Research Administration Network

September 20, 2013

Overview 1. Updates - Marlene Boutet and Elvie Coletta 2. Optimal Budget Strategies – Olga Naiberguer

1. Getting started 2. Budget development process 3. Special Considerations 4. Best practices 5. Questions

OSR & RFMS Updates

OSR • Departures

• Mary Margaret Klempa, Senior Director, OSR, left August 23, 2013

• Olga Naiberguer is now Interim Director, Grants and Contracts, OSR

• Marlene Boutet is now Interim Director, Awards Management and Operations, OSR

• Retirements • Teresa De Angelis retired on

August 30, 2013 • Amy Larin, Senior Awards

Officer, will be taking over her portfolio for the time being

RFMS • Retirements

• Lea Archambault, Senior Manager, Monitoring & Compliance

• Pat Champagne, Financial Administrator (CRIAQ, Environment Canada, MAPAQ, NCE)

• Joanna Gacek, Financial Administrator (CIFAR, MUHC Fellowships, NCIC)

• Monika Koeck, Financial Administrator (NCE-BioFuelNetwork, NIH, US Misc.)

• Khandan Movafegh, Financial Administrator (Clinical Trial US, Contracts, Misc.)

Research Administration Updates

• Recent communications: • Memo: Academic salary paid from research funds, circulated

August 23rd • Clarified that anyone with an Academic Staff appointment with a

ranked position of Assistant Professor, Associate Professor or Professor cannot draw their salary from Tri-Agency funds.

• Memo: Reimbursement of Expenses - PROCEDURE UPDATE regarding missing receipts, circulated Sept 3, 2013

• Effective September 1st 2013 the practice of obtaining a signed memo as a substitute for missing original receipts in expense claims, will no longer be in effect.

• Claimants must now submit supporting documentation (original receipts or acceptable equivalent) when making travel expense reimbursements.

Research Administration Updates

• Recent communications (continued): • Memo: Update to Reimbursement of Expense Policy, circulated

September 20th

• Summary of revisions to Reimbursement of Expenses Policy included in version 1.8.

Optimal Budget Strategies September 20, 2013

The Basics

Optimal Budget

Research Plans

Institutional Policies

Agency requirements

Research Administrators

Optimal Budgets & Award Cycle

Proposal Development

Agency review

Award Acceptance

Project Implementation

Financial Administration

Project Close-out

An optimal budget at the proposal stage ensures that the project flows easily throughout the award cycle

Optimal Budget

Budget

Research Plans / Project Plans

Stakeholders

• Balances the needs of stakeholders

• Complements the research plans

• Ensures the smooth implementation of the project, if awarded

Budget is the mechanism through which the project plans are implemented. Start with the research plans and then build the budget.

Project Plans What are the intended outcomes of the project? What activities are required to achieve the objectives? What resources are required to complete the planned

activities? When do we anticipate having the time and resources to

undertake each activity? Will a research team be necessary? Will other institutions be

involved? What activities will those researchers undertake? Will they need

funding issued to them? If yes, have the research offices of the collaborating institutions been

involved in the preparation of the budget? (Each collaborating institution will have its own institutional considerations)

Project Management Plan Overview: Why the project is being conducted and its primary

objectives Scope: Research needs, requirements, deliverables, constraints and

work breakdown structure Schedule: Activities schedule and project milestones Costs: Project budget Quality: Quality measurement and control approach Project team: The people working on the project, their roles and

responsibilities Communication: Communication type, channels and the reporting

approach Risks: Risk mitigation and contingency planning Procurements: Required procurements and purchase processes (McGill

Marketplace, PCards, etc.) Closure: Closure approach, including the deliverables, project closeout Changes: Procedures used to track changes in the project Baselines: Scope, schedule and budget baselines

Example: Project Workplan Project workplan

Project number

Institution Country

Start date

Planned end date

Project title

Results Activities

FY 1 FY 2 FY 3 FY 4 FY 5 FY 6 FY 7 Intended outcomes Intended outputs Q

1 Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Note: Inasmuch as possible all activities should be linked to results.

Budget development process Draft Research Plans

Agency requirements

Institutional requirements

Final research plans (incl. project budget)

Proposal Submission

• Plans are refined with each step in the process

• Research administrators play an important role in assisting research teams in translating their plans into competitive proposals.

BUDGET DEVELOPMENT PROCESS

Budget considerations

Program requirements Agency requirements and expectations PI requirements

Research team members requirements,

if applicable

Institutional requirements (incl.

requirements of collaborating institutions)

Students & research personnel rates of pay

Knowledge translation dissemination activities Awarded currency Inflation/deflation

Agency guidelines Project & budget period for use of funds Indirect costs Specific eligible & ineligible expenses (including any budgetary

limitations) Re-budgeting authority (flexibility of budget line items) Carry-forward authority Extensions (e.g., automatic, by request) Reporting requirements: format, expected due dates Mandatory matching/in-kind commitments Letters of support/confirmation from the contributors are required. Note that

OSR will not sign an application without confirmation of matching from contributors.

Subawards/subcontracts – are they permitted? Required collaboration/consortium agreement(s)

Institutional considerations Rates of pay for research personnel Per diem rates for travel Indirect Costs rates Taxes HR policies McGill agreements with certain agencies For example, Department of Health and Human Services (DHHS)

rate agreement for US Federal (except NIH), rate agreement for the European Union.

Risk Management (insurance)

In cases where subawards/subcontracts are anticipated, the institutional requirements of each collaborating institution should be taken into

consideration when building the budget.

Indirect Costs • Indirect costs of research represent the institutional costs related to

the conduct of research (e.g, maintenance of facilities, infrastructure, utilities, insurance, compliance, research administration, etc.)

• Indirect Costs should not be included in cases of: • Tri-Agency programs (tri-agency funding is reimbursed via the

Federal Indirect Costs Program). • Any cash contributions matching Tri-Agency or Provincial (FRQ) grants are

subject to indirect costs. Consult McGill’s Indirect Costs Policy. • Government of Quebec agencies (including Fonds de recherche du

Québec) • Government of Quebec Accredited agencies

• If the research is not funded by the accredited sponsors of the Quebec Government or is not one of the Canadian Government agencies listed above you must include the following rate in your budget:

www.mcgill.ca/research/researchers/proposal/budget

McGill Indirect Costs Policy (effective July 2011)

Funding category Rate (%) of Indirect Costs

Grants and gifts for research/sponsored projects from provincial, Canadian, and foreign government agencies; international organizations and institutions; charitable organizations; foundations and not-for-profit organizations

15% or maximum rate allowed by sponsor as per written guidelines or as pre-negotiated by McGill University (please contact OSR for specific sponsor rates)

Grants and Contracts with U.S. Federal agencies (except NIH grants)

64% on direct salaries and wages, including fringe benefits (in accordance with McGill University’s DHHS Rate Agreement dated August 9, 2010).

National Institutes of Health (NIH) 8% on Total Direct Costs less equipment (in accordance with NIH Grants Policy Statement).

Grants and Contracts from industry

40% (Industry sponsored grants and contracts that are matched through Tri-Agency programs and accredited provincial programs - e.g. NSERC CRDs, NSERC Strategic Projects and Networks, Networks of Centres of Excellence etc will carry 25% indirect costs.)

Contracts with Canadian government agencies

If through Public Works and Government Services Canada (PWGSC) 65% on direct salaries and benefits, including fringe benefits; 2% on travel. Otherwise (not through PWGSC) 40% on total direct costs; or maximum rate allowed by sponsor as per written guidelines.

Service Agreements 40% Clinical Trials 30% Contracts with provincial and foreign government agencies; international organizations and institutions; charitable organizations; foundations and not-for-profit organizations

40% or maximum rate allowed by sponsor as per written guidelines or as pre-negotiated by McGill University (please contact OSR for specific sponsor rates).

How do I calculate indirect costs? • Direct cost x (1+indirect

costs rate)= total budget • Total budget / (1+ indirect

costs rate) = total direct costs

• For example: • Total direct costs are $128,000,

indirect cost is 25% • 128,000 x 1.25=160,000 Total

Budget • Total budget is $128,000,

indirect cost is 25% • 128,000 /1.25=$102,400 direct

costs

For any matching contribution, only the total direct costs count towards the match.

What is the difference between a stipend and a salary?

Stipend • Student Stipends (aka scholarships,

studentships, fellowships, etc.) are monies paid to students (typically at the graduate level) from a professor’s grant for the purpose of allowing the student to further his/her own research/thesis or other program or academic requirement.

• Stipends are fellowships awarded to provide financial support to the student while he/she is completing his/her degree.

• Method of payment: BSA (except for postdocs)

Salary • A Research Assistant's (RA) salary is

an hourly wage for research work by a student that does not advance the student's own research/thesis or assist the student in progressing towards his/her degree.

• McGill grad students at cannot be employed more than 10 hrs/week on topics unrelated to their thesis work.

• Method of payment: RA payments are processed via the Minerva HR Appointment form/POPS and are considered employment income and therefore subject to statutory governmental deductions.

Association of McGill University Research Employees (AMURE)

Casual Research Assistant

• Student in good standing normally a student registered at the undergraduate level or higher.

•Currently (minimum rates): $11.18 + mandatory benefits

•As of June 1st, 2014 (minimum rates): •Undergraduate students:

$12.70+ mandatory benefits

•Graduate students: $13.97+ mandatory benefits

•Mandatory benefits: 19.2% (includes up to 12% mandatory government benefits, 4% vacation indemnity, and 3.2% holiday indemnity)

Regular Research Assistant

•Employee with a Masters, or equivalent

•As of June 1st, 2014: Min. rate for Research Assistants: $19.75 + mandatory benefits

•Mandatory benefits: 25 - 28% in addition to salary (varies as a function of included benefits; includes vacation indemnity, designated paid holidays and authorized leaves)

Research Associate

•Unranked Academic with a Doctoral degree or equivalent degree, and at least five (5) years of research experience

•As of June 1st, 2014: Min. rate for Research Associates: $22.75 + mandatory benefits

•Mandatory benefits: 25 - 28% in addition to salary (varies as a function of included benefits; includes vacation indemnity, designated paid holidays and authorized leaves)

Minimum rates are shown. PI may offer a higher rate based on the specifics of the research situation and granting agency regulations.

Postdoctoral Fellows • Paid via stipends/ award payments that do not require

mandatory benefit contributions beyond total amount • As of January 2010, all postdoctoral fellowships (sometimes

called “stipends” by researchers at McGill) are taxable according to the Canada Revenue Agency (CRA) (see: federal income tax related to scholarship and fellowships and federal taxation rates).

• Financial information found here.

All Graduate Students’ and Postdoctoral Fellows’ Stipends may include PGSS Health and Dental Insurance ($434/year) as a non-discretionary benefit. If the PI elects not to pay this cost from their grant, the post-doctoral fellow or graduate student will assume the cost.

Sales Taxes • Budget items that are subject to goods and services taxes must add

*6.937%. • This rate includes the Federal GST (*5%), Québec TVQ (9.975%), 67% rebate

on the federal GST and 47% rebate on the Québec TVQ. • Regardless of where the vendor is located, McGill is required to assess sales

tax. • For example, goods are purchased from a company in New Hampshire, where the

goods are not subject to sales tax. Despite this, McGill is still required when processing the expense to self-assess and recover sales tax on behalf of the federal and provincial governments.

• Note that the full taxes (not rebated) are encumbered on the Fund up-front but rebates are applied as invoices are paid.

• See McGill’s Financial Services Knowledge Base – Sales Tax Quick Reference

• Rule of thumb: applies to all purchases (including consultants), except personnel and sub-grants issued by OSR/RFMS to other academic institutions and not-for-profit organizations. Be sure to budget accordingly!

SPECIAL CONSIDERATIONS

Partnership programs • Involve all stakeholders in the budget development process

• Ensure costs reflect the requirements of other institutions on any anticipated subawards

• Budget for annual meetings, site visits • Increased monitoring and often less flexibility in the

reallocation of budgets, when awarded • Matching contributions are often required and must be

reported to the sponsor • Collaboration/Consortium Agreements are often required

Matching contributions Matching contributions demonstrate the “buy-in” of stakeholders and are becoming an increasingly common requirement in funding opportunities.

• Cash contributions • Additional cash contribution(s) coming to McGill as co-funding to a project

(including matching to projects funded by accredited agencies) may be subject to indirect costs. Budget accordingly.

• In-kind contributions • Contribution(s), in the form of material or resource, to a Project that have a

monetary value but the cost is not allocated to the project and the cost is borne by the contributiing partner.

• Examples: room rental, software licenses, staff time, etc. • Must be able to track the contribution (receipts, timesheets, etc). Should not assign

a value to resources where a fee is not ordinarily charged. • For example, a PI cannot claim his lab space as an in-kind contribution because the

university would be covering this cost regardless of the project. • Eligible in-kind contributions vary according to the sponsor. Always check agency

guidelines. • As a general rule, always try to find balance between project needs and reporting

requirements. • No double-dipping: If contribution is already being counted as a match in one

project, it cannot be counted as an eligible match for another project.

Foreign Currency • Spending power is advanced to the PI in Canadian dollars

• USD currency is currently opened at 1:1 • All other currencies are converted based on the Bank of Canada

rate (and not on the Bank of Canada “cash rate”) • Currency exchange is revised upon receipt of payments.

Therefore, spending power may be adjusted based on the changes in currency.

• Subawards to other institutions are usually issued in CAD • For example, with Tri-agency funds, we must issue subs in

Canadian dollars, regardless of the destination.

What happens if the budget is reduced? • Flexible Budget

• PI still has authority to determine how the funds are spent taking into consideration any reduction.

• Sponsor may suggest areas where savings could be made, but the ultimate authority on how funds are spent remains with PI.

• Fixed budget • Usually, sponsor gives opportunity to PI to revise the budget

before it is considered ‘fixed’ • Very important to work with OSR at this point to ensure that all

amounts budgeted reflect institutional policies

Managing Variances • If budget variances are not permitted or only permitted to a

threshold, prior approval of the agency is required. • Approval process varies according to the agency. Most will accept

a justification via email, but some do require that the grant agreement be amended.

• Some agencies allow variances but require that any variances are justified as part of financial reports. In these cases, the PI must follow up with the Financial Administrator in advance to provide the justification for any variances.

• Requirements for variances can be found in the Ts and Cs of the InfoEd record for the award.

BEST PRACTICES

Best practices – Budgets • Be realistic in the plans. Prioritize the research components and the

funding required to carry out the activities. • Refer to the project plans in the budget justification. Make sure that

the timelines match. • Research estimated costs. Avoid using estimated values (for ex.,

computer $2,000). Include a reasonable estimate of the costs, showing that some research has been done, listing the specifications as appropriate.

A good budget justification should give the reader a clear idea of the

activities to be undertaken before they even get to the research proposal section of the application.

How do I assess if an expense is appropriate? • When recommending a proposal for funding, peer-review

committees evaluate the feasibility and appropriateness of the amount requested in relation to the activities proposed. They do not pronounce themselves on the eligibility of expenses contained in a proposal budget. All expenses must still conform to the agency guidelines

• As a best practice, all costs incurred should meet the following

criteria: ALLOWABLE by the agency regulations ALLOCABLE, that is, the project which paid the expense must

benefit from it. REASONABLE, that is, the cost reflects what a "prudent

person" might pay. CONSISTENT, that is, must be handled consistently across the

University.

Thank you!

Questions?