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NIHR Global Health Research - Financial Management Guidance for Awards funded through Official Development Assistance (ODA)

Contents

Published: 29 November 2021

Version: 1.0 - October 2021

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Purpose of this Guidance

The purpose of this document is to outline minimum NIHR and Official Development Assistance (ODA) requirements for organisations that are in receipt of NIHR Global Health Research (GHR) funding from the UK Department of Health and Social Care (DHSC) in relation to good financial practice. This guidance complements the NIHR’s Host Organisation Finance Expectation Guidance issued to Contracted Organisations funded through non-ODA NIHR funding.

It should be read in conjunction with the relevant published funding call finance guidance from which a research award was funded.

Scope

This policy covers various aspects of good financial practice of all NIHR GHR projects, programmes and awards managed through the NIHR Coordinating Centres. These include activities including but not limited to:

  • NIHR Global Health Research Units and Groups (NETSCC), including Financial Assurance Fund (FAF)
  • NIHR Global Health Policy and Systems Research programme (Global HPSR) (NETSCC)
  • NIHR Research for Innovation and Global Health Transformation (RIGHT) (CCF), including Proposal and Partnership Development Awards (PPDA)
  • NIHR Global Research Professorships (NIHR Academy)
  • NIHR Global Health Research Centres

It does not apply to NIHR managed UK Vaccine Network projects.

Terminology

ADP – Asset Disposal Plan

CCF – Central Commissioning Facility

Contracted Organisation - the organisation holding the NIHR contract with DHSC

CtP – Change to Programme

DHSC – Department of Health and Social Care

FAF – Financial Assurance Fund

FEC – Full Economic Costing

FSTOX – Final Statement of Expenditure

HIC - High Income Country

HMRC - Her Majesty Revenue and Customs

HEI – Higher Education Institution

LMIC – Low- and Middle-Income Countries

NETSCC – NIHR Evaluation, Trials and Studies Coordinating Centre

NIHR Coordinating Centres – the agents managing the Global Health Research funding competitions and the research contracts subsequently awarded: CCF, NETSCC and NIHR Academy

ODA – Official Development Assistance

PPDA – Proposal and Partnership Development Award

QSTOX – Quarterly Statement of Expenditure

SPOC – Specific Point of Contact

Responsibilities of Contracted Organisations

Contracted Organisations are accountable for the effective and appropriate use of all NIHR ODA funds and should be familiar with the relevant clauses relating to financial management in the NIHR Global Health Research contract (in particular sections 2 and 4).

It is the responsibility of the Contracted Organisations to ensure they undertake proportionate financial controls and assess the needs for institutional audits to provide assurance over the funds being transferred to collaborating organisations or subcontractors.

Due diligence checks for all collaborators/subcontractors must be undertaken prior to signing collaboration agreements/subcontracts. It is essential that all Contracted Organisations assess the legal and financial set-up, governance, management, internal processes, systems and procedures of all their collaborators/subcontractors to ensure they are suitable for a contractual relationship.

Contracted Organisations should have in place controls relating to the flow of funds which are proportionate to the risks and amounts of money involved and take due regard to value for money and propriety of expenditure.

Details of all controls, due diligence checks and accounting records in relation to the transfer and appropriate use of funds by all collaborators and subcontractors must be available on request by the NIHR.

Contracted Organisations must be prepared to:

  • provide reasonable assistance to NIHR in relation to the audit and examination of all financial records relating to the NIHR award
  • compile regular financial reports on behalf of all collaborators/subcontractors involved in the NIHR award

Contracted Organisations are required to ensure they have adequate measures in place to prevent fraud, bribery and corruption, and that they adhere to their safeguarding responsibilities. If a Contracted Organisation becomes aware of any possible fraudulent activity, financial irregularity or has a safeguarding or security concern they must immediately notify the NIHR by completing the NIHR incident reporting form.

For fraud concerns or incidents, please send the completed form to your NIHR Programme or Research Manager or specific point of contact. 

For safeguarding and security concerns or incidents, please send the completed form to safeguardingconcerns@nihr.ac.uk.

ODA eligibility

NIHR GHR awards are funded via the UK Government’s commitment to Official Development Assistance (ODA). They support high-quality applied health research for the direct and primary benefit of people in low and middle-income countries (LMICs), as defined by the Organisation for Economic Cooperation and Development’s (OECD) and listed on the Development Assistance Committee (DAC) list.

In order to be eligible to receive NIHR Global Health Research funding, all research activity expenditure must meet ODA compliance criteria throughout the life of the contract period.

Please refer to specific ODA guidance:

Communication

The lead applicant should be the main point of contact at the Contracted Organisation, and their designated NIHR Research/Programme Manager should be the specific point of contact (SPOC) within the NIHR.

Contracted Organisations need to be proactive in updating NIHR Coordinating Centres on award activity and expenditure. As soon as it becomes apparent that scheduled payments no longer match the profiled level of forecast expenditure on the award (whether this is through underspends or overspends), the NIHR SPOC should be contacted.

Contracted Organisations must be proactive in communicating with collaborators and subcontractors throughout the life of the award, to ensure they are fully aware of the level of activities and expenditure.

Financial Reporting

Quarterly statement of expenditure (QSTOX)

NIHR will require Contracted Organisations to provide quarterly financial statements of expenditure (QSTOX) detailing the actual use of funds and forecasted future expenditure.

The submission quarters are:

  • 1st Apr - 30th June
  • 1st Jul – 30th Sep
  • 1st Oct – 31st Dec
  • 1st Jan – 31st Mar

QSTOX are due 1 month after the quarter end.

All financial returns submitted to NIHR must be completed in conjunction with and agreed by appropriate finance colleagues of Contracted Organisations.

Expenditure reported should equal the cost Contracted Organisations have recognised in their income and expenditure account, statement of comprehensive income (SOCI) or other relevant performance statements that are prepared on an accruals (resource) basis.

As per Section 4 of the research contract financial returns may be audited or subject to spot checks. NIHR will request a financial ledger report from the Contracted Organisation’s accounting system(s) with QSTOX, which must reconcile with the figures submitted. NIHR may select a sample of transactions for further examination and request contractors to provide the supporting documentation where required. Transactional reports may also be requested as and when required by NIHR.

Contracted Organisations need to comply with reporting deadlines set by the NIHR Coordinating Centre. Late submissions may result in NIHR Coordinating Centres forecasting inaccurate figures to DHSC and to HM Treasury. Please note, NIHR reserves the right to suspend all payments to awards until financial returns are submitted.  

As the funding for NIHR GHR awards comes from the UK Government, payments must adhere to HM Treasury rules for managing public funds (Managing Public Money).

Final financial statement of expenditure (FSTOX)

A final financial statement of expenditure (FSTOX) is required to enable NIHR to meet its responsibilities in accounting for the use of public funds. FSTOX must be completed and returned within the following timescales:         

Total award amount

Deadline for submission of FSTOX

Less than £1m

within 1 month after the end date

Between £1m and £3m

within 2 months after the end date

More than £3m

within 3 months after the end date

 The statement must detail the expenditure incurred during the lifetime of the project against the approved budget.  Any significant movements of funds (the lower of £5000 or 10%) between expenditure headings and institutions must be fully justified. NIHR reserves the right to reject any unauthorised virements.

NIHR will ask for a full transactional breakdown at the time the FSTOX is submitted. NIHR will ask for documentary evidence and justification for a selected sample of transactions. Any ineligible expenditure will be recovered.

Dissemination expenditure

Costs associated with publication and/or presentation of findings can be claimed as part of the dissemination costs. These may include open access payments (in line with the NIHR Open Access Policy), meetings to share best practice, training events and events to disseminate research findings. All events must be run at the lowest possible cost with minimal catering. ‘Conferences’, which are described as such, are not eligible for funding.

Salaries incurred after the end date of the award will not be funded.

Estimated costs for dissemination activities can be included in the final statement of expenditure (FSTOX). A full breakdown of these costs must be provided. All dissemination activities must be finished within 24 months after the end date of the award. NIHR reserves the right to request evidence of such expenditure.

Virements and changes to Programmes of work

Contracted Organisations and their collaborators/subcontractors are free to manage their budgets as detailed in the funded application form, which is included within Section 4 of the contract. Prior NIHR approval must be sought in instances where changes to the research plan or virement of funds across expenditure headings/categories are required.

Virement is the authority to move part of one expenditure heading to supplement another expenditure heading. For the purposes of this guidance NIHR considers virements to be in the following situations:

  • movements of funds between expenditure categories
  • movements of funds between institutions, and or
  • movements of funds to undertake activities not outlined in the original research plan

Note:

  • UK HEIs are not permitted to increase their indirect costs allocation.
  • Different schemes may have different rules with regards to virements – you may wish to check with the SPOC if there are any specific rules that apply to your project ahead of making a request.

Virements of under £20,000 in a rolling 12-month period are allowed without approval of NIHR. NIHR should be notified of these virements through the quarterly financial reporting process.

Large virements or any new virement once the £20,000 limit has been reached require prior approval of NIHR.

Virements to undertake activities that did not form part of the original research plan require NIHR approval regardless of value.

NIHR approval for virements is sought through the Change to Programme (CtP) process. Some examples of changes that would require a CtP include, but not limited to:

Financial changes:

  • virement of funds > £20k
  • multiple virements >£20k which exceed £100k in a rolling 12mth period
  • requests to buy equipment, vehicles, consumables, or install infrastructure not listed in the approved for funding research proposal

Additionally Change to Programme requests must be submitted for:

  • changes to work packages or deliverables described in the application*
  • adding a new collaborator/subcontractor
  • substantive changes to key project staff (due to staff leaving, retiring, illness, etc.)

The above requests do not require Variations to Contract but will follow an internal approvals system.

Examples of requests that require Variations to Contract include:  

  • significant changes to contracted programmes of work i.e. major areas will now not be delivered or a significant new area has been identified*
  • any change to contract length
  • any reduction in project budget
  • change of Lead Investigator
  • change of Contracted Organisation
  • changes to Intellectual Property arrangements

*Please contact your SPOC to agree if a Change to Programme or Variation to Contract is required for proposed changes to work programmes which will be dependent on the scale of the changes.

Contracted Organisations will be required to submit CtP and VtC requests through their SPOC. When a change is requested the research team will be asked to complete a template and provide:

  • The rationale for the change
  • A summary of the change being requested and contracting implications
  • An analysis of the following:
  • Impact of the change on delivery of the originally approved programme
  • Risks introduced and their mitigation
  • Impact on costs
  • Impact on ODA compliance including capacity building
  • Value for money of any impacted changes
  • A revised budget

Accrual management

NIHR requires Contracted Organisations to account for financial expenditure on an accrual (resource) basis rather than a cash basis.

Therefore, the cost of activities of the Contracted Organisation and their collaborators/subcontractors should be accounted for in the period the activities took place rather than when cash payments are incurred.

This will require the Contracted Organisation to be proactive when monitoring collaborator/subcontractor activities so that appropriate accrual entries can be made.

Accrual entries should be made on a monthly basis to ensure in-year expenditure updates reflect appropriate levels of activities.

NIHR does not expect underspends to be reported due to late invoicing by collaborators/subcontractors.  

Forecasting

Forecasting needs to be realistic as this will inform future payment schedules. From a finance management perspective, it is better for under/overspends to be reported as early in the financial year as possible to enable NIHR to redistribute funds to other areas.

The NIHR Global Health Research portfolio forms part of the wider DHSC ODA budget. Accurate forecasting of ODA expenditure is also essential on a calendar year basis as DHSC contributes to meeting the government’s legal requirement towards percentage spend of Gross National Income (GNI) on ODA each calendar year. HM Treasury closely monitors DHSC ODA calendar year forecasts against target spend and future DHSC funding may be at risk if DHSC forecasts are not delivered.

Please note, Contracted Organisations may be audited if forecast performance is deemed inaccurate.

Cost centre allocation

For audit and reporting purposes, Contracted Organisations and collaborators/subcontractors are expected to allocate award funds to a unique cost centre that is used solely for an NIHR award. Virement between award cost centres should not be permitted, i.e. no cross funding virements.

Having dedicated costs centres should reduce the time required to produce financial reports.

DHSC payment policy

By default, DHSC will make payments quarterly in arrears (monthly payments may be made if specifically requested and justified by the Contracted Organisation).

DHSC does not intentionally make payments in advance of need nor does it permit Contracted Organisations to have deferred income balances on its contracts. Thus, payment schedules will be regularly adjusted on the basis of information provided in quarterly finance reports (QSTOX).

Any payments released by the Contracted Organisation to any collaborator/subcontractor in advance of need are made at their own risk.

NIHR Coordinating Centres will only agree reprofiles that are based on robust and achievable spending plans provided by the Contracted Organisation. NIHR may reprofile underspends incurred to the last year of the contract for awards that repeatedly report underspends or may reduce the overall value of the contract to prevent further risk.  All revised and proposed payment schedules, that overwrite original and prior schedules, will need to be agreed by the NIHR SPOC.

NIHR will retain the greater of £100,000 or 5% of the total award value until the final report is received/validated and the Final Statement of Expenditure (FSTOX) had been checked and authorised by NIHR finance colleagues.

Equipment

Any equipment funded by a NIHR Global Health Research award must be purchased in accordance with procurement procedures of the acquiring organisation in a manner that delivers value for money and is consistent with ODA eligibility rules. Furthermore, when purchasing equipment, Contracted Organisations and their collaborators/subcontractors must also ensure that it can be adequately maintained and insured for all appropriate risks during the lifetime of the project, and there is an agreed handover of responsibility for the item at the end of the project.

NIHR reserves the right to inspect the original quotations and invoices and may recover any funds provided for the purchase if the documentary evidence is not provided.

UK Higher Education Institutions (HEIs) who claim Full Economic Costing (FEC) cannot request equipment items that are included within the estates element of FEC. Equipment purchased and owned by the NHS is not eligible for NIHR Global Health Research funding.

Equipment purchased for use in the UK contracted/collaborating organisations would not normally be supported. If equipment is required for the use in the UK, a clear justification must be provided, including how the purchase will be of the direct and primary benefit to people living in DAC-list countries.

Costs of computers and laptops are normally restricted to a maximum of £1000 per item including associated software and VAT, and prior approval must be sought for any purchases above this limit.

Items of equipment valued at £250 or more (or equivalent in local currency) must be itemised separately when FSTOX is submitted. However, grouping of the same type of equipment is permitted.

NIHR considers any equipment and/or supplies purchased in part or fully from ODA funds as programme assets if they have a useful life of more than one year; and either

  1. the purchase price or development cost of the asset is in excess of £500 or equivalent in local currency; or
  2. is a group of lower value items (e.g. pharmaceutical products, food, relief packs, etc.) where the combined value is in excess of £500 or equivalent in local currency; or
  3. can be considered an attractive item regardless of cost (e.g. mobile phones, cameras, laptops, tablets, satellite phones, vehicles, etc.).

Contracted Organisations are expected to keep an up-to-date asset register, and report this to the NIHR on an annual basis using the proforma template.

At the end of the award, the equipment will remain the property of the relevant Collaborator or the Contractor and must continue to be used for ODA-eligible activities. As part of the project closure documentation, Contracted Organisations will be requested to submit an Asset Disposal Plan (ADP) clearly outlining the final intention for assets.

Travel and Subsistence

Travel and subsistence costs of collaborative working visits and engagement with stakeholders can be claimed as part of NIHR Global Health Research award. Organisations involved in the project may also claim travel and subsistence costs for their programme advisory groups, steering committees, data monitoring and ethics committees. Travel and subsistence in relation to programme meetings, training and dissemination activities can also be claimed.

Contracted Organisations, collaborators and subcontractors are required to consider value for money and environmental impact and consider whether a trip is necessary and whether alternative cheaper options (e.g. tele-conferencing or video conferencing) offer a viable alternative.

All claims for expenditure must be accompanied by a proof of actual expenditure incurred in a way of receipts or invoices.

Per diem payments are not supported by NIHR; neither the contractor nor collaborator / subcontractor are permitted to charge per diem.

Individuals may choose their own form of transport subject to the overriding consideration of value for money. The forms of transport claimants may use in order of NIHR preference:

  • Public transport – rail, underground, coach, bus, aircraft, ferry
  • Privately owned vehicles
  • Taxis

Public Transport

All journeys by rail or air should be made by a class of travel that is no higher than standard economy unless higher-class travel is required to comply with specific legislation. NIHR approval is required prior to making bookings for premium or business class travel. NIHR funding schemes do not fund first class travel.

The broad principle for travel booking is that all travel tickets are pre-booked in advance as this will usually reduce costs. For example, in the UK, pre-booking a train journey is usually cheaper than open ‘anytime’ tickets. Open ‘anytime’ tickets should only be booked by exception where there is no certainty over the timing.

Individuals may upgrade to a higher class of travel at their own or employing institution’s expense, but NIHR will only reimburse the eligible travel costs in accordance with this policy. Quotes for standard/economy class for the same dates of travel must be submitted as part of the claim.

Sufficient documentary evidence (e.g. receipts, tickets, invoices and boarding passes) for all journeys must be kept and provided for inspection to NIHR when requested.

Loyalty programmes

Air miles or other points accrued to an individual as a result of travel as part of NIHR project activities must be used to offset future NIHR related journey. A particular airline, hotel scheme etc. should not be chosen solely to collect points.

NIHR will not reimburse travel where personal loyalty points were used to book travel or accommodation and the cash equivalent is charged to a project funded by NIHR.

Mileage in privately owned vehicles

The driver is responsible for ensuring the vehicle is in roadworthy condition, licensed, appropriately insured and has a valid MOT (UK) or equivalent vehicle licensing regulation in LMIC or any other country where the travel takes place.

The mileage rates are based on a single round trip i.e. a trip from home to another location for business and back again. The trip may involve stopping in a number of locations on the way or be over a number of days – this all counts as a single round trip.

For UK travel only: If travel is by car, apply your institution’s mileage rates. However, they should not exceed HMRC approved mileage allowances:

Type of transportation

Rate per mile in the UK

Car/Van

45p for the first 10,000 business miles in tax year

Car/Van

25p for each business mile over 10,000 in the tax year

Motorcycle allowance

24p

Cycle allowance

20p

Passenger allowance

5p per passenger per business mile

The rates are subject to change by HMRC and any changes will be actioned by NIHR at the time they are made.

For international travel: all journeys must be charged according to the most appropriate (basic or standard) local rate. Documentary evidence of the policy must be supplied if requested by NIHR.

Reasonable expenses incurred on parking, tolls and congestion charges may be claimed for a journey associated with NIHR busine

NIHR will not reimburse any fines or penalties.

Taxis

Individuals may use taxis where no alternative method of transport is available, or where there is an appropriate justification e.g. for personal safety or transport of heavy luggage. Taxis used for social or non-business activities will not be reimbursed by NIHR.

Subsistence

Subsistence covers accommodation and meals associated with travel. All cost must be based on actual receipted expenditure. Alcohol and tobacco are not allowable subsistence items. Per diem payments for subsistence are not permitted.

The standard of accommodation should be modest and align with organisational policy for daily rates as well as employee safety and security. This must not be above 4*or equivalent. Justification for any planned exceptions needs to be provided to NIHR in advance of travel. Contracted Organisations and their Collaborators are reminded to ensure hotel bills are fully itemised to allow scrutiny.

Individuals may claim reasonable costs of meals and refreshments taken in the course of project activities providing that:

  • These are not provided by the event organisers or as part of the accommodation package, and
  • These are supported by valid receipts and invoices.

Individuals must follow their employing organisation’s rules for the maximum meal allowance rates.

Gratuity not exceeding 10% of the total bill (excluding alcoholic beverages) will be reimbursed where such payment is included in the receipt or document.

Items of a personal use such as minibar, newspapers and film rental will not be reimbursed by NIHR. Where these are included in the invoice, the costs must be deducted.

Visa fees

Costs of visas required for travel specifically related to the programme can be claimed as part of NIHR award. If a visa covers travel across multiple projects the cost of the visa should be shared across all projects where possible, but if not, only claimed once.

Eligible expenditure also includes essential costs associated with attendance of appointments at a visa application establishment.   

Training and Development

Global Health Research funding can be used for a range of training and development activities, for example:

  • full, partial formal training posts (including but not limited to BSc, MSc, MPhil, MRes, PhD, Post docs)
  • training in technical research skills and personal development skills
  • other wider institutional capacity strengthening activities such as finance management, research management, data management, legal compliance and assurance training
  • Institutional systems for coaching, mentoring and/or peer-mentorship

Student Fees

NIHR will reimburse full studentship costs of formal academic training courses for students from ODA-eligible countries, who are registered to attend a LMIC or HIC institution.

It is expected that studentships are co-terminus with the award. By exception and with prior approval, NIHR may consider supporting formal training posts where the duration of the post exceeds the length of the main NIHR funding award, provided there is clear evidence that:

  • all efforts have been made to recruit trainees in time for them to complete their programme within the original funding period
  • the work of the student will make a meaningful contribution to the overall programme of research within the timeframe of the award
  • the additional funding required to support the student after the completion of the NIHR award will be secured before a post is advertised

Stipends

NIHR understands that it is common practice to provide stipends to PhD, and Post-Doctoral students, however for NIHR Global Health Research funded awards they also apply to all other academic formal training courses, so long as additional support or salary is not received from another source during the period of the training course

It is expected that stipends are only claimed where students are enrolled in a course of a minimum duration of 12 months, unless there is a clear justification for providing stipend for shorter durations.

Stipends can be claimed by students from ODA-eligible countries, regardless of whether they are registered at a HEI in an ODA-eligible country or HIC.

Students from ODA eligible countries undertaking formal training courses delivered via distance/remote learning registered at a UK or other HIC HEI may have to attend residential training in the HIC as part of their course.  Where this is the case, stipend costs can be claimed only for the time spent in the HIC as part of the course as follows:

  • UK HEIs: pro-rata stipend, calculated as a proportion of the annual UK stipend figure may apply.
  • Other HIC HEIs: the stipend policy of the sponsoring organisation will apply. Pro-rata stipend, calculated as a proportion of the annual stipend figure may apply. NIHR may request a copy of the policy.

Students from ODA eligible countries undertaking courses in ODA eligible country or non-UK HIC HEIs, will be expected to adhere to the stipend policy of the sponsoring organisation, a copy of which may be requested by NIHR.

The proposed NIHR minimum annual stipend figure applicable in the UK is set at £15,609 for 2021/22 and increased each year in line with UK inflation. The indicative rates for future years are:

Financial year

UK stipend rate

2022/23

£15,940

2023/24

£16,278

2024/25

£16,623

2025/26

£16,975

2026/27

£17,335

The rates will be reviewed on an annual basis and this document will be updated accordingly. Organisations paying more than the minimum stipend will be expected to provide justification.

Stipends are expected to cover living costs such as subsistence, routine travel and accommodation. Additional costs such as conference attendance, research expenses and international travel are not covered by the stipend and can be claimed as additional expenditure.

Please note: In Global Health Research programme awards, HIC HEI student fees or associated stipend costs are eligible only for students from ODA eligible countries. Student fees or stipends for students from HICs would not be eligible, regardless of the programme and location of study.

For career development awards such as NIHR Global Research Professorships, applicants should refer to the specific scheme guidance on research training and development.

Effective date

This policy applies with immediate effect.

Other relevant documents

Further information

For further information in relation to this policy, please contact: