Managing Your Grant

Departments are responsible for ensuring that all expenditure charged to a grant complies with sponsors’ terms and conditions. 

On this page:

• The active period of research
• Charging expenditure to a grant
• Staff costs
• Equipment Purchase
• Posting petty cash
• Posting a refund to a grant
• Month end tasks
• Clearing the suspense grant
• Monitoring Grants
• Sponsor Audits

The active period of research

Costs can only be incurred during the active period of research, i.e. after the start date and before the end date of the grant. After the end date, purchases can be charged if the goods were physically received before the end date. The start date is determined by the contract. Where a starting certificate is required e.g. for Research Councils or Wellcome Trust, then the start date is usually determined by the day the first person begins work on the project - see  Starting certificates.

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Charging expenditure to a grant

Departments charge expenditure (excluding Staff costs, Pooled labour, Overheads and Non-direct costs) using UFS iProcurement and Accounts Payables (AP) modules.  When charging expenditure in these modules you need to enter the award, project and task number of the appropriate grant in the distribution screen.  These fields must always be specified to allocate expenditure correctly in the Grants Module.

Moving expenditure

If expenditure processed through AP has been charged in error to a grant and needs to be transferred this must be done in AP, mirroring the original transaction. This ensures that VAT is correctly treated and a correct audit trail is maintained. See Adjusting Grants Expenditure in AP for how to do this.

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Staff costs

Staff costs are imported into the Grants module monthly. Where Staff costs have been incorrectly coded they can be transferred using the Tools/Transfer function in the Expenditure enquiry screen. Costs which fail validation will go to departmental suspense accounts.

Please see Clearing the suspense grant and inform HR of any amendments so any errors do not recur in subsequent months.

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Equipment Purchase

The University Procurement Procedures must be followed for the purchase of all items of equipment and the ‘Track as Asset’ box in AP checked for all purchases over £5,000 (including non-recoverable VAT).

There may be additional conditions detailed in the contract or award letter regarding the purchase of large pieces of equipment, such as a specified time period for the purchase and/or copy invoices to be supplied to the sponsor.

If a sponsor’s terms and conditions of funding specify a more stringent procurement procedure than the University’s procurement procedures, then the sponsor’s procedures usually take precedent. Please contact your Research Support Advisor/Administrator (RSA) from your School Team in the Research Operation Office if you require clarification on the sponsor’s terms and conditions.

The budget may also be ring fenced and sponsor permission required before an unspent equipment budget can be used for another purpose. When the award has finished ownership of the equipment may be specified in the contract or award letter, otherwise it will belong to the department.

It is important to check sponsor terms & conditions over the level of expenditure which can be charged to grants e.g. on a 2 year award some sponsors may only allow the university to claim 2 years’ depreciation. If an asset is depreciated over 4 years, the sponsor will therefore only fund half the asset. Please contact ROO for advice.

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Posting petty cash

Disbursements from petty cash can be charged to a research grant. There is a limit of £25 per item and all petty cash expenditure should be supported by a receipt. There are specific procedures for petty cash to be charged to a grant; the code for the credit side of the transaction to the GL to be used in the flex field is xxAA/AAAA/EZZH, where ‘xx’ is your department code.

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Posting a refund to a grant

Departments must not transfer funds into a research grant or directly code income from a sponsor to a grant code. Collecting monies due from sponsors is undertaken by the Credit Control team in Research Accounting.

However, there may be occasions when a miscellaneous receipt needs to be coded to a grant, e.g. if a supplier is overpaid and they reimburse via a cheque rather than a credit note; or if an expenses advance is raised which is no longer required which results in a refund.

It is not possible to code a miscellaneous receipt directly to a grant in the AR module, so departments must post the receipt to a GL code, using either the transaction code ETZZ for reimbursement of an expenses advance or EXZZ for any other purpose.  The receipt can then be journalled to the grant using the same transaction code (either ETZZ or EXZZ) in the grants journal.

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Month end tasks

The following tasks should be undertaken monthly to ensure that expenditure posted and subsequently claimed from the sponsor is correct.

• Review expenditure posted to your department suspense grants and re-post expenditures to clear the department suspense grant to zero.

• Review and clear funds check failures and other exceptions.

• Check for un-posted pre-approved batches (grants journals).

• Correct any VAT errors as advised by the Tax Section, within the Finance Division.

• Run the ‘Projects by Organisation by PI’ report.

• Check the status of all grants and take action to correct erroneous items/resolve overspends and under spends. A copy of the relevant sheet from the ‘Projects by Organisation by PI’ report should be given to each PI for review.

• Run a GL Accounts Analysis Report on the departmental research cost centre, the ED source of funds, and transaction code LZEG for excess income or AZZN/EZZN for excess expenditure.

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Clearing the suspense grant

Each department has a suspense project and award with the format RG00000 (dept cost centre) for the award code and dept cost centre/000 for the project code.

Eg.            RG00000 (EWAG)           EWAG/000

The suspense account is used for posting expenditures which fail the validation process on import into grants e.g. staff costs where award and project numbers do not match with the set up on the grants module; this prevents posting to the intended project and award. Most of the items in the suspense account relate to staff costs. Using either the Tools/Transfer function or grants journals departments are required to clear the suspense project to leave a zero balance for month end.

Use of the Tools/Transfer function means that once the items are matched they will not appear on the expenditure enquiry screen when the ‘Exclude Net Zero Items’ box is ticked, making identification of unmatched transactions easier. Selecting the GL period from the start of the financial year is, in most cases, sufficient to identify the individual transactions which make up the suspense account balance.

Any balance remaining on departmental suspense accounts at half year and year-end may be posted to a general ledger account.

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Monitoring Grants

All departments have access to Cognos, as well as reports within the UFS Grants Module, enabling them to view the latest financial position on their grants. These reports can be run for an individual grant or a range of grants and can be used to check expenditure charged to a grant per expenditure category, commitments against a grant and funds available.

If your department has arranged for you to have access to Cognos and/or UFS, you will be able to do this yourself at any time. If not, please contact your School Team in the Research Operations Office for assistance.

Cognos reports

As a minimum Departments should ensure that they run and review the ‘Projects by Organisation by PI’ report as part of their month end procedures. Awards owned by a different department will be included on the relevant PI summary.

UFS reports

Individual ‘Award Status’ or ‘Project Status’ reports for award or project may also be run as required.

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Sponsor Audits

Any external audit requirements will be included in the terms and conditions of each award. External audits will be arranged by ROO and auditors may need to visit departments to check invoices and payroll information. ROO will contact departments to arrange these visits.

Our most common grant audits are for EC-funded grants, Technology Strategy Board, Research Councils, National Institute for Health (US) and some major UK charities, e.g. Wellcome Trust, Cancer Research UK.

Please refer to the Financial Procedures Manual (FPM) for financial requirements, particularly when dealing with travel, subsistence and entertainment. Whilst there are some mandatory elements, it is the intention of the FPM to provide a set of best practice guidelines. Provided expenses are wholly and exclusively for the purposes of business, and comply with the mandatory elements, they may be allowed outside these guidelines.

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