Unboxing Research Finance at the UofAResearch Administration Day 2015

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Chad Schulz, CA, CIA, CFE

Director, Integrated Finance Services, University of Alberta

Michael Walesiak, CA

Associate Director-Finance, Research Services Office, University of Alberta

Presenters

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Agenda• Understand the purpose of the different general ledger

Fund codes (restricted/unrestricted/operating)• Processing journal entries• Understand the processing and allocation of the indirect

costs of research• Future initiatives being planned for Grants 3.0• Purpose and overview of the Finance Management

Committee• Purpose and overview of Integrated Finance Services

Agenda

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Fund Codes

Restricted Research (Funds 530, 531, 535 and 540)

Expenditures are explicitly restricted by the granting agency that contributed the funds.

Research Operating (Fund 330)

Funds are either provided by internal operating budgets or by a sponsor with no restrictions on what the money can be spent on.

Fund Codes

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Characteristics that RSO looks for to determine whether a grant is restricted or operating:

• Are there explicit restrictions in the grant agreement stating allowable or non-allowable expenditures?

• Does the grant agreement require that we return unspent funds?

• Does the granting agency require financial reporting on project expenditures?

Fund Codes

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Source of Funds

External

• Payments from third parties (billings, deposits, wire transfers, etc.)

Internal

• Funds transferred from another source through journal entries (manual entries processed by RSO or Grants 3 automated transfers)

- Startup awards- Transferring funds from a “pot account” to a UofA project holder

Fund Codes

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2015 Fund Cleanup Activities

Projects which were identified to have had primarily unrestricted revenues being deposited into Fund 530 were transferred to Fund 330 and vice versa.

- GL entries were processed to correct fund codes for opening project balances and revenue/expense transactions in Fiscal 2015

- Speed codes were edited to use the correct fund code

Fund Codes

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Going Forward…

• Steps are being taken to ensure transactions are coded to the correct account and fund codes.

• If a project holder receives funding and does not have a research project with the necessary fund code, a new research project must be requested.

Fund Codes

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Example:

A researcher has a General Research Fund project in Fund 530 (externally restricted) and just received a cheque for $50,000 from mining company to test some samples. There are no restrictions on what the money can be spent on and as long as the researcher provides the test results, the sponsor’s requirements are fulfilled.

Possible solutions:

1. Determine whether the researcher has another project in Fund 330

2. Request that RSO create a new research project in Fund 330 (i.e. Lab Services account)

Fund Codes

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How to determine a project’s Fund Code

Fund Codes

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There are 3 ways to process journal entries for research projects:

1. Use automated transfer functionality offered by Grants 3

2. Manual JV’s emailed to researchjv@ualberta.ca

3. Use faculty-assigned interface

Journal Entry Processing

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Grants 3 can process journal entries automatically as long as the following are certain:

1. The full chartfield for the source of funds

2. The amount to be transferred

3. The date of the transfer

Note: the automatic transfer debit will indicate the project receiving funds in the Journal Line Description.

Journal Entry Processing

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Central JV Processing at RSO

RSO began processing all journal entries for research projects in Fiscal 2015

The Research General Ledger Journal Entry (GLJE) Request Form can be found on the Financial Services Forms Cabinet

Completed forms are emailed to researchjv@ualberta.ca

Journal Entry Processing

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To ensure speedy processing of JV’s:

• Ensure all chart fields are completed on the form.

• Sponsor chartfield is the GL value assigned to the speed code or transaction. It is not the sponsor name.

• If expenses are being charged to a research project, the nature of the expenses must be clear and specific. A sponsor (or their auditor) must be able to determine what they are paying for.

• Use APJV or Salary Redistributions when expenses are being redistributed.

Journal Entry Processing

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Indirect Costs of Research

• The Indirect Costs of Research Procedure became effective January 1, 2014 and requires that 85% of indirect costs are allocated to faculties and 15% are allocated to central.

• We created a new nVision report titled “RSGLVICR” that summarizes ICR earned by a faculty in three ways:- Project Holder- Sponsor- Department

Indirect Costs of Research

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The Future of Grants 3• Investigate on-line approvals for all forms

Taking a look at required approvals; are there opportunities to streamline?

Can approvers edit requests or should they only approve/reject?

• Feedback and suggestions are always welcome What is working well? What are the pain points with the current processes?

The Future of Grants 3

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Finance Management Committee (FMC)

• Newly created committee that replaced a number of prior committees.

• Intended to focus on finance and budgeting activities.

• Membership comprised of: Senior financial officers of all faculties Offices of each Vice-President Various central administrative units

Finance Management Committee

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FMC Purpose

• Identify significant finance management, budgeting systems, internal control and operational issues and provide potential solutions.

• Facilitate and communicate enhancements and other changes to finance management and budgeting systems.

• Ensure whenever possible that committee and / or its members contribute input and constructive feedback in relation to finance and budget related policies and procedures.

Finance Management Committee

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FMC Purpose (continued)

• Develop best practices in finance / budgeting.

• Provide advice and guidance on major finance and budgeting initiatives related to:

Finance management, budget and reporting systems

Policies and procedures

Training initiatives

Enhanced finance management integration.

Finance Management Committee

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Integrated Finance Services

• Relationships with both faculties and central administrative units.

Provost Office VP (F&A) including Financial Services and the Budget Office Faculties Other support services

• Ensure that faculties are kept up to date on institutional changes (primarily through FMC).

Integrated Finance Services

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Integrated Finance Services (continued)

• Involvement in a large number of initiatives on campus to ensure appropriate involvement by necessary stakeholders.

• Working to ensure initiatives are collaborative in nature.

• Involvement in recruitment for financial roles across the institution.

Integrated Finance Services

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Integrated Finance Services (continued)

• Providing assistance and guidance to campus in regards to various finance / budget issues.

• Development of a finance partner model.

• Intends to look at the whole picture rather than separated by function or fund.

• Requires understanding of the majority of the U of A systems, policies and procedures.

Integrated Finance Services

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Changing University Environment

• Investigation of responsibility centered management http://change.ualberta.ca/

• E procurement

• Finance Institutional Data Warehouse (Tableau)

• Implementation of new budget system (Hyperion)

• Grants 3.0

• Various policy changes

Changing University Environment

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Questions?