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Home Back Issues No. 35: Can you offer advice or strategies to help PIs with financial record-keeping?

Jun 28

No. 35: Can you offer advice or strategies to help PIs with financial record-keeping?

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Can you offer advice or strategies to help PIs with financial record-keeping?

Reader Question: I do a good job recording my research data, but can't say the same when it comes to my lab financial records. Do you have any advice or strategies for PIs on maintaining their own financial records in addition to those kept by the fiscal office?

Expert Comments: Financial record-keeping is part of a principal investigator’s responsibilities. While the fiscal office maintains records and can help, don't depend on that office to monitor your expenses. You are ultimately accountable.

PIs usually are required to manage the budget according to the terms and conditions of the award, so make sure you understand those terms. Look into your institution’s record-retention policy and schedule to learn what type of financial records will be acceptable and how long you need to retain each record.

The National Institutes of Health (NIH) requires grantees to keep records for three years, but some institutions require them kept for up to five years.

Are you named as the fiscal officer of your grant? Many PIs are. If so, you have an even stronger obligation to keep accurate financial records.

The PI as fiscal officer must ensure that the account is never overextended. If that occurs, or if there is spending for unauthorized purposes, he or she will have to appeal to the department chair or dean to cover those costs.

Another reason for keeping accurate records is that the NIH might conduct an audit. When it reviews your quarterly reports, it may consider how well you manage expenses in determining whether to continue funding your project.

Your institution may have record-keeping forms on hand that you can use, or that it recommends. To obtain them, check the institution's Web site or contact the fiscal office or similar department.

Here are some specific suggestions to guide you, most of which come from the NIH itself.

Using the same budget that was used for the proposal to secure your grant, make a checklist of all the categories in that budget and then keep track of each expenditure under every category. For example, regularly record all direct costs like these:

  • Personnel Salaries
  • Equipment
  • Travel
  • Transportation
  • Material and Supplies
  • Publications
  • Subcontracts
  • Consultant Services
  • Computer Services
  • Communications
  • Repairs and Maintenance

There are several kinds of software that can make your job easier. For example, the query tool on Peoplesoft can help you extract financial data. If you do not have Peoplesoft, there likely is a similar tool on the software your facility uses.

As you monitor, be sure to consider your rate of expenditures, spreading them wisely over the allotted time period of the grant. The NIH suggests asking yourself questions like these: Am I pacing myself? Am I spending too much money in the first month or two of the project? Am I not spending the money fast enough?


Comments by Melissa Fleischer, Esq., President, HR Learning Center, Rye, N.Y.

Additional comments: Substantiate dollars you spend on salaries. Avoid overspending in any one area. If you overspend, your institution probably will seek that money from your department if the grant disallows it.

Carefully work with your accounting department to make sure you’ve correctly budgeted. If you need to make changes, talk to your program officer. In many cases, he or she will work with you and answer any questions, particularly if you keep them informed of your progress.

Be careful about spending money on people and supplies that won’t look good to independent observer. For example, don’t buy supplies from a vendor for whom you serve on the board or in which you have a personal stake. And don’t hire relatives, no matter how qualified.

Especially if your project is large and complex, it may be wise to have an outside, independent evaluator examine your records occasionally and make recommendations. While it may cost 8 percent to 10 percent of your budget, it can be money well-spent.

Keeping your own records in good order can be arduous and painful, but you must do it. You can’t fully delegate this task to your institution’s bookkeepers. Your own records will give you much better credibility if you must justify expenditures.

Always plan for, and be prepared for, an audit.

These comments are from Stacy Abate, director of grants, Georgian Court College, Lakewood, N.J., excerpted from her May 27 audio conference for Principal Investigators Association. Copies of the full conference are available on compact disk, MP3, and in PDF format.

Expert comments coming the week of June 28.

Comments (7)
written by Observer, June 28, 2010
i would simply request the department head or university for administrative support to manage your grants as you should not really be spending your time doing that stuff. If the university cannot or refuse to provide such support, they are not providing you with some of the basics needed to run an efficient research lab and you ought to consider moving your lab to a university or institution where such support is provided. I take it for granted that I can walk into my administrators office and request her to pull or generate any financial records for my lab expenses. The Expert Stacy Abate suggests hiring an outside evaluator at 8 to 10% of your budget - I disagree. If you're funded by NIH, I'm not sure you can even do that on an R01, although you can on program project grants etc.
Analyst at a PUI
written by ST, June 28, 2010
Asking your administrative staff is a great first choice if your institution is set up that was, especially if your F&A; dollars are supposed to be paying for that service anyway.
If you come from a predminantly teaching university or a non-profit that does not do much research, you may not have that structure.
I use Quicken myself and highly recommend it for faculty. Just delete the pre-packaged categories and replace them with your institution's bare-bones expense codes. Load the project as a checking account. Load the budget as a deposit with expense codes.
Cheap, flexible, easy to learn software that lets you run any report you can dream up.
PIs tracking funds? unrealistic
written by PI at large institution, June 28, 2010
I dont know about other institutions, but it is impossible to get good accounting information, up-to-date information, or accurate information from the fund accounting office at my institution. As I understand it, NIH does not permit hiring someone on a grant whose job it is to track funding on an NIH grant except for special circumstances (eg, a CRC). That is what indirect costs are for. I would argue that since an NIH grant is given to the institution, not to the PI, it is the institution's responsibility to keep track and keep the PI informed of how funds are being spent and amounts. I know my institution's fund statements are so obscure that even the departmental people cannot always understand them.
Director, Deafness Cognition and Language Research Centre, UCL
written by Bencie Woll, June 29, 2010
You should ask your institution to offer a relevant training program as part of staff development or at least to contribute to the costs of your undertaking an outside course. It may be possible to cost this into your grant.
VP, R & D
written by Steve Lane, June 30, 2010
Set up an Excel spread sheet to keep track of your expenditures and how much remains on your grant. Enter every charge, in excruciating detail. It will be time well spent. Don't depend on anyone else to do it for you - need I tell you why?
Associate Dean
written by John, June 30, 2010
It is always incumbent upon the PI to track his/her expenses. It is not the responsibility of a staff member to tell you when you have expended all your funds. Indirect costs are associated with the infrastructure to process grants and support the PIs negotiating with the granting agency and the submission of the grant. It is the PIs money to spend and therefore the PIs money to track.
P.I., professor
written by Debra Fischer, July 12, 2010
The PI is responsible for their grants, so I have started keeping track of grant expenditures with Google docs. Anyone in my lab who makes a purchase is responsible for uploading the receipt and recording that purchase on a master spreadsheet.

In Google docs, I have spreadsheets set up for each individual grant (the initial budget spreadsheet can be uploaded as an excel spreadsheet) when it is awarded. We have a filter from one column of the master spreadsheet that automatically pipes expense entries to the individual grant sheets where running balances are automatically updated.

After the initial setup, it doesn't take long to maintain this and I share the document with the department admin support (they prepare expense reports).

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