Allocation of the SAP project code

A unique project code is allocated on the University’s finance system, SAP.  This is used to code all items of expenditure including purchase orders, travel claims, staff appointments and internal transfers.  This code should also be quoted on all internal communications concerning the grant or contract to enable easy identification of the project.

No research project account code can be issued until the agreement has been fully signed by all parties.  in the case of donation with no agreement attached, a project code can only be set up once a formal letter of commitment has been received from the sponsoring organistation.

Creation of budgets in SAP

A budget is allocated to the project on SAP.  This will equal the total amount awarded by the sponsor, and the level of detail used in the budget breakdown will reflect the amount of detail required by the sponsor for reporting.  Any subsequent agreed changes to the budget will be reflected by amending the budgets on SAP - these budgets are controlled by the Research Finance Division.

Issue of the budget memo

A budget memo will be sent out to the Head of Department, copied to the Principal Investigator and the Departmental Administrator.  The purpose of this document is to notify the relevant people of the SAP project code to use and of the budget available for the research project.

Commencement of expenditure

Once a SAP finance code has been issued, spending can commence on the project (provided that the announced start date has been reached).  The SAP code must be quoted on all financial transactions (including staff appointments) to ensure that all costs are collected against the correct project.

Preparing claims and invoices

All claims and invoices relating to research and research-related projects are raised in the Research Finance Division.  Staff from the Research Finance Division may need to liase closely with departments as a part of this process, for example to check whether the research work has reached the billing milestones as set out in the original contract.  All project income raised is credited to the unique SAP project code allocated to the project.

Chasing debts

Once an invoice has been sent to the sponsor, it represents a debt due to the University.  Responsibility for chasing unpaid debts resides with the Cash Office section of the Finance Office.

Charging university overheads

Contributions to University overheads and indirect costs that are to be charged to projects are automatically calculated and posted to projects at the end of each month.  These calculations are based on a set of rules that are attached to each project when it is set up on SAP.  When the rules are set up, the academic department will be asked to supply a finance code to receive the department’s share of the overheads.

Reconciliation of project expenditure

Periodically, and each time a claim or invoice is prepared, project expenditure on each project is reconciled by the Research Finance Division.  This means that expenditure is scrutinised on a line-by-line basis for eligibility according to sponsor’s rules and for completeness.  At this point any likely over or under spends are investigated.  Projects denominated in foreign currency, such as those sponsored by the European Commission may be re-budgeted if there has been a significant movement in the exchange rate.

Foreign exchange differences

Where the income relating to a research project is received in a currency other than Sterling, exchange difference will inevitably arise.  This may be because the amounts are fixed sums paid in a foreign currency, the value of which depends on the prevailing exchange rate.  Alternatively, in some cases sponsors require claims based on actual costs incurred in Sterling, but the claims are paid in a different currency, converted at the prevailing exchange rate when the claim is paid.  In all cases, the University policy is that all exchange differences should be charged or credited to the project.  In order to help with this process, the Research Finance Division regularly re-budgets projects that are denominated in foreign currency.  Where exchange rate movements have resulted in a significant change to the total budget, a revised budget memo will be issued.

Correcting income/expenditure postings

From time to time posting errors may occur, for example where purchase orders or staff appointments have been charged to the wrong project.  In such instances, the Research Finance Division will prepare the appropriate journal entries to correct the postings.