Finance Department Finance Department

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					                                                       10/15/2010




         Finance Department
                Mrs Melissa Johnson
        Accountant (Research and Commercial)
          mel.johnson@port.ac.uk, ext 3309

                    October 2010




          Finance Department
• Reports to Vice Chancellor + Directorate
• Reports to Finance Committee

• Senior Officers
   – Director of Finance – Ms Emma Woollard
   – Deputy Director of Finance – Dr Elizabeth
     Bartle
   – Financial Controller – Mrs Vicky Bruce




         What does the Finance
           Department Do?
• Provides a full range of financial services and
  professional management and financial advice
  to the university
• Provides an efficient and effective administrative
  service to the University
• Helping to maximise the resources available to
  deliver services
• Ensures that the proper standards of financial
  probity and control are maintained




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                     Finance Department -
                        Responsibilities
•   Management Accounting Section
     –   Responsible for the provision of accounting information to Directorate / Faculties for decision
         making purposes Also responsible for Teaching Led Knowledge Transfer / Full Cost
•   Financial Accounting Section
     –   Responsible for the Published Accounts, tax returns, vat, banking
•   Research Section
     –   Management of grants and contracts both pre and post award
•   Purchasing Section
     –   Responsible for the procurement of UoP assets and consumables
•   Payroll Section
     –   Responsible for paying UoP employees and students
•   Payments Section
     –   Responsible for paying Invoices and Expenses to the University
•   Income Section
     –   Responsible for collecting monies due to the University
•   Insurance Officer
     –   Responsible for all UoP Insurance Policies including reviewing research contracts for
         compliance
•   Student Finance Section
     –   Assists students with queries about funding, money advice, provision of emergency loans




                    Finance Department –
                      Research Section
• Location – University House, 1st Floor
• Generic Email address
     – research-finance@port.ac.uk
• Members of staff
     – Accountant – Mrs Mel Johnson (3309)
     – Senior Accountancy Assistants
           •   Mrs Sonia Reeves (3133)
           •   Mrs Jo Penney (3186)
           •   Mrs Elaine Hooke (3186)
           •   Miss Jemma Best (3135)
     – Accountancy Assistants
           • Miss Carly Prior (3133)




                    Finance Department –
                 Research Section - Pre Award

• Responsibilities
     – Provision of costings for research applications, in conjunction with
       Faculty
     – Arrange authorisation for research applications
     – Provide guidance on full economic cost (fEC) principles
     – Advising on sponsor Terms and Conditions
     – Reviewing of contracts for Finance Issues (Insurance, payment terms
       etc), in conjunction with Senior Contracts Officer INCLUDING
       PAYMENT TERMS
     – Determining nature of work (e.g. research, KT, consultancy etc)
     – Determining routing of work (University or UPEL)
     – Liaison with Finance Committee (where appropriate)
     – Acting as “Submitter” for UoP on Electronic Application Systems




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            Finance Department –
         Research Section - Post Award

• Responsibilities
  – Setting up of Individual Research Project Codes for monitoring of
    income and expenditure
  – Authorising Staff Approval form (if appropriate)
  – Regular monitoring of Research Projects to ensure
      • Income is received as per the contract
      • Project does not over / under spend
      • Expenditure is incurred in line with award terms and conditions
  – Provision of Management Information
      • Directorate, R&KT Committee, RAE, RAS, HESA, HEBCI.
        Information to faculties, Liaising with sponsor.
  – Audit of Activities – numbers and procedures




          Preparing the proposal -
                 Finances
• HEFCE principle
  – All activities should be sustainable in their own right
    (Teaching, Research, Other, Publicly funded and Non
    Publicly funded)
• Full Economic Cost
  – Identification of the true cost of the work
• Difference between Cost and Price
  – Cost – the amount of money that the work will incur
  – Price – the amount of money that the sponsor is
    willing to pay




          Preparing the proposal -
                 Finances
• Identifying the Full Economic Cost
  – Research Section has a form to help – (F31)
  – Minimum daily rates - FEC / Commercial
      • Price to charge depends on e.g. Retention of IP,
        type of sponsor, perceived value of work
• Different Categories of Costs
  – Directly Incurred
  – Directly Allocated
  – Indirect Costs




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         Directly Incurred Costs
• Recordable, auditable, verifiable
• Can be accurately measured
• Examples include
   – Researcher Costs
   – Travel and Subsistence
   – Consumables / Equipment




        Directly Allocated Costs
• Costs that can be attributed to the project
  but can only be apportioned as an
  estimation of use
• Examples include
   – Academic Staff Time
   – Technician / Administrators Time
   – Estates Cost
      • Currently Two types depending upon which
        department work is carried out (generic / lab)
      • Set amount per person (fte) rather than set % of
        cost




                  Indirect Cost
• The costs that cannot be attributed to an
  individual project but are incurred by the
  institution to support a type of activity (eg
  Research or Teaching)
• Examples include
   – Library / IS
   – University House
   – Faculty Office
• Set amount per person (fte) rather than set % of
  cost




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           How much of the fEC do
              sponsors fund?
• Research Councils
  – 80% of full economic costs
  – Exceptions – studentships (100% of stipend /
    fees) and Large Equipment (100% of costs
    over £50k)
• Charities
  – Usually only fund Directly Incurred Costs
  – Some sponsors fund Directly Allocated Costs
  – Very few fund Indirect Costs




           How much of the fEC do
              sponsors fund?
• UK Government / Health Authorities
  – Have been informed by HM Treasury to fund at full economic cost

• European Commission
  – Usually Fund 75% of Directly Incurred Costs and Directly Allocated
    Costs and Contribute an additional 60% of this total to fund Indirect
    Costs
  – Management Activity funded at 100% plus additional 60% for overheads
  – Interreg – only fund approx 50% and very small overheads
  – Marie Curie – tailored towards individual rather than project, funded at
    100% plus 10% overhead.

• Industry and all other sponsors
  – Full Economic Cost of project should be met by the sponsor




        How much of the fEC do
           sponsors fund?
• KTPs
  – Specific project tailored towards near market needs of business
  – Partially funded by Government Grant (TSB)
  – Balance to be funded by Industry (% varies)
  – Fixed amounts available for staff costs, overheads are 50% of staff
    costs etc, any amount paid in excess would be met by Industry partner
  – Usually 2 or 3 years in duration


• Mini KTPs
  – Smaller scale projects, shorter duration
  – Same cost principles apply as with KTPs




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        What if fEC is not met?
• Dean of Faculty approval required for all
  bids that do not meet fEC except those
  listed previously,
  – Research Councils
  – Charities
  – EC
  – or where the full sponsor pricing conditions
    have been met




                     Why?
• University has a responsibility to ensure long
  term sustainability in research activity - HEFCE
• Potential penalties may be enforced by HEFCE
• When fEC is not met in total, the costs will
  outweigh the income leading to a drain on other
  sources of income
• Teaching will suffer due to lack of funds
  available




        Reasons for not meeting
                fEC?
• Project required to fit into research
  portfolio (eg less than 3/4 REF
  publications)
• Project is to get your “foot in the door”
  – Leading to future, better funded projects
• Project may lead to other financial benefits
  – e.g. brings in more students




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            Preparing the proposal
• Follow the Process for each faculty (Research website -
  http://www.rkts.port.ac.uk/research_support/)
• Speak to Research Section and Senior Contracts Officer at
  earliest opportunity
• Decide which resources are required to complete the work
• If employing staff, consult with HR or speak to faculty for
  guidance (HERA grades)
• Rushed bids are noticeable!!
• Allow plenty of time to finalise costs
    – If the fEC is over £500k in any one year, bid has to be
      authorised by Finance Committee




                  Pricing Decisions
•   Certain Sponsors have strict terms and conditions regarding what is
    funded and at what level
     – E.g. Research Councils, Charity etc
•   Need to recover at least fEC on Commercial work to ensure
    Research in general is sustainable
•   Easier to negotiate price down rather than up
•   Who owns the IP?
•   Commercial value of work, importance to sponsor?
•   Why should commercial organisations pay less than the actual costs
    when they make a profit?
•   All Universities have to recover full economic cost
     – Anti Competition Laws
     – Public funds must not be used to support non public activity.




            Preparing the proposal
• Obtain the relevant approval from your faculty
     – (Head of Department needs to confirm support)
• All bids should go through the Finance
  Department for sign off
     – Authorised Signatories for Bids are Senior Officers
       within Finance Department (EW, EB, VB)
• Make a note of the deadline and also let finance
  know
     – Electronic Applications will be submitted by Finance
       Department so add extra time




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             A successful proposal
• Sufficient time given to address all issues
• Resources identified and properly priced
• Peer review
• Agreement of Head of Department specifically regarding
  resources / workloads / fits with department agenda
• Contract terms agreed in advance (or at least considered
  with the sponsor)
     – e.g. IP, payment terms
• Checking of proposal
• Obtaining signature




              What happens when
            Application is successful?
• Sponsor will issue Contract
• Internal approval form (F31) needs to be
  completed
• Contract will be reviewed
     – R&KTS
     – Insurance
     – Finance
• Staff approval (if necessary) will be issued
• Contract authorised and unique cost centre set
  up




                 University or UPEL
•   University is a charity formed under statute (no charity number)
•   Charities need to protect their charitable status and avoid paying
    Corporation Tax
•   University of Portsmouth Enterprise Limited set up for any activity
    not meeting the requirements of Charities Act
•   Primary Purpose Research goes through University
•   Non Primary Purpose Activity, e.g. Consultancy, Routine Testing,
    Hire of Equipment, Profit Generating Research goes through UPEL
•   UPEL is a company that covenants any profits to it’s preferred
    charity to avoid corporation tax
•   Misconception that UPEL is consultancy, and / or personal payment
•   Finance department decides on routing as it is primarily a Corp Tax
    decision




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             Finance Department –
             Research Section Contacts
• Location – University House, 1st Floor
• Generic Email address
   – research-finance@port.ac.uk
• Members of staff
   – Accountant – Mrs Mel Johnson (3309)
   – Senior Accountancy Assistants
        •   Mrs Sonia Reeves (3133)
        •   Mrs Jo Penney (3186)
        •   Mrs Elaine Hooke (3186)
        •   Miss Jemma Best (3135)
   – Accountancy Assistants
        • Miss Carly Prior (3133)




                Research in context
• 2009/10 Provisional Figures (08/09 figures in brackets)
   – Total University Income £169m (£158.8m)

   –   Total Research Income £6.4m (£5.8m)
   –   Total KTP Income £0.3m (£0.4m)
   –   Total Fellowship Income £0.3m (£0.3m)
   –   Total R/K/F Income £7.0m 4% (£6.6m – 4%)

   – Total growth in R/K/F income since 07/08 – £1.1m




                 Current Hot Topics
• Comprehensive Spending Review – 20th October – less
  funding for Teaching?
• Future of government departments / quangos
• Cut to QR funding?
• Russell Group pressure (concentration of research
  funding)
• Sustainability – 08/09 sector deficit on research £2.188
  billion (UoP £8 million deficit - 38% of costs)
• Future cuts to FEC recovered through research
  councils?
• Asset sharing?




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                                                                10/15/2010




                                         Contracts
       What are they, why do we need them and what can
                        they do for you?

                                         14th October 2010

                            Wendy Mullee
                       Senior Contracts Officer
                Research & Knowledge Transfer Services




                                          Overview

•   Contracts/issues RKTS can advise on
•   The importance of contracts
•   Types of contracts
•   Anatomy of a contract
•   Key provisions


Research & Knowledge Transfer Services




                                     Role/Remit
• To negotiate contracts related to research
  activity and research-led knowledge-transfer but
  also teaching and teaching led agreements
      – KT = application of University knowledge
      – Negotiate best terms for University (and researcher!)
      – Contracts advisor to Finance/Directorate




Research & Knowledge Transfer Services




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                                     Role/Remit
• To manage the University’s Intellectual Property
      –   Knowledge arising from research activity
      –   IP generated by staff is owned by the University
      –   Protection: patents, trademarks, copyright
      –   Exploitation of IP (licensing, spin-out activity)




Research & Knowledge Transfer Services




                RKTS Contracts Support for:

• Research arrangements
      –   Sponsored research projects (incl. studentships), especially commercial
      –   Academic collaborations (incl. FP7)
      –   Subcontracts
      –   Material transfer agreements (MTAs)

• Confidential exchange of information
• Teaching and Teaching-led contracts
• Consultancy/ provision of University services
      – UPEL has standard terms
      – Finance decide UPEL vs University

• Development and commercialisation of University IP
      – Licences
      – Options & Assignments
Research & Knowledge Transfer Services




                No RKTS Contracts Support for:

• Purchasing agreements
      – Unless specifically relate to commercialisation projects
• Contracts of Employment
• Collaborative Programme Office’s MoUs
      – As defined by Collaborative Programmes Office - UoP awards


• BUT always willing to advise on IP issues




Research & Knowledge Transfer Services




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                       What is a contract?
...hmmm?!
• If you ask a lawyer:
      – Legally binding agreement: written, verbal, conduct
      – Offer and acceptance


• If you ask a UoP Contracts Manager:
      – An agreement which clearly establishes the rights and
        obligations of the parties
      – A (written) reference point for when things go wrong!
      – Should be in easy to understand English!


Research & Knowledge Transfer Services




               Contracts from the other side!

• The sponsor’s terms and conditions:
      If you are presented with the other side’s contract:
      – Remember no such thing as a free lunch!
      – Do you understand it?
      – Ask for changes.
           • Indemnity
           • Law
           • Publication
           • Intellectual property




Research & Knowledge Transfer Services




                         What’s in a name?
• Nothing!
• Content dictates the type of contract, not what it
  is called
      – Agreements don’t always “do what they say on the tin”
         • CDA may contain payment and licence options, or be
           intended for transfer of materials and/or generation of IP
• Equivalents:
      – MoU, Framework Agreement, LoI, Term Sheet
      – Confidentiality Agreement, Non-Disclosure Agreement,
        Confidential Disclosure Agreement


Research & Knowledge Transfer Services




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                      Anatomy of a Contract
• Date – Effective Date vs date contract is made
• Parties – legal entities, making the contract
• Recitals – set the scene
• Definitions (capitalised terms)
• Clauses – main terms and conditions (organised under
  headings)
• ‘Boiler plates’
   – Jurisdiction
   – Force majeure
• Signatures
• Schedules/Annexes – part of agreement
Research & Knowledge Transfer Services




                  Rubbish IN = Rubbish OUT

•   A good contract should be fit for purpose
•   There are no ‘standard contracts’ only model contracts, which can
    be used as a starting point, based on project specifics.
•   In order to negotiate meaningful terms:
     – Need to be properly informed of the purpose
     – For research projects informed by Principal Investigator
         • Resources and personnel being utilised in project
         • Project goals/deliverables
         • IP issues – background, likely results



                           One size does NOT fit all!
Research & Knowledge Transfer Services




                       Financial provisions
•   Price vs cost- has an impact on negotiation
     – What are benefits, if sponsor not paying full cost?
•   Important to know fEC and not commit to price until agreed internally
•   Consider what happens if sponsor is allowed to terminate early
     – On-going resource commitment?
     – Department/Faculty is the cost centre!
•   Schedule of payments
     – Credit control




Research & Knowledge Transfer Services




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                                  IP ownership
• Who will own the results?

• What rights does each party have to use the results?

• Be careful about agreeing to give all results away,
  without retaining any rights to use… may need them for
  future research!

• Think about what expertise and know-how UoP are
  bringing to the project… this should not be part of the
  results to be transferred!

Research & Knowledge Transfer Services




                                Confidentiality
• If working with industry, they will want to keep their
  information confidential
• Employees have a duty of confidentiality
      – BEWARE: students are not employees!
      – Third party collaborators/subcontractors are not UoP employees
• Are (any/all) results confidential?
• Publication – are there any restrictions?
      – Studentships: there is a Uni requirement for a thesis to be published
        (after 2 years)
• PI needs to be familiar with publication terms and
  confidentiality arrangements - they are responsible for
  managing project
Research & Knowledge Transfer Services




                                     Contact Us


                    Research & Knowledge Transfer Services
             Purple Door, 28 Guildhall Walk, Portsmouth PO1 2DD
                           rkts@port.ac.uk, Tel: 6191
         www.port.ac.uk/research/researchandknowledgetransferservices/

         Contracts & IPR Manager: kate.charles@port.ac.uk , ext: 6203
         Senior Contracts Officer: wendy.mullee@port.ac.uk, ext: 6202
           Contracts Assistant: Gloria.Chan@port.ac.uk, ext: 6191




Research & Knowledge Transfer Services




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