ASIAN INSTITUTE OF TECHNOLOGY
POLICY AND PROCEDURE STATEMENT Reference
AA
Issued By
PRESIDENT
Section
5
Responsible Officer
VP-Academic Affairs
2-1
Date Issued
13 May 2003
11
Date Revised
16 December 2020
Serial No. Academic & Administrative Affairs No. of Pages
TITLE:
I.
EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
PURPOSE To describe policies and procedures (P&P) governing the implementation of externally sponsored and contracted projects such as research and development, trainings / workshops, and conferences.
II.
DEFINITIONS Research and development, training and conference activities at AIT are meant to meet the educational mission of the Institute. The quality of teaching at the Institute and the viability of its graduate programs are directly related to the quality of research and scholarship of its faculty. There are basically three different types of research which are recognized and supported by the Institute. 1.
First is “Independent Research”, which is based on the faculty’s interests and capabilities in the academic fields of the Institute. This is usually carried out in conjunction with student research.
2.
The second is “Sponsored Research”, which is based on specific areas of interests of the Institute, mainly funded by sponsors, and supplemented by Institute subsidies. Research may be sponsored by a government agency, private or non-government organization, foundation, or individual. Sponsored research and development projects are based on problems relevant to the development of the region and to the education of AIT students who are being prepared to participate in the development of their own countries. Such research and development projects involve faculty, research staff and students, the participation of the latter to be as part of their master or doctoral degree requirements. The direct beneficiaries of research output are the profession, society or country.
3.
The third type is “Contracted Research”, which is based on the specific needs and interests of external clients who underwrite the cost of the research in return
Page 1/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
for access to the results. The external client expects to benefit from the research delivered to the client, usually in the form of reports, softwares or prototypes. Contracted research may entail confidentiality and restriction on publication. Generally, trainings and conferences conducted by the Institute are of the sponsored or contracted types of activities.
III.
POLICIES A.
General 1.
Conduct of professional activities, including sponsored and contracted research and development, training and conferences, and academic programs is one of the duties and responsibilities of a faculty member, and is considered in the faculty performance evaluation. The faculty in-charge of a particular project is known as the Principal or Project Investigator (PI), or a Course Coordinator (CC) in the case of training/workshop and/or conference. A PI / CC may or may not have co-PIs or co-CCs.
2.
Under the Responsibility Center Management (RCM) scheme, all income to AIT comes from School activities: scholarships; overheads from projects, trainings/workshops, conferences, personal consultancy; payroll recovery; surplus; degree surcharge; and other incomegenerating activities.
3.
Faculty members are encouraged to initiate revenue generating activities for the Institute and are allowed to obtain both direct (honorarium) and indirect incentives (Professional Development Fund) from these activities.
4.
Faculty members who serve as project PIs/co-PIs are credited the following components according to one’s involvement in the project: project-supported scholarships; project-funded full-time faculty; project-purchased equipment; payroll recovery cost; project overhead;; and project surplus/deficit. Details are stipulated in the P&P on Faculty Financial Productivity (PA-1-2-8).
5.
The P&P on Direct and Indirect Incentives (FB-4-2-1) sets forth guidelines on direct (honorarium) and indirect incentives (professional development fund) from approved revenue-generating Institute activities, e.g. sponsored/contracted projects, customized degree programs, professional development programs for the benefit of external clients, and the like.
Page 2/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
B.
Project Formulation / Proposal Preparation 1.
At the proposal stage, the PI/CC takes responsibility in ensuring that the technical content and correctness of the proposal conform to the sponsor or client’s specifications and formats. Likewise, the PI/CC ensures timely submission of progress and final reports to the sponsor or client.
2.
The School Dean/Director concerned is responsible for seeing that the project fits the purposes of the Institute and is administratively feasible, checking that the budgets (both external and internal) are adequate, and that the rules and regulations of the Institute are followed.
3.
The proposal should state the purpose, the outline of the research, and include a budget, which is a realistic account of all costs involved, prepared in accordance with Institute guidelines and policies.
4.
The proposal may include the following headings: • • • • • • • • • • • • • •
5.
C.
Title Page Preface / Introduction Statement of Problems or Need Objectives Scope of Work Methodology Work Plan / Schedule of Work Reports Cost Estimate / AIT Contribution Terms of Payment Liability Clause Responsibility of AIT on Non-completion Right of Publication, Licensing, Patenting, etc. List of Principal Investigators
All project proposals from AIT faculty and staff should be submitted with the requisite documents through the Office of the Vice PresidentAcademic Affairs for information, towards obtaining the approval and for it to be duly signed by the President, if required, or his authorized representative.
Project Agreement / Contract 1.
All Memoranda of Understanding (MoU), contracts or agreements for externally sponsored and contracted activities between the sponsoring / contracting agency and AIT will only be signed by the President or his/ her authorized representative. Contracts or agreements which are not signed by the AIT President or the President’s authorized representative are not legally binding to the Institute.
Page 3/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
2.
All contracts should adhere to the Institute bye-laws and established administrative policies and procedures.
3.
Each contract shall include a liability clause as follows: “In case the sponsor of a project is to terminate the project contract prematurely, AIT shall not be held responsible for adverse consequences of carrying out the work under the project, or for the occurrence of hindrances or obstacles in technical matters and in their application, or for the results of the project, and the sponsor shall be responsible to pay for all costs committed by AIT for the project whether they are already paid or not.”
D.
4.
Outright grants or the fixed-fee type of contract is encouraged. Grants are the least restricted form of contribution and restrict neither the budget (other than to an upper limit) nor the scope of work (other than to a general area of endeavour). Fixed-fee contracts do not restrict the budget (other than to a fixed all-inclusive amount) but do restrict the scope of work to a specific project.
5.
The cost reimbursable contract is also accepted if it is closely related to an academic activity of the Institute. This form of contract restricts expenditures to a specific budget and generally requires that unexpected balances be refunded to the sponsor at the end of the project.
Sub-Contracts 1.
In general, AIT projects shall not have subcontracted activities in disproportionate scope compared to those to be carried out by AIT itself. The Institute should take in sponsored/contracted projects with at least 50% of the projects’ personnel time requirement coming from internal resource persons (Institute employees). As much as possible, subcontracts and joint ventures should not be more than 50%. The subcontract, if any, shall be signed by the President or by his authorized representative.
2.
The P&P on Sub-Awards (AA-5-2-2) sets forth a policy for the granting of Sub-Awards and/or agreeing to collaborate with third parties in relation to any externally sponsored and contracted project (“SCP”) under Fund 30.
3.
It is the responsibility of the PI to make sure of the adequacy of the budget. The Dean/Director concerned is responsible for seeing to it that the project is administratively feasible, verifying that the budgets (both external and internal) are adequate, and that the rules and regulations of the Institute, as well as the agreed terms and conditions of the sponsor/client, are followed.
Page 4/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
E.
4.
The Dean and PI should make efforts to disseminate the results of the project unless otherwise stated in the contract with the sponsor/client.
5.
All Institute-funded staff are encouraged to actively seek out projects in their areas of specialization along with faculty at AIT.
Opening of a Project Account and Internal Budget a)
Policy on Cash Advance 1.
Activities related to the conduct of sponsored and/or contracted projects will not be subsidized by AIT.
2.
Expenditures will only be allowed if the first instalment is already received.
3.
Before any expenditure is allowed to the project at account opening, a cash advance of 25% on the total project budget is required.
4.
Exceptions can be made for certain projects (e.g. Japanese funded) wherein the donor will only transfer the amount at the end of the project and/or after submission of the final report.
5.
The PI and the School Dean/Director should clearly highlight and mention this prior to contract signing stating that whenever, for certain reason, the full amount of the project will not be transferred to the Institute, the PI will be personally responsible for it.
6.
To prevent eventual project deficits that must be absorbed by the Institute, PIs should, at the time of submitting the proposal to the client, plan the project cash flow properly to ensure healthy cash flow at all time.
7.
However, if any PI comes across a situation wherein the projects need to spend in order to request for the final instalment from the sponsors, the PI should prepare a promissory note (PN), through the endorsement of the Academic Program Chair and the Dean, for the Vice President- Academic Affairs’ approval. With the PI’s guarantee through a PN process, the PI will take full responsibility for any deficit at the end of the project.
8.
If the deficit can be proven to be a force majeure, the Academic Program, School, and the Institute will share the responsibility according to the method used for sharing the net surplus/deficit from operations.
Page 5/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
b)
9.
Any costs incurred by AIT in relation to the implementation of project activities shall be recovered.
10.
Existing projects with cash deficits at year-end are required to request advances from sponsor/client to cover the expenditures. Project accounts of existing projects with deficit will be deactivated if this requirement is not met.
11.
Expenditures of project with deficit beyond the expected instalment period will not be allowed.
Internal budgets and Revisions 1.
An internal budget approved by the School Dean / Director must be on file with the Institute for every project and will form the basis of allowable expenditures for the project. With the current approval procedures, this requires completing Institute project Forms A to C, as needed.
2.
Project accounts. On the basis of Forms A to B, PIs can open a project account by which projects can financially operate. The project accounts are deactivated three months after the approved project period unless prior approval for extension has been sought.
3.
For research and development, trainings / workshops and conference projects under Fund 30, an overall (estimated) budget, indicated in the project Form B, will be made after the project contract is signed between the Institute and the donor. A separate budget Form C and Internal Budget Revision Form will be filled after each instalment is received.
4.
The typical costs for running projects, according to their category, in a School, Academic and Outreach Centre are described in the Annexes.
5.
Faculty / Staff Time Recovery. All budgets should include faculty / staff time charge. The only allowable exception is the case of seconded faculty who has received prior permission to work in the project by their sponsors.
6.
Centrally-Funded Staff. Upon provision of a rationale, and provided primary duties and responsibilities are satisfactorily carried out, a centrally-funded (Fund 10) staff member is allowed to be involved in and earn direct (honorarium) and indirect incentives (professional development fund) from approved revenue-generating Institute activities, e.g. sponsored and contracted projects, academic programs, professional
Page 6/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
development programs, and the like, up to, but no more than, 20% of his/her full year employment (i.e. 2.4 man-months). 7.
Fixed Assets. Title to equipment, books and other items purchased on research contract funds normally rests with the Institute or others, if stipulated in the contract, and not with individual faculty or research staff members.
8.
Revenues from projects come under three categories (as in the Form B): a.
b. c.
F.
Actual Overhead: Administrative costs; space; electricity; etc as is acceptable to specific funding agencies School-paid Faculty/Staff time Indirect Incentives (professional development fund) to PIs
9.
Currency fluctuations. It is recommended that an amount approximately 10% of the Operating Budget shall be allocated for currency fluctuations and shall be included in the external and internal budgets.
10.
Any surplus incurred due to currency fluctuations shall be transferred to the Institute’s designated account.
11.
Any project planning to use the services of any laboratory must pay for the charge of the services at rates approved by the Dean.
Payment of Incentives Provided that the project will have a positive fund balance at the end of every instalment period, the Finance Office shall be authorized to automatically credit 50% of PIs’ honorarium and PDF, prorated to the installment amount received, to their respective individual and PDF accounts at the end of every instalment. The remaining 50% will be credited to their respective individual and PDF accounts at the closure of the project, provided that the project will have a positive fund balance.
G.
Project Extension / Completion and Account Closure The project account is maintained and opened for the whole duration of the effective project duration (as determined by the contract / agreement). The project accounts are deactivated three months after the approved project period unless prior approval for extension has been sought. Accounts which remain inactive after six months of project due date will automatically be closed by Finance Office.
Page 7/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
H.
I.
Reporting to Sponsors / Clients 1.
The PI is responsible for the technical and financial content as well as the timely submission of reports to the sponsors / clients.
2.
Submission of reports to the sponsor/client should have been made only after quality review has been done by the principal investigator(s) and the Dean.
3.
If necessary, Finance Office assists in the financial review of the report to be submitted.
Coordination between SCPU and Finance Office To ensure harmonious implementation of processes and procedures between SCPU and Finance Office, open channels of communication and coordination will be maintained between the two units.
IV.
PROCEDURES A.
Project Formulation / Proposal Preparation Any faculty member or staff who initiates discussions with a prospective sponsor to undertake a project should complete Project Form A. This is submitted through the Dean (for consultation) together with the technical and financial proposal for review and endorsement. The Form A along with the proposal and Budgets (both external and internal) are to be submitted to the Office of Vice President- Academic Affairs (for advisory support), specifically to confirm their adequacy, and that the rules and regulations of the Institute are followed. PI (Form A) → School Dean/Director → SCPU/VP AA→ President’s Office → PI (for consultation) (for advisory support) (for signature, if reqd)
B.
Signing of Project Agreement / Contract 1.
Prior to signing by the President or his/her authorized representative or designated signatory, the project contract, MOUs and sub-contract agreements should be reviewed by the Sponsored and Contracted Projects Unit (SCPU) / Institute’s Legal Adviser. A written memorandum with a short background of the project shall be submitted to the President through the School Dean, SCPU and Vice PresidentAcademic Affairs in this regard.
2.
All Thai contracts and documents (e.g. Power of Attorney) should be translated in English and be reviewed by SCPU.
Page 8/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
3.
Upon submission of the contracts / MOUs for President’s signature, budget estimates (in accordance with Institute’s policies) should be attached for President’s perusal.
4.
Upon submission of the sub-contract agreement / consultancy contracts for President’s signature, justification for hiring external consultants / joint venture should be clearly stated. The School Dean / President have the right not to approve the request if the reasons are not valid. PI → School Dean/Director → SCPU/VPAA→ President’s Office → PI
C.
Project Implementation a)
Opening an AIT Project Account and Internal Budget 1.
PI / project staff submits project forms A-D to prepare an internal budget based on the amount stipulated in the contract, including direct costs, overhead to the Institute, faculty/staff payroll recovery and indirect incentives (professional development fund) and submits it to the School Dean for approval (a copy is sent to the Academic Program Chair).
2.
An original signed contract or agreement and a copy of the project document, should be attached and submitted to SCPU to serve as reference for opening a project account with AIT.
3.
Please refer to the Annexes for the general guidelines for preparing an internal budget (Reference: Project Forms A and B) for each project category.
4.
If VAT is applicable on the project, top-up 7% on the total budget. (Note: Additional guidelines are found in the Institute P&P on “Guidelines on Value Added Tax Implementation”.)
5.
The School Dean/Director approves the internal budget and assigns a School/Unit serial number to the project application. Upon the School Dean/Director’s approval, the request will be processed further by Finance Office.
6.
If the internal budget does not confirm to the Institute policies on overhead and faculty/staff payroll recovery, a special approval shall be sought from the School Dean/Director and the Vice President-Academic Affairs.
7.
The Finance Office review the request to ensure it satisfies both the sponsor and AIT requirements. An account is then assigned to the project on confirmation by SCPU and the approval of Vice President-Academic Affairs.
Page 9/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
8.
Finance Office sends out an advice to the requesting unit on the project account opened. A copy is also sent to SCPU for information.
PI (Forms AB) → School Dean/Director → SCPU/VPAA→ Finance → PI
(a copy is sent to Academic Program Chair / SCPU / VP-Academic Affairs)
b)
Internal Budget Revisions 1.
An Internal Budget Revision Form is completed and follows the same approval procedure for Opening an AIT Project Account and Internal Budget as outlined in C.a.) above.
2.
At times, Finance Office will require that projects provide supporting documents in order for the budget revision to be made. These documents may be submitted to the Finance Office in hardcopy or electronic format, and may include reasons for revision, bank advice for additional revenue to the project, contract amendments, sponsor’s agreement for budget reallocation, etc.
3.
For projects, a budget Form B and Internal Budget Revision Form will be filled after each instalment is received incorporating current policies.
PI → School Dean/Director → SCPU/VPAA→ Finance → PI (a copy is sent to Academic Program Chair / SCPU / VP-Academic Affairs)
D.
Project Extension / Completion and Account Closure 1.
All projects should normally be completed within the prescribed time and approved budget.
2.
In cases wherein projects have to be extended beyond its effective due dates, permission from the donor agency and School Dean should be sought, and the approval is submitted to Vice President-Academic Affairs through SCPU for consideration.
3.
Each project shall be internally audited prior to closure of its account. PIs/project staffs are expected to provide the audit team with documents and other information being requested from them.
4.
PIs have to complete Form E within three (3) months of deactivation to close the project account. The final report, if any; latest financial report; project contract; and Forms A and B shall be attached with the Form C.
5.
Accounts which remain inactive after six months of project due date will automatically be closed by Finance Office.
PI → School Dean/Director → SCPU / VPAA → Finance → PI
Page 10/11
AA-5-2-1: EXTERNALLY SPONSORED AND CONTRACTED PROJECTS
Modification History:
Related Policies
1st Revision 24 September 2015 Reviewed By: AIT Management Team, AIT Governing Team, VPAA, SCPU 2nd Revision 16 December 2020 • P&P on Direct and Indirect Incentives (FB-4-2-1) • Guidelines on Value Added Tax Implementation • Employment of Faculty / Staff: General Work Regulations (PA-1-1-1 and PA-1-3-3) • AIT Extension Policies and Procedures
Keywords
Rationale for Revisions:
Nov/Dec 2020 • Included reference to direct incentives (honorarium), which are now allowed under the new schemes approved since December 2019, in addition to indirect incentives (professional development fund) • Excluded references to academic programs as there are separate P&Ps for these: • Administrative restructuring 24 September 2015 Mainly reformatting
Page 11/11