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Commercial Research Activities Expenditure Guidelines

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Section 1 - Purpose

(1) These Guidelines:

  1. support the Commercial Research Policy; and
  2. specify the nature of expenditure that can be derived from commercial research activities income.

(2) Commercial research activities fall into two categories:

  1. contract research activities; or
  2. consultancy activities.

(3) Contract research activities are those that meet the Higher Education Research Data Collection (HERDC) definition of research. Those commercial research activities that do not meet the HERDC definition of research will be classified as consultancy activities.

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Section 2 - Scope and Application

(4) These Guidelines stipulate:

  1. the control of commercial research projects in the University’s financial management system;
  2. the nature of expenditure which is appropriate from Commercial Research Project Accounts;
  3. the controls that should be exercised in approving expenditure from such accounts.
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Section 3 - Control of Accounts

(5) Commercial Research Project Accounts are controlled by set procedures.

(6) Commercial Research Project Accounts must be approved by one of the below staff members in order to be opened within the financial management system:

  1. Corporate Management Accountant; or
  2. Senior Manager, Operations and Research Accounting; or
  3. Research Accountant; or
  4. Commercial Accountant.

(7) Requests for expenditure are managed in accordance with the Delegations of Authority Policy and established procedures. This ensures probity of expenditure and that sufficient funds are available in Commercial Research Project Accounts to cover the expenditure required.

(8) Commercial Research Project Accounts will be managed in accordance with the corresponding Contract Research Costing Pro forma or Consultancy Costing Pro forma.

(9) A range of expenditure items must be costed and charged to consultancy and contract research activity project accounts. These include all costs included within the Contract Research Costing Pro forma or the Consultancy Costing Pro forma.

(10) Expenditure and cost recovery of salary costs will be undertaken in line with the appropriate Contract Research Costing Pro forma or the Consultancy Costing Pro forma. Specifically:

  1. where salary costs included in the costing pro forma relate to staff who will be directly employed on the project, these staff members’ salaries will be required to be charged directly to the applicable contract research or consultancy activity project account directly via People and Culture Division processes.
  2. where salary costs included in the costing pro forma relate to continuing or fixed term staff funded through other UOW or external funds, these costs will be transferred to accounts in accordance with the Table of Rates or will be otherwise managed as required to meet third party obligations. The amount transferred will be at cost recovery rate, i.e. the direct costs only.

(11) As outlined in the Commercial Research Policy, a Faculty Cost Recovery (Indirect Cost) is required to be applied.

(12) All contract research activities must include indirect costs (per the Table of Rates) as calculated in the Contract Research Costing Pro forma. This Indirect Cost will be disbursed from the contract research activity project as specified in the Table of Rates.

(13) All consultancy activities incorporate an Indirect Cost at a rate as specified in the Table of Rates. This Indirect Cost will be disbursed from the consultancy activity project account as specified in the Table of Rates, except where the consultancy is undertaken by Consultancy Business Centres, which will be managed under a separate process.

(14) For contract research, in exceptional circumstances, a request can be made to waive the Faculty Cost Recovery fee. This must be done via the submission of a Faculty Cost Recovery Waiver form and is subject to approval in accordance with the Commercial Research Policy. The Deputy Vice-Chancellor (Research and Innovation) will be advised of waivers approved by faculties where the contract value exceeds $50K.

(15) All consultancy activities (except where the consultancy activities are undertaken by Consultancy Business Centres) must include a minimum Consultancy Overhead, as specified in the Table of Rates and calculated in the Consultancy Costing Pro forma. In exceptional circumstances, a strategic discount may be applied, with the written approval of the Deputy Vice-Chancellor (Research and Innovation). The remaining Overhead will be transferred to the associated Residual Balance Project Account. Academic Project Managers can utilise these funds after reconciliation of accounts at the Project Term, in accordance with the Residual Balance Projects Expenditure Guideline.

(16) Where an Overhead has been included and clearly defined within a Contract Research Costing Pro forma for a contract research activity, then this will be transferred to the associated Residual Balance Project Account. Academic Project Managers can utilise these funds after reconciliation of the accounts at the Project Term, in accordance with the Residual Balance Projects Expenditure Guideline. 

(17) Where an Academic Project Manager receives funds to a Residual Funds Project Account, these funds will be required to be utilised within a three (3) year period.

(18) At the end of the Agreement Term, and prior to the end of the Project Term, Financial Services Division will conduct a reconciliation of funds. If surplus funds are identified, then the Academic Project Manager can utilise these funds from a Residual Funds Project Account at a later time, in accordance with the Residual Balance Projects Expenditure Guideline.

(19) If staff members undertake Minor External Work, this income may be placed in a Staff Consulting Project Account.

(20) Any equipment purchased from Commercial Research Project accounts remain the property of the University.

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Section 4 - Expenditure from Accounts

(21) A range of expenditure items must be charged to consultancy and commercial research activity project accounts.

(22) All costs included within the Costing Pro Forma must be charged to the applicable individual project account.

(23) The following types of expenditure are permitted for Staff Consulting Project Accounts and Residual Funds Projects Accounts (in addition to expenditure allowed under the Acceptable Expense Guidelines):

  1. salaries and wages (including overtime and other oncosts) of staff;
  2. equipment - calculators, computers, electronic work organisers, teaching aids, audio/visual items;
  3. books and journals;
  4. professional subscriptions;
  5. travel and entertainment expenses in accordance with the Travel and Entertainment Policy;
  6. conference fees and other self-education expenses;
  7. stipends.

(24) Requests for expenditure from a Staff Consulting Project Account and Residual Funds Project Account must be approved through the Head of School (or equivalent functional unit manager, and/or higher delegation band if required) and are managed in accordance with the Delegations of Authority Policy and established procedures. This ensures probity of expenditure and that sufficient funds are available to cover the expenditure required. Whilst funds may be applied on an as-needs basis, consideration should be given to locally strategic use of funds. 

(25) Any equipment purchased from staff consulting project accounts remain the property of the University.

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Section 5 - Expenditure Control

(26) All purchases and payments must be made in accordance with University Policy documents, specifically the Purchasing and Procurement Policy, Acceptable Expense Guidelines and Travel and Entertainment Policy.

(27) All transactions must be evidenced by tax invoices/receipts from suppliers of goods and services.

(28) All expenditure must be approved in accordance with the Delegations of Authority Policy.

(29) No staff member can approve their own items of expenditure.

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Section 6 - Carry Forward of Commercial Research Project Account Balances

(30) Contract Research Activity Project Account balances will be carried forward until the end of the Project Term, and in accordance with any contractual obligations.

(31) Consultancy Activity Project Account balances will be carried forward until the end of the Project Term. 

(32) Staff Consulting Project Account, Residual Balance Project Accounts and Residual Funds Project Account balances will be carried forward in accordance with the Residual Balance Projects Expenditure Guideline.

(33) Consultancy and Commercial Research Activity Project Accounts will remain active for the duration of the Project Term.

(34) The balance of accounts will be determined by reviewing the income and expenditure over the relevant years of the project account.

(35) Project accounts may include accruals of income or expenditure to reflect the current progress of a project. If this is the case, any balance is not to be assumed as funds available for a particular staff member’s benefit.

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Section 7 - Roles and Responsibilities

(36) Roles and responsibilities are as detailed in these Guidelines.

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Section 8 - Definitions

Word/Term
Definition (with examples if required)
Academic Project
Manager		 The staff member who is the lead investigator and will take overall responsibility for ensuring that the Commercial Research activity complies with this Guideline.
Agreement Term The period, as defined by the start and end date within the applicable agreement or contract.
Commercial Research
Research activity conducted under a commercial contract that includes, but is not limited to:
  1. Consultancy;
  2. Licensed Consultancy;
  3. Contract Research with government, non-government and/or private sector entities, including contract research which is funded through grants awarded to industry;
  4. Collaborative research with government, non-government (including other universities) and/or private sector entities; or
  5. Cooperative Research Centres (CRCs).
This does not include:
  1. research conducted under Australian Research Council competitive grants or other grant schemes.
  2. Private Consultancy.
Consultancy
Any project that involves an external entity buying the skills and expertise (pre-existing know-how) of Staff members, and/or use of UOW equipment to work on a specified project. Consultancies generally involve the application of existing knowledge, and do not normally lead to the development of new IP.
Consultancy Business Centres Organisational units, determined by the Deputy Vice Chancellor (Research and Innovation) to require consultancy processes based on their operating models and strategic requirements to support their budget.
Consultancy Overhead
UOW is committed to a general policy of fully costing all externally funded Commercial Research Activities.
This overhead implements an appropriate commercial value on UOW staff time and resources and will ensure UOW's obligations to maintain competitive neutrality are met.
This will be charged as a minimum in accordance with the Table of Rates.
Contract Research
Research that is conducted by UOW at the request of and paid for by external organisations. Such research may involve IP ownership negotiations, and confidentiality and publication restrictions.
Contract Research generally involves a greater level of originality than a Consultancy and will lead to the development of new IP and generally results in R&D outputs as defined in Appendix 2 of the Commercial Research Policy.
Commercial Research Project Accounts
Individual project accounts that are established in the University’s financial management system to control the expenditure from Commercial Research activities. These projects can include:
Contract Research Activity Project Account:
• This type of project account will be used to manage the costs included within the Contract
Research Costing Pro forma or Conditions of Grant form attached to individual contract research
contracts and agreements.
Consultancy Activity Project Account:
• This type of project account will be used to manage the costs included within the Consultancy
Costing Pro forma attached to individual consultancy contracts and agreements.
Staff Consulting Project Account:
• This type of project account can receive funds in relation to any minor external work or
miscellaneous consulting work undertaken.
Faculty Cost Recovery (Indirect Cost)
The cost recovery fee applied to Commercial Research to reimburse the associated support costs.
Support costs include but are not limited to the costs of maintaining equipment, electricity, computers, IT/network services, laboratories, offices, cleaning, printers, human resources, telephones and the provision of contract and research business development support.
Note that the Faculty Cost Recovery is not intended to cover the costs of purchasing items of equipment, computers or refurbishments to accommodate new staff involved in the Commercial Research project. Such additional costs must be charged to the Client as “other” costs in the Commercial Research Costing Pro Forma. These Indirect Costs are incorporated in the Consultancy Costing Pro Forma and cannot normally be waived.
Faculty Operational Project Account/DVC-RI account Individual project account(s) established in the University’s financial management system that form part of the faculty’s annual operational budget.
Research
Creative and systemic work undertaken in order to increase the stock of knowledge, including knowledge of humankind, culture and society, and to devise new applications of available knowledge.
An activity must meet all of the following and be:
1. novel: aimed at new findings.
2. creative: based on original, not obvious, concepts and hypotheses.
3. uncertain: uncertain about the final outcome(s).
4. systemic: planned and budgeted.
5. transferable and/or reproducible: lead to results that could be possibly reproduced.
As defined by HERDC.
Licenced Consultancy
A Consultancy for a specific activity or series of activities, that can be provided by UOW in the same form to a range of clients, typically over a one (1) year period with minimal administration. Examples of activities in this category include, but are not limited to:
- chemistry mass spectrometry facilities;
- the drill rig in Geosciences;
- XRF equipment;
- training workshops on specific transnational crime prevention issues;
- provision of scientific reports on functional foods; and
- concrete testing in Civil and Mining.
The administration is reduced as only one Commercial Research Approval Form needs to be completed each year (so long as the activities are the same for all clients) and a standard non-negotiable contract covers these activities, which can be used with multiple clients.
License renewals are to be submitted every 12 months or on the relocation of the nominated Project Manager, whichever is the sooner.
Minor External Work As defined in Section 17 of the Commercial Research Policy.
Overhead
UOW is committed to a general policy of fully costing all externally funded Commercial Research
Activities.
An Overhead (expressed as a percentage of direct plus indirect costs) implements a competitive commercial value on UOW staff time and resources and will ensure UOW's obligations to maintain competitive neutrality are met.
Private Consultancy
Private advisory or other services in relation to business, research, commercialisation or start-up activities that are undertaken by academic Staff in a private capacity and not through their employment with UOW. Please see Secondary Employment Policy for further details regarding declaration and management of private consultancies. 
Project Term
The period as defined by the start and end date within the applicable agreement or contract plus additional time required to fully reconcile the project account.
Staff Consulting Project Account An account established to manage funds received for Minor External Work.
Surplus Funds Remaining funds in a Contract Research or Consultancy Activity Project Account after all costs and
disbursements have been made in accordance with the applicable Costing Pro forma.