Research: The Growing Impact on the Financial Operations of Universities

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Research The Growing Impact on the Financial
Operations of Universities

• CAUBO 2006 Conference
• June 25, 2007

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Agenda

• Challenges, issues and impacts
• Yorks solutions
• Questions

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Challenges

• Grant/Contract Complexity
• Reporting Requirements
• Matching Funding Challenges
• Financial Management Challenges
• External Audits
• Funding Pressures
• Cultural Issues

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Grant/Contract Complexity

• Issues
• Increased reporting requirements
• Expansion of types of programs
  federal/provincial/private sector
• Different rules
• Different reporting timelines
• External audit
• In-kind contributions/deep discounts
• Collaborative projects ? multi university
• Foreign grants/contracts

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Grant/Contract Complexity (contd)

• Impact
• Higher level of professional skill sets required
• Role of Research Accounting is moving to that of
  professional financial advisor for budget
  preparation, financial forecast, procurement
  advice, etc.
• Education and training
• Research accounting staff
• Administrative staff at local level
• Researchers

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Grant/Contract Complexity (contd)

• Impact (contd)
• Financial pressure on budgets to support Research
• Coordinating with multi-party institutions
• Increasing difficulty to ensure compliance with
  variety of requirements
• Review and revise internal controls and
  procedures to ensure compliance.

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Reporting Requirements

• Issues
• Form 300 vs. specific reporting requirements
• Cash flow projections
• Recognition/Reporting
• In-kind donations
• Deep discounts
• Partial funding arrangements
• Multi partner arrangements
• Timing of reporting

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Reporting Requirements (contd)

• Impacts
• Valuation issues
• Implications for automation of reporting
• Cash flow impacts
• Managing multi parties in agreements

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Matching Fund Challenges

• Issues
• Pressure to find funding partners
• Risk of funding partner default
• Federal/provincial programs
• Political risk provincial matching programs
• Competitive pressure to accept projects

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Matching Fund Challenges (contd)

• Impacts
• Financial pressures on University budgets
• Conflict of interest/Source of funds

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Financial Management Challenges

• Issues
• Use of technology
• Procurement cards
• EFT payments
• Electronic travel claim submissions
• Document imaging A/P vouchers (compliance
  audits)
• Decentralization vs. centralization Accounting
• Timing of application vs. date of award

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Financial Management Challenges (contd)

• Issues (contd)
• Foreign grants
• Public accountability
• Ineligible direct costs (i.e., severance
  costs/benefit cost)
• Retention of records for CFI major capital
  projects ? up to 10 years

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Financial Management Challenges (contd)

• Impacts
• Compliance monitoring standards
• Review of internal controls and procedures
• Audit requirements
• Photocopy of vouchers
• Cancelled cheques
• Procurement cards
• Electronic travel claim reimbursement
• Document retention
• Communication directly with researcher no RA
  involvement (passwords to PIs)

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Financial Management Challenges (contd)

• Impacts
• Managing foreign currency risk
• Competitive bidding on purchases from research
  grants
• Increased reliance on administrative support
• Cost have risen/technology outdated/funding
  partner has changed his mind
• Budget pressures for severance and benefit costs
  on research grants

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External Audits/Monitoring Visits

• Impacts
• Significant time consumed
• Significant cost for separate audits
• Heightened sensitivity in Ottawa
• No dispute resolution mechanism
• Timing of results of Monitoring Visits/Audits

• Issues
• Provincial grants (ORDCF)
• CIDA
• Canarie
• Department of Foreign Affairs Canada
• International Trade Canada
• CFI gt 4 million
• Monitoring visits

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Funding Pressures

• Issues
• University funding levels (constant budget cuts)
• Increasing cost to support research (professional
  staff, etc.)
• CRC appointments
• Impacts
• Indirect Cost of Research grant relief
• Shortfall in CFI grants end of day
• Pressure on Overhead Calculations on Contracts
• Pressure from Researchers to forgo overheads to
  subsidize their grant activities
• Salary/PTR increments/Start-up costs CRC Chairs

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Cultural Issues

• Challenges
• Researchers attitude

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York Solutions To Date

• Restructured Research Accounting replacing staff
  vacancies with increased skill levels
• Introduced new Research Administrator positions
  at Faculty level for post-award support
• Vice-President Research and Innovation
  established Research Officer positions at Faculty
  level for pre-award assistance
• Introduced new Accountability Agreements for all
  researchers
• Introduced pre-requisites to open research
  accounts
• Signed accountability agreement
• Mandatory training on eReports

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York Solutions To Date (contd)

• Introduced monthly email warnings and advices re
• Available balances by grant number
• 90-day notice of expiry of grant
• Overdrafts
• Expiry of payroll contracts
• Considering others
• Increased training to researchers
• Small groups
• Faculty-specific

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York Solutions To Date (contd)

• Workshops and reference manuals for CFI awardees
• Established dedicated Procurement Professional to
  support CFI awardees
• Implemented monthly checklists on all CFI grants
• In process of obtaining funding for a Central
  Fund of last resort
• Increased communication/cooperation with Office
  of Research Services/Associate Vice-President of
  Research
• Joint training and information sessions

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York Solutions To Date (contd)

• Developed guidelines for Managing Foreign
  Currency Contracts
• Ontario Universities have requested CAUBO to
  assist in dealing with the Federal Agencies
  regarding their requirement for extensive
  copying.
• Created a compliance officer position to monitor
  high risk research areas (overspends,
  receivables, etc.)

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