Research Project and Costing Policy

  1. General Principles of Research Project Costing
  2. Definitions
  3. Research Activity at ACU
  4. Research Project Requirements
  5. Contract Approval and Reporting
  6. Project Pricing
  7. Managing Research Project Foreign Exchange Risk
  8. Infrastructure Levy Variation Requests
  9. Budget and Post-Award Requirements

1.  General Principles of Research Project Costing

This Policy outlines requirements for research projects and for the costing of research projects so as to ensure that ACU is able to effectively implement its research management obligations.

There are five elements to this policy:

  1. It sets out specific research project and contract requirements at AC
  2. It affirms ACU’s position that all research contracts (i.e., for both competitive grants AND contract research) include a provision for indirect cost recovery, grant agency conditions permitting.
  3. It ensures that there is full accountability and responsibility for decisions taken on pricing of research projects.
  4. It encourages researchers to adopt a more commercial approach to negotiating agreements with outside parties.
  5. It affirms the position of the University as a provider of high quality and high value
    services which should be reflected in the contract research project budgets.

By meeting these objectives, the University will comply with relevant sections of the Competition and Consumer Act 2010, adopt a more transparent methodology for costing goods and services, and ensure it obtains the necessary funding to cover the full cost of research activities.  The principles of competitive neutrality require publically funded institutions to charge commercial rates.

Service and infrastructure costs, commonly referred to as overheads or indirect costs are real costs incurred by the University.  Through Sustainable Research Enhancement (SRE) funding provided under the Research Block Grant funding scheme, the Government supports universities in the partial recovery of the indirect costs accruing from competitive research endeavours which specifically exclude an indirect cost recovery mechanism.  In all other instances where the application of indirect costs is not prohibited by the grant or contract guidelines, institutions are expected to charge both direct and indirect costs of conducting research. The direct costs are identified in the budget breakdown of the research project and the indirect costs are remitted through the application of an Infrastructure Levy on research project costs, also included in the research project budget unless prohibited by the funder.

The sum of full direct costs, as well as an amount to reflect indirect cost recovery is the minimum price that should apply to ACU research projects and consultancies.  Researchers are required to seek commercial rates when preparing research project budgets which reflect the high quality services based on specialist knowledge and facilities offered by the University.

2.  Definitions

2.1 Commercial Research: is a fee-for-service arrangement where ACU resources are contracted to conduct a research project.  Use of IP developed during the project will be negotiated  between ACU and the contractor.

2.2 Research Institute: refers to one of the following: Institute for Health and Aging, Institute for Positive Psychology and Education, Institute for Religion and  Critical Inquiry, Institute for Religion, Politics, and Society, Institute for Social Justice, Learning Sciences Institute of Australia, Mary MacKillop Institute for  Health Research

2.3 Direct Costs are those directly attributable to the conduct of the research project.
These include:

  • Direct salary costs of staff employed on the project such as research assistants/research officers (either casual, part-time or full-time);
  • Salary on-costs, levied to recover costs of superannuation, payroll tax, workers’ compensation premiums, annual leave loading and provision for long service leave and parental leave.  These should be included in the research  project budget at the relevant ACU-determined rate which can be calculated via the ACU Salary and On Costs Calculator, or as specified by the relevant funding body;
  • Cost of consumable items;
  • Bona fide contracts with unrelated external suppliers of specialist services (contracts which are labour supply contracts must be included under total employment costs);
  • Laboratory and facility rental and usage charges (external provider);
  • Travel costs;
  • Other maintenance costs;
  • Items of equipment purchased; and,
  • Costs of an audit (where allowed)

2.4 Indirect Costs are the costs accruing to the University in enabling the research activity to be undertaken.  Indirect costs are not easily attributable to a single  project.  At ACU, Indirect Costs are calculated as a percentage of direct costs and are intended to cover the following overhead items:

  • The provision of general facilities including the Library and buildings;
  • Insurance, legal and other jurisdictional charges; and
  • Support from the Office of the Deputy Vice Chancellor (Research), Human Resources, Marketing and External Relations and Information Technology, etc.

For the purposes of calculating indirect costs, the following items are not included:

  • Costs of using facilities neither owned nor financially supported by the University; and
  • Costs of providing support for postgraduate and higher degree research student thesis projects, including;
    • scholarships and stipends
    • the imputed costs of salaried academic staff for student supervision; and,
    • other costs directly related to the thesis or its production.

2.5 Infrastructure Levy is a percentage amount charged to a research project to recover the indirect costs accruing to the university in conducting the research project.

2.6 Research is defined as that which meets the research requirements defined by the Higher Education Research Data Collection (HERDC) Specifications (to be reported to the Federal Government as part of jurisdictional reporting requirements).

3.  Research Activity at ACU

3.1 Involvement in research activities, including commercial and consultancy research, results in important benefits to the University and the community. These include;

  • Enriching the skills and knowledge base of University staff;
  • Making specialist knowledge, skills and facilities available to the wider community;
  • Facilitating collaboration with industry and government departments, and
  • Providing the University, its faculties and research  institutes with financial and other resources.

3.2 All research activities will be consistent with the purposes of the University and its policies and should be such as to enhance the standing of the University and the academic community and professional reputation of staff. In particular, commercial and consulting activities performed as a staff member must conform with the standards required by the Australian Code for the Responsible Conduct of Research (ARC/NHMRC) and the University Research Code of Conduct.

3.3 All research project activity undertaken by ACU staff during work time and using University resources is under the auspices of the University

4.  Research Project Requirements

In order to ensure that the University is able to implement its obligation effectively, the following are required:

4.1 The nominated faculty and research institute staff (as indicated on the relevant research grant/tender cover sheet) will endorse all submissions of funded research project requests prior to submission to the Office of the Deputy Vice-Chancellor (Research) by the internal deadline. This endorsement will include confirmation;

  • that the project meets the HERDC specifications definition of research;
  • that the necessary infrastructure to meet the requirements of the proposed research is available; and,
  • that each staff member named on the project has the necessary workload allocation and is able to conduct the research in the light of teaching, supervision and other research responsibilities as appropriate

4.2 All applications for externally funded research projects, including commercial, consultancy and professional services that satisfy the definition of research, must be approved by the Deputy Vice Chancellor (Research), or nominee.

4.3 The research project will be covered by a contract or other formal agreement between the funding body, the University and any third parties as detailed in Section 5.and approved by the Deputy Vice Chancellor (Research), or nominee.

4.4 The research project or other research work will not commence until associated contracts have been executed and all approvals such has human and animal ethics and biosafety requirements have been obtained or met.

4.5 The Lead Chief Investigator is responsible for ensuring that the project deliverables or milestones as specified in the contract are provided by the due dates.

4.6 Wherever possible, use of the results of the research in the staff member’s teaching and postgraduate supervision should be assured, as should publication of the results with no undue restrictions being imposed.

4.7 Higher degree research students, using project data in a thesis, will be guaranteed the use of such data in the thesis subject to any approved confidentiality agreement or thesis moratorium.  This extends to the retention of copyright in the thesis as a minimum requirement for a student’s involvement in the research.

4.8 The Lead Chief Investigator is responsible for ensuring expenditure against the research project budget is incurred in accordance with the conditions of the funding agreement and any related contracts.

5.  Contract Approval and Reporting

5.1 It is the responsibility of the Office of the Deputy Vice-Chancellor (Research) to manage all aspects of all contracts relating to research.  This includes the development of contracts (where ACU is the administering institution), reviewing contracts that are provided by a third party, managing the negotiation between parties when necessary, and ensuring the formal execution of the contract.

5.2 The Office of the Deputy Vice-Chancellor (Research) will ensure every contract protects the intellectual property rights of the University, any University staff member listed as a chief investigator, co-investigator or associate investigator, and student(s) appropriately.

5.3 All contracts developed for research must be duly signed by those deemed to have the authority to do so according to the contract and the University Delegation Policy.  Research contracts are to be submitted to Office of the Deputy Vice-Chancellor (Research) in advance of the agreed deadline so as to allow sufficient time for review of contract conditions, negotiation with sponsors and third parties (as required) and arrangements for contract execution. Under no circumstances should a researcher or other University staff member sign a contract on behalf of the University unless authorised to do so.

5.4 In order to ensure that University interests are protected and ACU is able to report all Higher Education Research Data Collection (HERDC) eligible income, it is essential that all financial arrangements with other institutions are acknowledged and approved in writing prior to contract execution.

5.5 ACU investigators must seek all necessary faculty or research institute endorsements prior to submission to the Office of the Deputy Vice-Chancellor (Research) of the details of any contractual variations required.  The Office of the Deputy Vice-Chancellor (Research) will arrange variations to funding agreements and related contracts.

6.  Project Pricing

6.1 Research project budgets must cover, all direct costs, and include an Infrastructure Levy to partially recover indirect costs where allowable.

6.2 Research project budgets must include fully costed teaching relief requirements with funds so granted to be returned to the Faculty.

6.3 Any payments to researchers via a commercial research contract must be specifically listed in the research project budget (and attached to the contact as a schedule, for example). It must be stated in the contract that this work is to be paid from the research project budget.

6.4 Where a research project and/or associated contract requires an audit, the research project budget must include the audit cost if this cost is allowed.  An indicative amount should be sought from the Office of the Deputy Vice-Chancellor (Research) prior to finalising.

6.5 Unless otherwise specified in section 8.2, the Infrastructure Levy on all research projects (as permitted within the sponsor’s funding guidelines) will be calculated as 20% of total project costs exclusive of GST for net amounts of $10,000 and above.  For net amounts of less than $10,000, a levy of 15% of total project costs will apply.

This will be apportioned as follows:

  • University research central funds: 40% of the total indirect cost recovery component
    (8% of the total budget); and,
  • Faculty/Research Institute: 60% of the total indirect cost recovery component (this will depend on whether the staff member’s salary is paid by the Faculty or Institute) (12% of the total budget)

6.6 The Infrastructure Levy is applied at the end of each month to invoices generated during that month.  This ensures that there are always funds in the research account of the research project to cover the levy.

6.7 Where an indirect cost higher than the University’s minimum rate of 20% has been charged in the past, then the higher rate will remain in force.  The University will reserve the right to charge a higher infrastructure levy if a higher maximum is provided for under the funder’s stated public policy.

6.8 Projects funded under Category 1 of the Australian Competitive Grants Register will not generally be subject to any indirect cost recovery except where the granting body rules allow for such recovery, in which case the project should recover the maximum amount available under the rules.

6.9 In cases where total project funds or a part thereof are controlled by the funding agency and are not administered by the University  (that is, funding is received as a reimbursement only), the overhead charge need only apply to the revenue amount received and administered by the University.

6.10 The infrastructure levy must be shown as a separate budget item.

7. Managing Research Project Foreign Exchange Risk

Researchers may decide to apply for research project funding from an overseas organisation, or enter into a contract with an overseas organisation (or partner with that of another institution) where consideration is received in foreign currency.

Due to volatility in exchange rates, the research income awarded in foreign currency may be potentially subjected to material changes once converted to Australian Dollars.  The unpredictable markets can also influence expenditure and payments pertinent to an overseas research contract.

7.1 Prior to agreeing to enter into an international contract or applying for overseas research funding the researcher should consult with the Office of the Deputy Vice-Chancellor (Research) to ascertain the potential risks associated with the specific contract or application at hand.

7.2 Once it has been agreed that it is in the best interest of the University to proceed with the contract or application, the following options are available to minimise foreign exchange risk;

  1. Endeavour to negotiate the contract or application in Australian Dollars;
  2. Upon referral by the Office of the Deputy Vice-Chancellor (Research), ACU Finance will undertake an assessment of the research contract that will encompass the review of elements such as;
    1. The amount and currency of the awarded overseas contract;
    2. Current volatility;
    3. The market exchange rate;
    4. The interest rate differential between the two currencies being exchanged over the period of the foreign exchange contract;
    5. The duration of the contract between trade date and settlement date where trade date is the date the University would enter into the forward contract and the settlement date is the date, the currencies are exchanged; and,
    6. Whether an optional delivery period is required and/or feasible for the foreign currency risk management

7.3 ACU Finance will then provide researchers with a guaranteed exchange rate for foreign currency grants from the time of application.  Market rates will be used to determine the guaranteed rate.

This means that researchers will be provided with a secure foreign exchange rate that is fixed from the time of the application until the time that the funds are received. Effectively, the budget of the research project application will not be affected by any volatility in the markets.

7.4 ACU Finance will then determine how the University minimises risk against its foreign currency exposure.

8.  Infrastructure Levy Variation Requests

8.1 A faculty or research institute may decide not to seek a share of its indirect cost recovery or to reduce its share. If a levy variation request is being sought (either a full waiver of or reduction in levy), either the Faculty Executive Dean or Research Institute Director (dependent on faculty or institute affiliation of the CIA) must endorse the request. In so doing, they agree to relinquish or reduce their faculty/institute share (60%) of the Infrastructure Levy.

8.2 ODVCR will not seek to recover indirect costs in the following circumstances;

  • The grant conditions or institutional guidelines prevent the application of indirect cost recovery or an Infrastructure Levy (for example, Category 1 funding);
  • Scholarship funding to support a higher degree research student;
  • Equipment only grants1;
  • Research funding provided by a hospital where ACU is able to access this funding only by virtue of the conjoint appointment of the Chief Investigator;
  • Donations;
  • Travel only grants2;
  • ACU internal grant funding

Note 1 and Note 2: If funds are awarded purely for the purchase of certain equipment or travel costs where no levy is allowed, or no extra funding will be provided to cover the Infrastructure Levy, the ODVCR will not seek to recover the project indirect costs; otherwise the Infrastructure Levy will be recovered as specified in Section 6.5.

9.  Budget and Post-Award Requirements

9.1 Lead chief investigators are responsible for ensuring that budgeted funds are monitored and expended according to the approved budget (and as per any approved variations), and within the timeframe specified in the agreement.  Where allocated budgets differ from the requested amount, investigators are responsible for revising the budget and submitting the revised budget to the Office of the Deputy Vice-Chancellor (Research) for approval.

9.2 Research funds may not be used for any purpose other than that approved under the contract conditions, unless a variation is approved.

9.3 Research funds may not be used to employ contractors for consultancies or other purposes where there is a likelihood of a conflict of interest with any ACU staff member, unless a declaration is made and endorsed by the faculty Executive Dean or research institute Director and approved by the Deputy Vice-Chancellor (Research).

9.4 Subject to the conditions of the award, any assets which are purchased from research project funds remain the property of the University and must be accounted for as part of University assets.  Transfer of any assets purchased from research project accounts to another higher education provider will be subject to the conditions of the contract and approval of the Deputy Vice-Chancellor (Research), in consultation with the academic organisational unit holding the assets or the Executive Dean of the relevant faculty or research institute Director.

9.5 Research Project final reports are to be submitted to the Office of the Deputy Vice-Chancellor (Research) for review (where appropriate), recording and project closure.

9.6 Transfer of unspent research project funds to another higher education provider or organisation will be in conformity with the contract conditions and with the approval of the Deputy Vice-Chancellor (Research).

9.7 Subject to the funding agreement, any unspent funds at the conclusion of the project (that is, the end date specified in the contract) will be returned 100% to the Office of the Deputy Vice-Chancellor (Research) and the account closed unless specific arrangements have been approved by the Deputy Vice-Chancellor (Research) or nominee.

Related Policies, Procedures, Guidelines and Local Protocols

Australian Code for the Responsible Conduct of Research
Competition and Consumer Act 2010
Higher Education Research Data Collection Specifications
ACU Research Code of Conduct
ACU Delegations of Authority Policy & Register
ACU Intellectual Property Policy
ACU Salary and On Costs Calculator

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