RMIT University-Financial Services Group Research Contracts.

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Presentation transcript:

RMIT University-Financial Services Group Research Contracts

RMIT University-Financial Services Group Background In 2006 the approach to managing research financials was changed to: –ensure certainty of access to research funds, allowing researchers the freedom to conduct research; and –manage the impact of research on the University’s operating result.

RMIT University-Financial Services Group Initial Treatment To achieve the above: –the unspent income from reciprocal grants was deferred to 2007, in each relevant grant internal order; and –the unspent balance of non-reciprocal grants was accrued as ‘accrued research cost’ in cost element against each school central relevant research internal order.

RMIT University-Financial Services Group Principles The financial treatment of research adopted by RMIT from 2006 and beyond is based on two principles – –(i) each researcher must be able to see the true financial position of his/her grant/s –(ii) we do not aim to report a profit on research. Income will match expenditure, however, if part of a grant is used to fund capital expenditure, then an operating result that is ‘profit’ will appear in the grant.

RMIT University-Financial Services Group What is Profit? Accounting profit: –Accounting profit is calculated using the accruals or matching concept. Which means that the total income includes not only cash received but also amounts owed by credit customers (debtors) for sales made within the accounting period. The total costs incurred to achieve these sales include not just actual payments made, but also amounts still owing to suppliers (creditors).accruals or matching conceptaccounting period

RMIT University-Financial Services Group “ Normal” Profit: –Is the difference between income less any expenses. It does not take into consideration the accruals or matching concept.accruals or matching concept

RMIT University-Financial Services Group From Now On The total research revenue invoiced will still be reported as income. Invoices raised in the normal manner and reported under the relevant IO, with income deferrals to be raised against reciprocal research grants as necessary Schools will report gross research revenue against their annual budget and will budget accordingly Expenses will continue to be incurred as normal Researches may, if they wish, check to see if funds available using the following SAP report:

RMIT University-Financial Services Group

What Does It Mean? IO (slide 9) – Budgeted revenue for 2007 is $60K, budgeted operating results for 2007 is Nil. At the end of 2006 we had available funds $18K that are curried over to Analysis that have to be undertaken by Finance Officers: Why Budgeted revenue for 2007 is $60K when the current contract is for $30K? If we have actual expenses as budgeted for 2007, e.g. $60K, we would report a loss of $30K.

RMIT University-Financial Services Group RMIT definitions ‘non-reciprocal grants’ are broadly defined as grants received from the ARC, NH&MRC and other government departments/agencies and, in most instances, the contract does not require defined delivery outcomes. ‘Reciprocal’ grants are from all other sources and, in most instances, the contract does require defined delivery outcomes. The nature of each grant (ie whether it is reciprocal or non-reciprocal) will be determined and advised by Lise Lahteenmaa (FSG).

RMIT University-Financial Services Group Extraction Sample – Non-Reciprocal Research Contract

RMIT University-Financial Services Group Extraction Sample –Reciprocal Research Contract