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Tri-Council Monitoring VisitFall 2009

Tri-Council Monitoring Visit

Representatives from SSHRC and NSERC conducted an on-site monitoring visit during the week of September 28th to October 2, 2009. CIHR was unable to attend due to scheduling conflicts.

Met with officials and staff responsible for grant funds administration at the University

Reviewed transactions from NSERC, SSHRC and CRC accounts for fiscal year 2008-2009 (April 1st to March 31st) and followed-up on issues as they arose

Met with grant holders to determine their satisfaction with the administrative support available to them to support proper management of their funds, and

Held an information session for faculty and staff on the proper use of their grant funds

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Objectives of the Review

Review the effectiveness of policies, controls, and systems in place to ensure that the agencies’ policies and regulations were followed and that research funds were well managed.

Ensure that grant holders use their research funds in accordance with the agencies’ policies, regulations and guidelines.

Ensure that grant holders are properly supported by the institution in effectively managing the research funds, and

Share and disseminate information on agency requirements.

Findings - Strengths

McMaster demonstrated a good process for Biohazard certification

There was mandatory training on ethical requirements for students and researchers, and

Good processes were in place for the reconciliation of the Travel Advance directly on the Travel claim

Findings – Improvements from Previous Tri-Council Visit 2003

Improvements in use of grant fund transfer letters when transferring funds to other Institutions

Formal GRF (General Research Fund) process was implemented

RTS (Release Time Stipend) management process was implemented

Findings –Areas of improvementManagement Control Framework

Context:Financial Management Framework both centralized and decentralized

Gaps:Roles and responsibilities of staff:

Roles and responsibilities of Departmental administrators and Researchers not well documented and not well understood.

ORS staff - review travel and personal expenditure claims for payment. Other types of expenditures under $2,500 are not reviewed.

Decentralized staff - Departmental administrators review expenditures primarily for compliance with University requirements, not for Tri-Agency requirements.

Training: Formal ongoing training for staff and researchers involved in the day to day

administration of grant funds not provided.

Oversight: Ongoing monitoring of the effectiveness of the administration of grant funds not

comprehensively undertaken.

Findings – Areas of improvement

Compliance and Eligibility Review

Responsibility for ensuring that expenses charged to grant accounts are eligible is seen as the grant holder’s responsibility.

Some of the grant holders interviewed indicated that they are not familiar with Tri-Agency guidelines.

Expenditures under $2,500 are not reviewed for eligibility nor compliance. All transactions made through service contracts and bookstores or other internal stores are not verified for compliance and eligibility to Tri-Agency guidelines.

Findings – Areas of improvement

Authorization by grant holder

Many transactions reviewed did not have the authorization of the grant holder or his/her delegate.

According to Agency guidelines: • The Grantee is responsible for authorizing expenditures from his/her grant

account in accordance with the Agency's requirements and conditions of grants and with the Institution's policies. No other party may initiate or authorize expenditures from an Agency's grant account without the Grantee's written delegated authority. All claims must have the Grantee or delegate's signature. The signatures certify that:

all expenditures on the claim are for the purpose for which the grant

was awarded; the charges included have not been claimed for reimbursement from

other sources; and reimbursements for expenditures received from other sources or

Institutions will be disclosed to the administering Institution.

Findings – Areas of improvement

Travel Expenses

Missing supporting evidence: Conference prospectus information Supporting documentation Affiliation of the traveler to the research

One-over-one signature exercised by admin staff on behalf of the Chair or Department Head

The required countersignature validates the relevance of the travel to the research project and provides supervisory approval.

Findings – Areas of improvement

Hospitality Expenses

Missing supporting evidence for expenditures:

• number of participants• purpose of the event

Findings – Areas of improvement

Salary Limits No monitoring process to ensure that the salary limits

established by the Agencies for post graduate and fellowship individuals paid from research accounts were respected.

No monitoring to ensure the person receiving a salary from research grant funds met the eligibility requirements set by the Tri-Agencies.

Findings – Areas of improvement

Charges from internal services and stores

The University relies on grant holders to review their account statements to confirm accuracy of internal charges (negative approval process)

The University does not have an oversight process in place to periodically review the compliance and eligibility of internal charges to grant fund accounts

Findings – Areas of improvement

Shared Costs

Shared costs are not approved by the Grant Holder or his/her delegate. Examples of shared costs are photocopying, glasswashing charges

Grant Holder is not provided with sufficient information to justify

the expenses charged against his account.

Basis of calculation of the attribution of shared costs are not clearly defined.

Findings – Areas of improvement

Internal Adjustments

Journal voucher adjustments on the research grant accounts are made without the approval of the Grant Holder.

Consequently, some adjustments to research grant accounts may not be compliant or eligible.

Conclusion

Therefore, the Agencies found that the financial control framework of the Institution pertaining to the management of grant funds to be non-satisfactory.

Consequently, the next financial monitoring review will be held in approximately 2 years to ensure that processes have been put in place to ensure that we meet Tri-Agency requirements.

Steps Going Forward

Process Re-engineering efforts have begun: Bookstore (Titles and Media Shop) Stores (ABB and FHS) Expense Reports Systems Contracts Journal entries

Re-engineered processes will be consistent for all research accounts, regardless of sponsor

Processes will be consistent Eligibility will vary

Process Re-engineering

Processes are being reviewed for: Eligibility oversight PI or delegate approval Safeguarding of original receipts

Benefits of Change

Continued funding Implementation of best practices Greater transparency of expenses posted to

accounts Processes will be applied consistently across

faculties and departments

Expense Reports

Non-compliant expense reports will be returned to department with checklist, clearly identifying deficiency

Please ensure that a complete descriptive of the business purpose of the travel is fully documented (eg no acronyms, relation to research is provided)

Appropriate approval is obtained – For PIs, this is the Dept Chair or the Dept Chair’s Delegate (in the FHS only)

Tri-Council Information Sessions will be organized by FHS Finance on a semi-annual basis

Expense Reports

Policy for Bookstore Purchases

Only grant holder and delegates will be able to purchase goods charged to research accounts

Purchaser will inform cashier of account # Purchaser will show cashier employee ID badge Cashier will input ID into Point-of-sale system System will check that purchaser is authorized for particular

research account as identified through FAS system Purchaser will sign original receipt, to be maintained by

bookstore Bookstore prepares daily detailed file of transactions charged to

Research account and forwards to the Research Finance Office for review to determine eligibility. If item purchased is ineligible, the purchaser will be contacted for an alternative account

To-Be: Recommendation - Stores

Develop & implement a Stores’ system (or interface) to e-mail the PI or delegate (if designated) a monthly statement of sales sorted by G/L, detailing the line items, description, unit price and extended price

The monthly statement will ask the PI to notify Stores if: any transactions are incorrect if the statements should be forwarded to another individual

Remove all ineligible items from Stores (complete) Develop & implement a Stores’ system (or interface) to e-mail the PI or delegate

(if designated) a monthly statement of sales sorted by G/L, detailing the line items, description, unit price and extended price

It will then be the PI or delegate’s (if designated) responsibility to sign statement of sales to indicate approval and retain for audit purposes.

Benefits: PI will have a consolidated statement of purchase details from Stores matching

the line item on the monthly FAS reports No risk of ineligibility as all questionable items have been removed from

inventory

Systems Contracts

Issue involving Systems contracts is PI approval (delegate) and Eligibility Review

Preliminary Stakeholders meeting has occurred to get feedback from Research Community as to how we can correct these deficiencies.

Further Risk Assessment workshop is going to be held at the end of Sept to develop a proposed solution

Further information will be forthcoming

Journal Entries

For all journal entries, charges to Research Accounts must be approved by PI or their delegate on that Research account.

If at all possible, approval should be done prior to journal entry being made. E-mail approval is an acceptable form of documentation and all documentation must be retained for audit purposes. If getting prior approval is not achievable, approval within a reasonable time frame is acceptable (30 days)

Adequate documentation must be retained supporting the basis of the charge…eg time sheets, usage logs. If your department charges an hourly charge for some reason, backup supporting how this hourly charge was arrived at is usually requested by Tri-Council reviewers.

Eligibility Review will be conducted by the Research Finance Office when approving the journal entry.

The above points must be taken into consideration for all journal entries. FHS Research Finance Office will be contacting each department shortly to set up a time to discuss the preparation of journal entries within their departments and to offer any guidance to ensure the above conditions are met.

BMO MasterCard

Individual Cardholder statements will be forwarded to the Cardholder for processing Using the Accounts Payment Summary Sheet located at

http://www.mcmaster.ca/bms/forms/BMOsummary.xls, the Cardholder (or someone on behalf of Cardholder) completes this form attaching the original statement and the receipts in support of the charges.

Approval of charges charged to research accounts must be signed by PI or their delegate. This can be done on actual receipts or on Accounts Payment Summary Sheet reconciliation.

Department will then prepare the journal entry necessary to clear the clearing account The journal entry and supporting documentation is then forwarded to the FHS Research

Finance Office for review and approval. A completer of the journal entry can have a departmental approver, however that dept approver must change the approver to SYMONSR before forwarding the documents to FHS Research Finance.

FHS Research Finance Office will manually approve the entry upon review at this point in time, and forward necessary paperwork to A/P

A/P will conduct their review, noting that Research Finance approval has already been obtained and approve the journal entry within ORACLE

The journal entry will now appear on FHS Finance approval screen and will now be electronically approved by the FHS Research Finance Office

Tri-Council Info. Sessions

“Using Your Research Grant Funds” will be posted to the FHS web-page: http://fhs.mcmaster.ca/finance/resacct.htm