Article

Budget monitoring for research institution compliance and fiscal health

Nov. 6, 2023 · Authored by Alyssa Sciorillo

An essential part of a research institution’s grant award application process includes creating a budget. The budget serves as a detailed financial plan that provides the sponsor with a clear understanding of how the funds, if awarded, will be utilized.

Monitoring actual expenditures against the budgeted funds is a crucial element of the grant as it helps ensure that the project stays financially sound and aligned with the objectives set by the sponsors. Monitoring expenditures not only allows an institution to stay in compliance with the requirements outlined in Uniform Guidance 2 CFR 200.329 but also with any additional requirements established by the sponsor. Regular monitoring of funds also allows the institution to identify any deviations from the approved budget, adjust accordingly and obtain sponsor approval, if required.

Sponsors generally have specific guidelines and requirements regarding reporting the use of funds. This allows for accurate and timely financial reporting; fulfilling contractual obligations and maintaining a positive relationship with sponsors.

Key risks associated without budget monitoring

Overspending: if funds are improperly managed, there’s a risk of exceeding the awarded budget, leading to potential financial strain on the recipient organization (as it may have to cover overspent costs from institutional resources) and potential difficulties in completing the project
Financial mismanagement: lack of oversight may result in inefficient use of funds (i.e., poor project burn rate), misallocation or unauthorized expenses, compromising financial stewardship
Non-compliance: failure to monitor the budget can lead to unintentional non-compliance with sponsor guidelines, contractual agreements and regulatory requirements
Unforeseen expenses: without tracking, unexpected expenses may go unnoticed, impacting the project’s financial health as well as overlooking any prior approval that may be required from the sponsor
Inaccurate reporting: inability to monitor may lead to inaccurate financial reporting, damaging the institution’s reputation and credibility with sponsors

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research institution higher education

What we do	What you get
Assess the institution’s policies, resources and tools related to budgeting and monitoring of research funding and determine if they are efficiently supporting responsible management and stewardship of funds.	A facilitated discussion with key process owners across the institution to gain insight into existing practices related to budget creation and the monitoring of funds.
Identify the roles and responsibilities between departments that are involved in the budgeting and monitoring processes.	A clear understanding and layout of any controls or collaboration efforts in place to facilitate effective controls for spending sponsored funds.
Evaluate current procedures to assess compliance with Uniform Guidance and sponsor requirements.	Actionable recommendations to address identified gaps, challenges and risks, based on institutional policies, federal requirements and industry best practices.

Budget monitoring for research institution compliance and fiscal health

Key risks associated without budget monitoring

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