Departmental Projects

 

departmental projects flowchart

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Introduction

A 'departmental project' in Oracle is a project set up to collect cost information that is not Capital Building or Research related, although the Oracle functionality is very similar.

Departmental projects should be used only where there is a set amount of money, available for a set period of time, and for a specific purpose. It may be externally or departmentally funded.

There are three main types of departmental project:

  1. Standard departmental projects: for example where departmental funding has been identified for a refurbishment or other specific piece of activity that is not business as usual.
  2. John Fell funded projects: Departments should manage transactions for such projects as per the standard departmental projects detailed in the following pages.
  3. Studentships - Please refer to the relevant section for details.

The decision to handle an activity as a ‘departmental project’ must be agreed jointly by the department and the divisional finance team.

A departmental project in Oracle is a project set up to collect cost information that is not Capital Building or Research related, although the Oracle functionality is very similar. Costs are collected in the projects module and then posted normally to the General Ledger overnight.
The main benefits of managing departmental projects through the projects module are for reporting over the lifetime of a project rather than on a calendar year basis and in tracking costs, especially when there is a series of activities within a project.

A departmental project can be externally funded or departmentally funded.

Externally funded projects sit on the A2 Ledger and included John Fell, VC Divesting Fund, and the Higher Studies Fund. These externally funded projects release revenue to the departments income to match the spend on the project. Both costs and income are coded to XX9982.

Internally funded projects sit on the A1 Ledger and DO NOT release any matching revenue to net off with the expenditure. Costs are coded to XX9981.

If the answer to any of the following questions is YES, then standard departmental projects via the projects module may be appropriate:

  • Is a high level of expenditure control required?
  • Will the activity cover more than one financial year?
  • Is detailed financial analysis/reporting required?
  • Are more than 10 invoices expected during the life of the activity?
  • Is there the possibility of more than one department being involved?
  • Is the activity involved a one off project rather than recurrent?

Alternatively, the activity could be managed through the General Ledger, either by cost centres or source of funds.

Note: 

Departmental project functionality must specifically not be used for residual research awards. Costs must not be posted to the Pre-Award account for this type of project.

 

All set up of departmental projects (including the set up of associated agreements and budgets) will be managed by Research Accounts, in discussion with the departments and divisions to understand their requirements.

Complete Departmental Project Setup form

A DPF1 - Departmental Project Set-Up form (XLSX) should be completed by the Departmental Administrator to ensure that Research Accounts is provided with all the information needed to set up the project on Oracle Financials. Help with how to use this form can be found in the DPF1 - User Guide (DOCX).

For externally-funded departmental projects, a Departmental Project Customer Setup form (XLSX) should also be completed by the Departmental Administrator and returned to Research Accounts so that the funder of the project can be set up on Oracle Financials. Documentation from the sponsor also needs to be provided before set-up and sent to Research Accounts along with the funder's Purchase Order reference.

Note: Requests to set up a departmental project which have not already been discussed with the Divisional Office will be referred back to the Departmental Administrator for further discussion to ensure that this is the best approach for that particular situation.

Validate set up

It is essential for departments to verify that the set up of the project is in line with their understanding and to liaise promptly with Research Accounts over any issues.

Staff Allocation

It is important that the cost allocation of any staff who are to be charged to the project, once it has been set up, is updated in CoreHR. Over the lifetime of the project, appropriate cost allocation changes will be required as and when new staff are to be charged to the project or leave the project. Contact your local HR Officer to manage this change.

All purchase requisitions, invoices, etc. should be managed as per the Purchase to Pay process.

Manage suspense accounts

Failed transactions will be posted to the departmental suspense account which should be routinely checked/cleared to ensure that all expenditure is allocated to the correct project as soon as possible.

Validate expenditure

Any misposted costs should be transferred between project accounts as necessary. You should maintain a full audit trail and supporting documentation for any transfers. GL Journals to XX9981 and XX9982 are not permitted. Please contact Research Accounts for further guidance on journals for Departmentals Projects. 

Billing

If billing is required in relation to a project complete a form and submit to the Research Accounts team.

For Studentships/DTAs draft invoices for cost-based billing will be submitted to the Research Accounts team for validation.

As with set up, any changes to a project must be carried out by Research Accounts. This includes changes where:

  • The level of the funding needs to be amended (increased or decreased)
  • Further tasks need to be added
  • The end date of the project is changed
  • Timing of budgets need to be changed

Complete a DPF2 - Departmental Project Adjustment form (XLSX). Help with how to use the form can be found in the DPF2 - User Guide (DOCX).

As with the set up of a new project, once the changes have been made to the project you will be notified and it is important to verify that the changes are as expected and to liaise promptly with Research Accounts over any issues.

Departmental Indirect Projects process and system change

A change has been made to the Departmental Indirect Projects process to allow manual matching of income to spend on xx9981-99600. Since R12 went live the use of Departmental Projects has increased dramatically and continues to do so. This has led to a number of departments raising the issue of not being able to match departmental funding to the spend on ‘Indirect Projects’, ie internally funded projects. In direct response to the issues raised by users, a change has been made to Departmental Indirect projects to allow the posting of matched spend to natural account 99600.
 

Departmental reports

Oracle Financials reports are available to support the financial management of projects. The key reports are:

UO Project Status & Activity - This report provides award summary information with the option of showing month-by-month expenditure by budgetary categories. The report will enable the department to identify the amount of expenditure to date on the grant and the remaining funds available for non-staff items, having taken purchasing commitments into account. At present there is no mechanism for loading salary commitments into Oracle Projects, so departments should be reminded that the staff costs may well be fully committed, even though they are not shown as such on the report. The report also enables departments to analyse project costs by task and expenditure category and to highlight overspend/underspend on a project or where the project may run the risk of being over/under spent.

UO Actual Expenditure - This report provides detailed transaction information on actual project expenditure within an accounting period. This is a useful report for finance officers who want to run an enquiry into expenditure against a particular award.

UO Projects Management Overview - This report gives a top level summary of a specified group of projects such as Department or Type. It includes budget, actuals, start and end date etc.

Review and reconciliation

As per the Purchase to Pay process it is important that all open purchase orders are regularly reviewed. Essentially, towards the end of the project all outstanding transactions must be addressed and any remaining Purchase Orders appropriately managed to ensure they are closed/matched before the project can be closed.

Where relevant, expenditure should be reconciled to invoiced amounts and cash received.

Year end

For projects that are running over the year end, it is important to ensure that the appropriate accruals are posted.

Departments must ensure that all expenditure has been completed and fully reconciled to cash received. The Finance Division will close down the project and, where relevant, let you know how much money should be returned to the original funding source.

For Studentships/DTAs Je-S reporting will be completed by the Research Accounts team who are responsible for these types of project.

Budgets/actuals will be adjusted to clear over- and underspends on the finalised project if required.

If the project is to be capitalized the Fixed Asset Accountant will manage this is in association with the Division as required.

  1. The controls that are embedded in the Managing departmental projects process are listed below. When following the Managing departmental projects process, staff should ensure that all of these controls are in place.  The decision to handle an activity as a ‘departmental project’ should be agreed jointly between the Department and its divisional finance team.
  2. The Departmental Project Setup form (DPF1) (XLSX) must be completed and authorised by the Departmental Administrator.
  3. Following notification from Research Accounts that the project has been set up in Oracle, the set up should be checked by the department to ensure it is in line with the DPF1 and their understanding of the project. Any issues should be notified immediately to Research Accounts and rectified.
  4. Project expenditure follows the University's Purchase to Pay and Pay Expenses processes and is monitored against budget and funding.
  5. Project journals and transfers should be appropriately reviewed and authorised, and actioned on a timely basis in line with all accounting procedures. A full audit trail of posting should be maintained.
  6. Departments must ensure that all expenditure has been completed and fully reconciled to cash received prior to initiating project close down by Research Accounts.

Segregation of Duties

One of the key financial control principles to be adopted in all University finance processes is the need to ensure no single member of staff completes all stages of any particular process. This principle requires an adequate 'segregation of duties' when designing work flows, ensuring that authorisation of transactions are separate from processing of transactions and reconciliation to project totals.

For further advice on this subject please contact Financial Assurance.

 
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