General audit requirements

On receipt of your contract / agreement it is important that you always check the audit and reporting requirements, as some funders have a strict timeframe within which the Audit report must be submitted. Also some funders will impose financial penalties if an audit report is not submitted on time, so it is important that you ensure that you work with your Departmental Administrator and Research Support Advisor to ensure that the deadline is met.

An external accountancy firm is used to audit expenditure on the University’s awards and the Research Operations Office can arrange for an audit to be carried out when required. The auditors will visit your department to verify expenditure records. Once completed, an audit report is produced and sent to the relevant sponsor.

Ensure expenditure is in line with the terms and conditions of funding and reviewed frequentely. As a general rule consideration should be given as to whether the cost:

• was included in the original Justification of Resources/Proposal
• was subsequently awarded
• is of direct benefit to the research and proper use of public funds
• is economic, necessary and solely attributable to the project
• is not deemed to be in any way excessive or reckless

Also ensure that

• all the expenditures are posted to the grant before GL close date
• costs are captured to the correct expenditure category
• the expenditure comment is clear and contain sufficient detail in CUFS to be understood
• costs incurred for the same purpose in like circumstances are treated consistently
• a readily identifiable casual / benefit exist between costs and the project

And

• do not charge budgeted or forecast figures
• do not vire without prior approval

For classifying items as an asset (equipment) please pay attention to the thresholds mentioned in financial procedures on Fixed Assets, according to this:

• assets costing between £5,000 and £30,000 should be tracked as an asset and included in the University’s Fixed Asset Register; such items are written off ( ‘expensed’) in the year of purchase, so they don’t need to be depreciated
• all equipment costing £30,000 or more is capitalised and depreciated over four years.

Post-term charges refer to costs incurred after the termination date of a project/award. Under some circumstances, some costs may be incurred after the end date, and should be carefully documented. 

The adjustment and reconciliation of post-term charges must be completed in a timely manner after award end to ensure submission deadlines to sponsors are met. 

Any charges posted after the termination date will need to be reviewed and justified for allowability if they are included with the final financial report or final invoice. Examples of common post-term charges include: payroll expenses and telephone costs.

• ensure travel is necessary and relates to the project and that financial procedures are followed
• be aware of the University guidance on Travel and Subsistence, in particular the additional requirement for business class travel and using taxis.
• be aware of funder specific requirements on travel, for example for US federally funded grants, US flagship carrier or those in open skies agreement need to be used

Many funders require a record of time spent on the grant i.e. timesheet to be completed by everyone on the grant, including those employed 100%.  Please note that:

• the timesheet’s function is to provide evidence of the reality of the costs – i.e. the ‘actual hours’ worked on the project
• timesheets also have to show the actual (i.e. real) total productive hours worked and that timesheets should also record unproductive time such as annual leave
• [productive] working time is the total number of hours and excludes holidays, personal time, sick leave, or other allowances
• all hours claimed must be able to be verified in a reliable manner
• timesheets need to be completed and authorised in a timely manner (monthly)
• timesheets must be reconcilable with the absences for holidays, illness, travels or others
• time taken for work-related travel must be supported by appropriate evidence, e.g. conference documentation, project meeting notes etc.

• keep all timesheets and all receipts up to date and in a logical order, ready to present if required
• if you are asked to provide copies of sample invoices please provide the auditor with copies of these, clearly labelled
• once your costs have been incurred and you have the supporting documentation, please try to charge your costs to the grant as soon as possible, to avoid the auditor asking why an item was charged late e.g. purchased in 2014 but not added to the grant until 2016. This may mean an adjustment to the reporting which can be time consuming
• review your expenditure regularly and in articualr prior to the end of the financial period to check that everything is in the correct category, in line with the T&Cs of the grant and the University financial procedures,  and that  nothing has been charged in error. If you find something that is ineligible (e.g. VAT included on an EC FP7 grant), remove this beforehand to avoid the auditor picking it up and asking for it to be removed
• check that the item being charged to the grant is directly related to the grant in question
• be friendly and hospitable

For all purchases ensure that the required purchasing procedures for different levels of spend is followed.

Only cost with clear audit trail, that can be directly and measurably attributed to the project  can be charged to DI (e.g. estimates is not acceptable for lab consumables, or use of equipment).

All expense claims must be supported by adequate evidence (original copies of receipts, invoices or bills). Bank statements are not considered as adequate supporting evidence.

Ensure that all staff are made aware and ensure controls are in place to review all expenditure on a regular basis and any ineligible costs removed.