Module 5: Financial, Resource and Risk Management

Frequently asked questions

• I have support staff who look after finances for me. Why should I get involved?

As a research leader you have primary responsibility for your research project. If you don’t manage your finances well, it may affect your ability to attract future grants. Also, you may adversely affect the financial position of your university.

It is entirely appropriate that you delegate tasks to your support staff. However, delegation does not mean that you are free of responsibility. You need to oversee budgets and control expenditure for projects under your control.

• Why bother to accurately cost research proposals when grants never match the application amount?

It is important to accurately cost research proposals for a number of reasons. Firstly, even if the grant does not match what you have asked for, your university will need to consider whether to subsidise your project. Underestimating your costs may adversely affect your university's financial position. Furthermore, if research projects are systematically under-costed, for competitive or other reasons, the entire tertiary education system is undermined.

If you accurately cost your project, you are well placed to manage it appropriately, including negotiating with your faculty for additional funds where necessary. A few years ago, the Vice-Chancellors of Australian universities sponsored research into how accurately research projects were costed. They found that science-based projects were under-costed by 25% on average. It is thus more difficult for funding bodies such as the ARC to accurately assess grant proposals.

If you plan your project appropriately (see Module 1: Research Strategy and Planning) there will be less likelihood of insufficient funding for your project through poor estimation of costs.

• Why are there so many central charges, which ultimately mean there is less money for research?

Central charges represent the costs of running the university as a whole. The level of central charges will vary from university to university, but a rough rule of thumb is 30%. These charges cover the cost of IT, legal services, finance, HR, library services, etc. There are ongoing initiatives, such as benchmarking exercises, to ensure that these costs are kept under control.

• When budgeting for salaries, which are my biggest cost item, why should I take into account things like long service leave?

It is important that you account for the full costs associated with salaries. In general, salaries will constitute about 90% of the total costs of your research project.

The full cost of salaries includes the base salary of researchers, assistants, etc., plus salary on-costs. These include allowance for recreation leave loading where applicable, superannuation, allowance for long service leave, workers' compensation, maternity leave, etc. These costs represent the true cost of employing your people.