Reflection of Grants in the General Ledger

One of the purposes of the General Ledger (GL) is to reflect all of the University’s financial expenditure. Therefore, summary information from the Grants module is transferred on a daily basis into the GL. The summary information is mapped across into the GL by sponsor type; the detail connected to an individual award is maintained in the Grants module. 

On this page:

• Research Grant cost centres
• Research Grant sources of funds
• Reconciliation between the GL and the Grants modules
• Items processed centrally each month

Research Grant cost centres

Each department has one or more GL cost centres into which expenditure from the Grants module is mapped. The standard cost centre for this is **AG, the first two letters being the department code. This may vary in departments where more than one cost centre is used.

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Research Grant sources of funds

Research Grant expenditure will always be mapped across to a source of funds code MA**. The MA indicates research, the next letter indicating the sponsor type, and the last letter indicates the VAT Status.

The sponsor type “letter” is used for reporting purposes.

The VAT Status will either be an A, B or C as explained in section 3.10 On purchases, VAT type A means that any VAT is coded to the University VAT account to be reclaimed from HMRC, VAT type B means that any VAT is coded to the grant (paid by the sponsor) and VAT type C means that the VAT is charged to the department (see section 3.10 for more details).

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Reconciliation between the GL and the Grants modules

Checking that all expenditure posted in the Grants module correctly posted to the GL is undertaken by Research Accounting...

Departments should not post any expenditure to ‘M’ source of funds codes.

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Items processed centrally each month

The costs detailed below are either imported into CUFS or generated with a grants process by Research Accounting. This is done at month end (usually during the last week of the month) before the Grants module closes. The monthly timetable is updated once these costs have been posted.

Direct costs

• Staff Costs
• Telephone Charges
• Inventory

Indirect, directly allocated costs & revenue

• Pooled Labour
• Overheads
• EC FP7 price adjustment
• Non Direct Costs

The grants module usually closes to departments at 5pm on the third working day each month.  Central processes are completed the following morning. Please do not enter any grants journals during this time.

Costs charged to individual grants are reflected in the ‘Projects by Organisation by PI’ and ‘Award Status’ reports which departments are advised to run as part of their month end procedures.

Pooled Labour, Non Direct Costs and Overheads are all posted by Research Accounting. Departments cannot charge or transfer expenditure to these budget headings.

Non-direct costs

Grants costed using fEC do not have an overhead budget but will include non-direct costs: PI costs, estates costs, indirect costs, infrastructure costs and ‘University funded’.

As explained in Award Budgets where the sponsor does not fund 100% of the fEC, a negative budget will be entered under the ‘University funded’ category of the grant (Task 100). Each month the non-direct costs due will be calculated and posted by a month end process to the grant on Task 100.

The non-direct costs due to departments are posted to the departmental research cost centre and the source of funds EZ**.  The last two letters of the source of funds code will reflect the sponsor type and VAT status of the award in a similar way to mapped expenditure. The transaction code used will be LZCE.

This process allocates the budget evenly over the life of the project adjusting if necessary for date and budget changes.

Pooled labour

Some sponsors may provide a budget for pooled labour. This pays for staff that cannot be charged directly to an individual project as their work is split within the department. Where this is the case a central journal is processed at the month end which generates any pooled labour due as an expense to the grant and a corresponding credit to the department’s research cost centre in the GL. The source of funds EZZY with the transaction code AZZZ is normally used for this journal.

Overheads

Following the introduction of fEC most sponsors do not award overheads.  Overheads are principally awarded as part of a European Commission (EC) grant, industrial sponsors and some charities, usually based on a percentage of direct costs.

A grants process at month end generates and posts the charges due as expenditure on the grant and income in the GL. The department share is posted as a credit to the department’s research cost centre, source of funds EDAA and Transaction code LZAA e.g. U. xx. xxAG.EDAA.LZAA.0000.

Use of department share of non-direct costs, pooled labour and overheads

Departments should spend their share of non-direct costs, pooled labour and overheads directly from the appropriate ED** or EZ** source of funds by coding orders/ invoices directly to the appropriate ED** or EZ** source of funds, using the cost centre that relates to the expenditure and an appropriate E transaction code for the expenditure. Some schools may ‘pool’ departmental shares to EZZZ or EDCZ and costs may be spent against these sources of funds.

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