Research Councils UK Funding Assurance overview of... · • ( Visit ) • Draft report including...

Gareth MacDonald Head of RCUK Funding Assurance

Research Councils UK Funding Assurance overview

June 6, 2017

PresenterPresentation NotesLive from September 2005

RC’s specific assuranceAre HEI’s correctly implementing the appropriate systems & procedures to allow compliance with fEC ?Are HEI’s correctly computing the various cost rates ?

http://www.stfc.ac.uk/home.aspx

RCUK Funding Assurance objective:

“To provide assurance to Accounting Officers that research

funding is spent in accordance with the terms and conditions of

award.”

PresenterPresentation NotesPrevious QA process 2004/05 before fEC & many important TRAC requirements

The four pillars of assurance………….

.

Research Grants and Fellowships

--------------

Procurement

Arrangements/ VFM

TRAC Validation

Doctoral Training Schemes

Non Financial

Terms and Conditions

C O N T R O L E N V I R O N M E N T

Research Organisation Internal Audit Reviews and Other External Assurance


Full economic costs :- the analysis

Typical research grant FEC payment

Direct costs£676m

47%

Estates£129m

9%

Directly allocated

£117m8%

Indirect costs£427m

30%

Capital equipment

£90m6%

PresenterPresentation NotesEmpowering administrators

Chart5

Directly incurred

Estates

Directly allocated

Indirect costs

Exceptions

Direct costs£676m47%

Estates£129m9%

Directly allocated£117m8%

Indirect costs£427m30%

Capital equipment£90m6%

581.65148638

114.37415375

102.51201187

376.54330858

79.06928331

All RCs chart

DI

DA Estates

DA Other

Indirect

Exceptions

All RCs Costs Awarded 07/08

DI, £581,751,486 47%

DA Estates, £114,374,154 9%

DA Other, £102,512,012 8%

Indirect, £376,543,309 30%

Exceptions, £79,069,283 6%

581751486.38

114374153.75

102512011.92

376543308.58

79069283.31

Chart1

581651.48638

114374.15375

102512.01187

376543.30858

79069.28331

Research Council awards in 2007/08

All RC's data

DI581,751,486581,651,486Directly incurred581,651Directly incurred582

DA Estates114,374,154114,374,154Estates114,374Estates114

DA Other102,512,012102,512,012Directly allocated102,512Directly allocated103

Indirect376,543,309376,543,309Indirect costs376,543Indirect costs377

Exceptions79,069,28379,069,283Exceptions79,069Exceptions79

1,254,250,2441,254,150,2441,254,1501,254

100,000

All RC's data

AHRC chart

DI

DA Estates

DA Other

Indirect

Exceptions

AHRC costs awarded 07/08

DI, £26,025,395 41%

DA Estates, £3,707,058 6%

DA Other, £11,626,557 18%

Indirect, £22,013,584 35%

Exceptions, £97,829 0%

26025395

3707058

11626557

22013584

97829

AHRC data

DI26025395

DA Estates3707058

DA Other11626557

Indirect22013584

Exceptions97829

BBSRC chart

DI

DA Estates

DA Other

Indirect

Exceptions

BBSRC costs awarded 07/08

DI, £119,127,031 47%

DA Estates, £24,428,842 10%

DA Other, £24,498,325 10%

Indirect, £74,246,351 29%

Exceptions, £10,507,113 4%

119127031.2

24428842.38

24498325.15

74246350.69

10507112.52

BBSRC data

DI119127031.2

DA Estates24428842.38

DA Other24498325.15

Indirect74246350.69

Exceptions10507112.52

EPSRC chart

DI

DA Estates

DA Other

Indirect

Exceptions

EPSRC costs awarded 07/08

DI, £203,131,832 44%

DA Estates, £44,670,875 10%

DA Other, £14,895,272 3%

Indirect, £141,007,094 31%

Exceptions £54,726,507 12%

203131832.1

44670875.26

14895272.42

141007093.6

54726507.39

EPSRC data

DI203131832.1


DA Other14895272.42

Indirect141007093.6

Exceptions54726507.39

ESRC chart

DI

DA Estates

DA Other

Indirect

Exceptions

ESRC costs awarded 07/08

DI, £21,276,794 41%

DA Estates, £3,173,684 6%

DA Other, £8,023,255 15%

Indirect, £18,627,777 36%

Exceptions, £1,071,665 2%

21276794

3173684

8023255

18627777

1071665

ESRC data

DI21,276,794.00

DA Estates3,173,684.00

DA Other8,023,255.00

Indirect18,627,777.00

Exceptions1,071,665.00

MRC chart

DI

DA Estates

DA Other

Indirect

Exceptions

MRC costs awarded 07-08

DI, £135,069,140 54%

DA Estates, £21,172,860 9%

DA Other, £18,323,427 7%

Indirect, £65,891,269 27%


135069140

21172860

18323427

65891269

7768856

MRC data

DI135069140

DA Estates21172860

DA Other18323427

Indirect65891269

Exceptions7768856

NERC chart

DI

DA Estates

DA Other

Indirect

Exceptions

NERC costs awarded 07/08

DI, £40,434,404 45%

DA Estates, £8,933,898 10%

DA Other, £8,874,571 10%

Indirect, £28,848,053 32%


40434404

8933898

8874571

28848053

2305800

NERC data

DI40,434,404

DA Estates8,933,898

DA Other8,874,571

Indirect28,848,053

Exceptions2,305,800

STFC chart

DI

DA Estates

DA Other

Indirect

Exceptions

STFC costs awarded 07/08

DI, £36,586,890 41%

DA Estates, £8,286,936 9%

DA Other, £16,270,604 18%

Indirect, £25,909,181 29%


36586890.08

8286936.11

16270604.3

25909181.29

2591513.4

STFC data

DI36586890.08


DA Other16270604.3

Indirect25909181.29

Exceptions2591513.4

Assurance objective:

• Five key areas of scrutiny

– Regularity of expenditure

– Variation against profile

– Master data reconciliation

– Non Financial Terms and Conditions

– New and emerging risks……


Main areas of scrutiny

Organisation controls (structure, delegated authority, control environment) Procedures (how are RC guidelines, T&Cs made available to relevant staff,

(PIs, dept. admin staff etc) Monitoring and reporting of expenditure (transaction listings, use of reports

and their distribution) Staff appointments on grants Procurement involvement in the purchase of capital equipment Audit remit & cycle Risk policies Fraud/attempted fraud / scientific misconduct Training Non Financial terms and conditions TRAC:- compliance with minimum requirements; sample check on

rates Due Diligence……..

PresenterPresentation NotesLive from September 2005

RC’s specific assuranceAre HEI’s correctly implementing the appropriate systems & procedures to allow compliance with fEC ?Are HEI’s correctly computing the various cost rates ?

Regularity of expenditure

• Pre-award costings included

• Compliance with Financial Regulations (VfM)

• Systematic / non-systematic errors

• Double counting

• Evidence of review / control

• Ineligible expenditure reported separately on live projects and completed ones

• Transaction listings:- Descriptions; transfers (Journals), particularly towards the end of the project; corrections; T&S; Equipment; staff appointments costs sought vs actual.


Variation against profile / Master data reconciliation

• Material variances only reported ≥ £100k

• Onus on RC to review significant variances but SAQ comments taken into account

• RC will either:-

– Suspend payments

– Re-profile

– Do nothing

• Master data reconciliation :- Start & end dates, cash limits, PI data


TRAC (or equivalent)

• Compliance with TRAC Requirements (Governance & Quality Assurance)

– Clarity of roles and responsibilities (resilience & continuity)

– Rates outside upper & lower quartiles

– Material errors identified ….notify RCUK

– Evidence of annual review of assumptions and rationales of key treatments

– 3 yearly self-assessment review

– Periodic assurance review based on risk assessment

• TRAC Self-assessment questionnaire

• Verification of the rates ( error rates ≈ 5%)


Non-financial terms and conditions:

• Increased attention on non-financial terms and conditions

– Researcher Development

– Public Engagement

– Research Integrity

– Follow-up work

– Efficiency in research


New and emerging risks

• New territory

– Overseas sub-contracts

• RCUK terms and conditions under review ( 2 stages)

• Evidencing MoR Principles

.


Assurance principles

• Focus on self-assessment by Research Organisations

– Self-Assessment questionnaire

– Control environment

– Existing related assurance processes (e.g., internal audit)

– Substantive testing ( ≈ 10-20% risk based sample)

• Interaction with other funders:-

– MoU with HEFCE, HEFCW, Wellcome Trust

• Tighter timescales

• Input into revised terms and conditions

• Key principle:- Empowering the research administration function


Overview of assurance …..

.

Assurance visits to research intensive organisations every three years

Desk based reviews to others every 5+ years

Non-routine assignments as required

Annual statements re-introduced

• Self-assessment ……. (Risk based approach)

• Fieldwork

• ( Visit )

• Draft report including recommendations

• Management response

• Final report

• Follow-up


Overview of assurance …..

.

Risk Category Definition

Regularity of Expenditure (RE)

Expenditure charged to awards complies with Research Council terms and conditions

TRAC (TR) Compliance with TRAC requirements / accuracy of rates

Administration Processes (AP)

Administration procedures which underpin the effective administration of awards e.g., knowledge or application of Research Council terms and conditions.

Variation against Profile (VAP)

Income received on Research Council award(s) is materially higher than expenditure (> £100k)


Assurance ratings…..

.

Assurance Opinion Definition

Substantial The framework of Governance, Risk Management and Control is adequate and effective.

Moderate

Some improvements are required to enhance the adequacy and effectiveness of the framework of Governance, Risk Management and Control.

Limited

There are significant weaknesses in the framework of Governance, Risk Management and Control such that it could be or could become inadequate and ineffective.

Unsatisfactory

There are fundamental weaknesses in the framework of Governance, Risk Management and Control such that it is inadequate and ineffective or is likely to fail.


.

Strategic Oversight & Reporting

RC oversight

RO

HE Reg Board

(HERB)

FAP

UKSBS

GIAA

RCs

NAO

BEIS

OOB

Audit Cttee

Sources of Assurance

Users of Assurance (Stakeholders)

Scope Control environment (CE) Governance Research integrity Financial Control Accountability Regularity (Tx) TRAC Staff Consumables FES IFA C

hampion

(SR

O)

Integrated Funding Assurance


Benefits for research organisations

Benefits

Empowerment of the research administration

We support good

administration and will record it

Feedback to the Research

Councils

We feedback comments to

Research Council policy

groups

Useful recommendations

We want administration to be effective and will try to

assist

Dissemination of good practice

We share observations and common

problems

Good communication

We are responsive and transparent in our approach

Understanding the Research Council ‘point

of view’

We field questions and provide useful

feedback

Free to research

organisations!

Key messages recap

RCUK Funding Assurance mission is to empower the research administration function: You are the first line of defence

Control environment is key……

Tighter timescales; lack of appropriate evidence = ineligible expenditure

Audit trails matter:- be robust or risk losing the funding

If in doubt; contact the Councils…..

.


Thank you : Any questions ?

.

Gareth MacDonald Head of Funding Assurance Research Councils UK Polaris House North Star Avenue Swindon SN2 1UH

Tel:- 01793 413 222 Mobile:- 07771 808 006 E-Mail:- [email protected]


Slide Number 1Slide Number 2RCUK Funding Assurance objective:The four pillars of assurance………….Full economic costs :- the analysis��Typical research grant FEC paymentAssurance objective:Main areas of scrutinyRegularity of expenditureVariation against profile / Master data reconciliationTRAC (or equivalent)Non-financial terms and conditions:New and emerging risksAssurance principlesOverview of assurance …..Overview of assurance …..Assurance ratings…..Integrated Funding AssuranceBenefits for research organisations�Key messages recapThank you : Any questions ?

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