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I am very fortunate to have several sources of research fundings to run my lab. Like many other skills needed for running a lab, I have no background in accounting (?). Different funds come through different systems with different restrictions, and my institute does not provide a unified solution that fits my needs. I asked around, and some of my colleagues tell me that they do back of the envelop calculations and do not keep track of detailed expenditures. This is very stressful for me, and I would like to learn to manage grant monies like a pro.

To clarify, the grants management office does manage federal grants, but I also have other sources that they won't handle.

What are the best practices for managing heterogeneous sources of grant monies? Anybody willing to share their spread sheets and methods? Is there a software suitable for this purpose?

Some identified hurdles: (1) encumbered funds for hiring, (2) indirect cost calculations per category, (3) restricted/unrestricted funds, (4) students/staff partially paid by other sources, (5) general bureaucracy, (6) lack of accounting / human resources knowledge.

STEM field, R1 institute in USA.

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    Doesn't your university have an office to manage grants? I'm surprised if an R1 doesn't. – Buffy Aug 28 at 10:25
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    Your profile says Stony Brook. Go find the "Offices of Grants Management and Sponsored Programs". I'd be surprised if their "assistance" isn't required. Of course, they will take a part of your grant for "overhead". – Buffy Aug 28 at 11:35
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    Then I'd suggest that you convince them to handle all your funding. Otherwise, I'd suggest that you hire (from the grant funds) an accountant and get a lawyer on retainer. Many grants have reporting requirements and there may be legal implications in some cases. Spend your time on research, not this stuff. It is hard enough managing the students and post docs and (perhaps) lab assistants, etc. – Buffy Aug 28 at 12:01
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    The department or college administrative staff might also be able to help with some financial matters. Even if that isn't the case, I'd expect them to know who you should talk to. – Anyon Aug 28 at 12:52
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    I'm very surprised your grants office won't handle everything. The typical case is that the university requires everything to go through them. – Bryan Krause Aug 28 at 14:34
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I find the other answer to be not so useful because it omits many of the practicalities of grants management. The reality, as I'm sure you've already found out, is substantially more complicated:

  • Each grant has money in a variety of accounts (senior personnel salary, fringe, student salary, travel, equipment, etc) that have different rules and between which you can't move money. At the same time, if you have (say) a 3-year grant, it is largely up to you in which year you actually spend the money in a given category (as long as you can credibly explain why you didn't follow the original schedule, and as long as you make progress as promised in the proposal).

  • For some kinds of grants, you can't even move money within one category from one year to another.

  • If you have multiple grants, you have to explicitly say which grant you or a student is paid from for any given month -- your grants don't get pooled into one account.

  • There are restrictions on money: For example, NSF will generally not allow you to pay yourself for more than two months per year from NSF grants (total, over all your NSF grants combined).

So it is complicated. In practice, it is made more complicated because if you have multiple grants, they typically don't run for the same length and the same number of years but one will end before another; in many cases, the budget years for each of these grants will even be different (one from September to August, another from January to December).

As a consequence, I don't actually know anyone who has more than a single, small grant, who would have a reasonable scheme to work the finances out rigorously. Over the past ten years, I've generally had 2-4 grants at any given time and my group has had a budget of $200-400k/year from which to pay myself, students, postdocs, and travel. Although I would like to say that I've figured this out after these years, the reality is that I haven't; yet, my finance people keep telling me that I'm better organized than almost anyone else in the department.

So how do I do it? Every few months, I sit together with my finance people and we talk about what and who needs to be paid, what accounts there are, which of these expire the earliest or have the most restrictions, and then we allocate costs to accounts. If a certain student or piece of equipment could reasonably be paid from different accounts, then I will generally try to allocate that cost to the account that expires first or that has the most restrictions -- because this protects money that I can carry forward the longest for future expenses, or that in some cases can be used more flexibly. Beyond these conversations and keeping a general overview of what moneys you have in my head, I can't say that I really know exactly what I'm doing. The university has a system that allows me to project into the future the current spending rate -- but because costs keep being allocated and re-allocated all the time, or are infrequent costs, I've found that these tools are not overly useful.

I'll end by noting that I've generally found it most difficult if I had only one or two grants at a given time because then you really don't have a lot of flexibility: If you've got a student that needs to be paid, you only have one account where that could come from and that account can't run out before the student is finished, nor should the student finish before the money runs out (because then you have to give money back). In some sense, it therefore becomes easier if you have multiple grants and multiple students. Except, of course, that then you also multiply the level of responsibility you have for others and towards the funding agencies.

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Speaking as research administration staff at another R1 institution, here are a few things to think about.

For Sponsored Projects, Utilize Your Research Office

Many of the commenters noted this and it's great advice. For your external grant funds your institution's sponsored projects office will help you with the accounting. They will know exactly what you can and can't do with your grant funds and may have tools to help you manage them.

Staff Assistance

There are many kinds of funds that a sponsored projects office typically won't deal with. These could include internal funds (like start-up funds or departmental research), gifts, contracts, or other instruments. However, in most institutions I am familiar with your department should have accounting and finance staff who can help you manage those funds. If your department doesn't, ask an investigator who has been around your institution longer for advice. Maybe there is another department or organization who can help.

If there isn't, you should consider hiring someone. Although grant funds may be too restricted for this, your other funds may not be. A small or medium sized lab probably can't afford a full time accountant or grant administrator, but you may be able to buy the time of an existing staff member in another department.

Your research office could probably point you in the right direction, even if they don't provide the service themselves. Other researchers might have already discovered a solution and may tell you what they did.

Some Other Tips

Assuming you don't have help, here are some general tips:

  • Review your expenditures, income, and balances on a regular basis. The grant administrators often do this monthly, but you can get away with less often if your funds aren't too dynamic.
  • Encumbrances are your friend. If you encumber funds, you aren't likely to forget them when projecting future balances.
  • If you have staff, remember to budget for payroll increases (both salary/wage increases as well as increases in benefits and tax liability).

A major part of fund accounting is determining what pool of money can pay for what resource. Think critically about what source of funding for different kinds of purchases.

Lastly, it's great that you are interested in the financial health and stability of your lab. But don't let it consume you. If you regularly review your expenses and fund balances, and keep an eye on where your money goes, you will probably be fine.

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What are the best practices for managing heterogeneous sources of grant monies? Anybody willing to share their spread sheets and methods? Is there a software suitable for this purpose?

Manage your accounts as if they were for a business. Your lab is probably akin to a small business, so a spreadsheet should suffice. How that spreadsheet should be setup depends on your personal needs. (Unlike a business, you needn't comply with accounting regulations, so you can omit anything that isn't useful.) Your first sheet might include the following.

  • Account balance, the amount of cash you have available in some account
  • Grants, a sum of your total grants, possibly computed from another sheet which lists your grants
  • Incoming, a sum of any incomings (e.g., consultancy work), computed from another sheet, possibly organised by grant
  • Outgoings, a sum of any outgoings, computed from another sheet
  • Errors, computed as (grants - account balance) - (incomings - outgoings)

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