” of going into Over-Expenditure to the Director Office of Research Services.

  3. Faculty Deans have responsibility for:

    1. Addressing Over-Expenditure concerns/issues in a timely manner as brought forward by Research and Trust Accounting or the Office of the Vice-President Research, Innovation and International with regard to specific Research Funds and/or Fund Holders.
    2. Consulting with the Office of the Vice-President Research, Innovation and International on Over-Expenditure matters as needed.

  4. The Office of the Vice-President, Research, Innovation and International (OVPRII), through the Director, Office of Research Services, has responsibility for:

    1. Approving Over-Expenditure requests as outlined in the Policy and Procedures.
    2. Addressing Over-Expenditure concerns/issues as brought forward by Research and Trust Accounting, Deans and/or Fund Holders.

Monitoring

  1. Fund Holders are responsible for regularly monitoring the financial status of their Research Funds. Any concerns or questions regarding their funds should be addressed to RTA who will work with the Fund Holder to resolve any issue or confusion.

  2. RTA will monitor Research Funds on a periodic basis and will report any financial concerns to the Fund Holder, and, as necessary, the Dean and Director, Office of Research Services. RTA will notify the Fund Holder when an over-expenditure occurs, with copy to the Dean and the Director, Office of Research Services.

  3. If an issue or concern is identified that could result is significant financial or other liabilities, Research and Trust accounting will promptly notify the Director, Office of Research Services.

Investigation of Over-Expenditure

  1. Where an over-expenditure has occurred, RTA will perform an analysis to determine the factors that contributed to the over-expenditure. This analysis will be primarily conducted by consulting the Fund Holder to (a) determine the cause of the over-expenditure, and (b) identify possible sources of funding to address the over-expenditure. If the over-expenditure is substantive, the Director, Office of Research Services, Dean, and other key stakeholders will be informed of the results of the analysis and any identified recommendations for resolving the over-expenditure.

  2. RTA will provide a report on the cause of the Over-Expenditure to the Fund Holder, the Faculty Dean and the Director, Office of Research Services, shortly after the analysis and subsequent discussion with stakeholders.

Sponsor in Arrears

  1. RTA will notify the Fund Holder, Dean, and the Director of Research Services when payments from Sponsors are overdue.

  2. Where it has been determined that a Sponsor is in arrears, the Director Office of Research Services will consult with the parties identified above to determine how to deal with the problem Sponsor.

Authorization for Over-Expenditures in Extenuating Circumstances

  1. Over-Expenditures will only be allowed for Research Funds that have Continued Funding.

  2. Requests for limited Over-Expenditures will be considered on a case-by-case basis by the VPRII.

    1. To apply for an exception the Fund Holder must write a letter to the Director of Research Services. The request must provide the amount requested and justification for why the overspending is necessary.
    2. The request may be approved by the Vice-President Research, Innovation and International (or delegate), in consultation, as required, with the Faculty Dean, and RTA.
    3. The Office of the Vice-President Research, Innovation and International will notify the Fund Holder, Dean, and RTA of their decision in writing. Should the request be denied, an explanation will be provided.

  3. Where an Over-Expenditure exception is approved and expenditures are required in one fiscal period in anticipation of the receipt of approved funding in the next fiscal period, administrative flexibility for Over-Expenditures will be permitted subject to the following conditions:

    1. Over-Expenditures of this nature are permitted by the Sponsor;
    2. Over-Expenditures do not take place in the final year of the funding period;
    3. At the conclusion of the Continue Funding period, the total expenditures will not exceed the total amount awarded by the Sponsor;
    4. In any year, except the final year, of Continued Funding, Over-Expenditures are approved by the Vice-President, Research, Innovation and International (delegate); and
    5. Expenditure limits imposed by the Sponsor will not be exceeded without the prior written approval of the Sponsor.

Resolution

 

  1. Subsequent to receiving the analysis of the overexpenditure the Fund Holder will work with RTA, the Faculty Dean and the Director Office of Research Services to establish a Recovery Plan.

  2. The Recovery Plan will take the following into consideration when establishing recommendations for resolving an Over-Expenditure:

    1. The factors that contributed to the Over-Expenditure, as determined by the investigation conducted by RTA;
    2. Research Funds availability;
    3. Outstanding obligations and commitments made against the Research Funds that have been Over-Expended;

  3. Recovery of Research Funds to resolve the Over-Expenditure may come from any of the following sources, as determined and agreed to in the Recovery Plan:

    1. Transfer from other Research Funds held by the Fund Holder, as appropriate;
    2. Recovery from a Sponsor if Research Fund sources are in Arrears (e.g. default on payment by industry sponsor);
    3. Shares of the Indirect Cost Revenues from the Fund Holder, the Faculty, the OVPRII or combination thereof;
    4. Operating funds of the Faculty, OVPRII, other University operating funds or combination thereof;
    5. Alternate sources available to the Faculty and/or OVPRII or other University funds, which are deemed appropriate for such a use.

  4. If a Recovery Plan cannot be agreed upon after an appropriate period of deliberation, the Vice-President Research, Innovation and International, will determine what action will be taken to resolve the Over-Expenditure.

Monitoring and review

These procedures will be reviewed as necessary and at least every three years. The Director, Research Services, or successor thereof, is the Policy Lead and is responsible to monitor and review these Procedures.

Relevant legislation

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Related policies, procedures & documents

Policy on Conflict of Interest in Research
Policy on the Responsible Conduct of Research and Scholarship
Procedure on the Responsible Conduct of Research and Scholarship
Indirect Costs of Research Policy
Intellectual Property Policy
Procurement Policy
Procurement Procedures
Signing Authority Policy
Signing Authority and Approval Procedure
Expenses Policy and Procedure
Policy on Research Residual Funds
Procedure on Research Residual Funds