Background. For years, perhaps since the inception of the Research andDevelopment Committee, funds granted by the Committee have been disbursedas follows. Financial Services creates a so-called agency account forthe grantee (if one does not already exist) and the Committee transfers theamount of the grant to this account. The same applies for the awarding ofsummer stipends. The faculty member (grantee) is solely responsible forthe management of the account. (S)he may deposit or withdraw money fromthe account at will, even to the point of overdrawing the account. Untilrecently, withdrawals required no supporting documentation, only thesignature of the account holder. While this system arises from a trulynoble principle--trust in the integrity of the faculty--it has severalshortcomings:
1. Funds have become severely intermingled. Although nominally Researchand Development accounts, the agency accounts have served many otherpurposes. Anecdotal evidence suggests that these accounts (which survivefrom one fiscal year to the next) have even served as a conduit for the(inappropriate!) transfer of departmental funds from one budget year to thenext. Even when there is no intentional misuse, the intermingling of fundsmakes it extremely difficult for our Committee to monitor the use of grantmoney. For instance, our policy for the awarding of grants states thatfunds unused at the end of a project should be returned to the Committee.Under the current system, where the money in R&D accounts may well havecome from other sources, we have no effective way to enforce this policy.There is yet a further problem. Currently, summer stipends are simplytransferred to faculty accounts. The Committee has learned in consultingseveral certified public accountants that summer stipends are taxable income according to IRS guidelines.
2. The Committee has no way to prevent the overdrawing of accounts.Currently there are several R&D accounts that are overdrawn. One, with asignificant negative balance, belongs to a former faculty member who hasleft Le Moyne. Ultimately, the Committee must use part of its funds (thatcould otherwise be used to support new projects) to cover theseoverexpenditures. This totally circumvents the careful procedure theCommittee uses in awarding grants.
3. The Committee has no way to check whether funds are actually used asintended. An applicant for an R&D grant is required to submit a detailedbudget as part of the application. Our policy states that the grantee mustoperate within the line items of that budget. This policy is currentlyunenforceable.
4. The Committee cannot provide careful accounting for the funds itdisburses. The Committee is responsible for the disbursement of asignificant amount of money. We believe that this subjects us to a highstandard of accountability for how we dispose of the funds in our account.At present, it is impossible for us to maintain accurate records of how themoney we disburse is actually used. We find this a serious breach of ourresponsibility and want keenly to rectify the situation.
Proposed Changes--The New System. Here is the system that we propose toadopt. We have consulted with Financial Services and have receivedassurances that this new system can easily be implemented.
1. The amount of each grant awarded will be transferred, under thegrantee s name, to an individual sub account of the Committee’s account.To withdraw money from the account, the grantee must present documentationand a request form signed by the chair of the Committee (or otherdesignated member of the Committee). Before signing the request form, thechair of the Committee (or designee) will check the account records toensure that the withdrawal is consistent with the proposed budget approvedby the Committee. (S)he will also keep copies of the documentation andupdate the Committee’s account records. (This process is thus very similarto that for withdrawing money from departmental accounts.)
2. A grantee must operate within the line items of the budget approvedby the Committee. Any budgeting change requires Committee approval. TheCommittee will entertain and periodically review requests for budgetchanges.
3. Each applicant for a grant is required to provide a terminationdate for the grant. The account of a grant recipient will be closed on thetermination date, unexpended funds reverting to the Committee’s mainaccount. As with budget changes, the Committee will periodically reviewrequests for extensions. Ordinarily, the Committee expects grants to havea maximum life of two years.
4. An award for incidental expenses (a so-called E-Z formreimbursement ) will be disbursed as a check to the recipient. The chairof the Committee will submit a standard check request form to FinancialServices and keep appropriate documentation and records for these expenses.
5. Summer stipends, once awarded, will be processed through thepayroll office.
Proposed Changes--The Transition.
We propose to institute the new system as follows. (As with the above changes, we have verified with Financial Services that there are no technical obstacles to what we propose.)
1. All new grants, stipends, and incidental reimbursements will beawarded according to the new system.
2. All currently existing research accounts will be closed on May15, 1998, the balances remaining on that date being transferred to the mainR&D account.
3. Until May 15, 1998, holders of existing research accounts may usetheir research accounts as in the past.
4. Faculty members who have research accounts containing money notawarded by the Committee and who have a legitimate need to keep this moneyin a College account may open a separate account (through financialservices) and transfer the money to this new account.
5. For faculty members who anticipate having unexpended R&D grantmoney on May 15, 1998, the following apply:
A. If the project for which the grant was awarded will be complete by May 15, 1998, then the faculty member need do nothing; the unexpended money will automatically be returned to the R&D coffers.
B. If the project for which the grant was awarded will not be complete by May 15, 1998, then the faculty member must consult with the chair of the Committee to set up a new account according to the new system of accounting. In setting up the new account, the chair of the Committee and the faculty member will agree to a termination date for the project and a budget for the remaining funds. This agreement will be based as closely as possible on the original grant proposal.
Final Comments. The changes proposed here are the result of deliberationswithin the Committee that have occurred over the past year and haveinvolved consultation with the Academic Dean, former AVP Ed Ryan, and AlanKenyon of Financial Services.