Financial Reports for MRFF

Financial reports

Financial reporting requirements for MRFF grants administered by NHMRC have changed effective 1 July 2023 to better align with the progress reporting requirements specified by the Department of Health and Aged Care.

MRFF Eligible Organisations (MRFF EOs) are required to report on the receipt and expenditure of MRFF funding paid by NHMRC by financial year, rather than calendar year, in all MRFF financial reports to be submitted after the Sapphire financial reporting update.

To ensure continuous financial reporting history, an interim six-month financial report covering the transition period of 1 January 2023 to 30 June 2023 is also required.

A Financial Report Summary dashboard is available in Sapphire showing the status of:

• annual financial statements (now called Regular reports)
• final acquittals (now called Final reports)
• Transfer Acquittals (now called Transfer reports).

Details of financial reports yet to be submitted (due or overdue) will be available to download from Sapphire. If there are multiple reports due for a grant across multiple years, only the earliest year due will be included in the template download and count.

MRFF EOs are advised to prioritise overdue reports for submission as Sapphire will only accept reports in sequence.

Financial reporting process

1. All financial expenditure data reported to NHMRC was mapped to the expenditure categories aligned with the Sapphire financial reporting templates. This is consistent with the relevant grant guidelines and the Direct Research Cost Guidelines. Previous financial report information has been retained on file for record keeping.
2. Financial reports are managed in Sapphire through a separate Financial reports tab and no longer show as ‘milestones’ on the Grant Milestones tab.
   • Details of previous grant financial reporting is available via the Grants - Financial Acquittals dashboard.
3. Financial reporting templates are available to download from Sapphire for Regular, Final and Transfer financial reports. The template allows bulk upload.
   • Details on error handling is included in the Grant Management SOP – 2.4.1 Submit Statements on Sapphire help. All errors identified and preventing an upload must be addressed before the upload is successful.
4. The template is in .xlxs format and will download data for all financial reports due and available to submit at the time of the template download. All previous financial reports are to be submitted prior to the Final financial report for the grant.
   • Note sequential period reporting explained at point 8.
5. The template can be downloaded by financial report type: Regular (previously referred to as Annual Financial Statement), Transfer and Final - or as a single, consolidated download covering all report types where a financial report is pending submission or overdue.
6. The template download will include a combination of pre-populated fields and fields for AIs and MRFF EOs to enter their expenditure data.
   • Pre-populated fields should not be deleted or overwritten as this will create an error.
   • Sapphire will calculate fields that are based on information in system (Grant identifier; income = grant funds paid; balance brought forward = previous report final result).
7. If you do not intend to submit all due reports at the same time, as the template download includes all grant financial reports due, you will need to remove rows for grants that will not be uploaded in the submission.
   • If an expenditure category applies to a grant scheme, the field cannot be left blank.
   • Zero expenditure in a reporting period will not create an error as there may be instances where this is a valid entry.
8. All financial reports will only be able to be uploaded in sequential order. That is, financial reports for all previous report periods must be submitted before the report for the following period becomes available as:
   • Information will only download into the template for grants that have had all financial reports submitted.
   • If there are outstanding Regular reports, these are to be successfully submitted before a Final or Transfer report is submitted.

Financial reporting requirements

• To align future reports to a full financial year, an interim six-month financial report is required to be submitted through Sapphire by 30 September 2023, reporting on the period of January to June 2023.
• Regular (Financial) reports reporting on activities from 1 July 2023 to 30 June 2024 and each financial year thereafter will be due 30 September.
• Final and Transfer (of Eligible Organisation) reports will report on activities from 1 July to either the end date of the grant or the date of transfer approved by NHMRC (as applicable). The due dates for these reports will be specified in Sapphire.

Overdue financial reports

All overdue financial reports not submitted prior to the conversion to financial year reporting will require recalculation of expenditure to align with the financial year reporting period being reported on.

Unsubmitted/Rejected reports

Overdue reports or reports that were submitted but not accepted by the Commonwealth and subsequently rejected after 24 June 2023 will be converted to a financial year schedule, with the interim Regular report including income and expenditure in the first six months of the earliest unsubmitted Regular report. The subsequent Regular reports for each financial year will be due the 30 September following the financial year being reported on.

For example, income and expenditure that should have been reported in a 2022 Annual Financial Statement covering the period of 1 January 2022 to 31 December 2022 but was not submitted before the June 2023 system update or was rejected afterwards, will need to be recalculated and submitted as follows:

• The period of 1 January 2022 to 30 June 2022 to be reported to NHMRC as the interim financial report due through Sapphire by 30 September 2022.
• The income and expenditure for the remaining period of 1 July 2022 to 31 December 2022 to be combined with 1 January 2023 to 30 June 2023 detail and reported in the Regular Report for the 2022-23 financial year due through Sapphire by 30 September 2023.

Reporting Interest for MRFF grants

The interest accrued on a grant forms part of the Grant. MRFF grantees (except MRFF fellowships) are required to report on interest that the Eligible Organisation (or a Participating Institution) earns on the funding in their financial reports. There is no requirement for this funding to be held in an interest-bearing account.

Categories for financial reporting

Reporting in Sapphire is to follow the template categories as follows and guidance to assist finance officers on how to upload financial statements through Sapphire is available on Sapphire Help. 

The field Funds previously returned to NHMRC should be rarely used and is for use in instances where funds have been invoiced for recovery due to overpayment or error. For example, where in early 2022 double indexation on payments in January and February could not be offset against future payments, invoices were raised and sent to EOs. 

Salary expenditure is reported based on the grant guidelines under which the grant was funded. 

• Salary is used for salary payments to investigators and researchers supported by the grant funding. Where guidelines specify a limit on salary payments to a Chief Investigator, it is expected that as per the Funding Agreement the detailed expenditure is available to provide to NHMRC on request. We may ask for this information as part of evaluations or compliance activities. 
• Travel & Allowances is for reporting of travel and travel related expenditure for MRFF Fellowships. All other schemes should include this expenditure into ‘Other Research Costs’. 
• Other Research Costs is for expenditure that is not salary or equipment for Research Support grants and Investigator Grants. This field is not for use for MRFF Fellowships.  
• Participating Institution Expenditure is for entry of the total expenditure reported by all participating institutions to the relevant grant for the reporting period. It is expected that participating institutions are reporting an expenditure breakdown to the MRFF EO that will be available for review if a grant is audited or additional reporting is requested, such as for evaluation purposes. 
• Funds Transferred to New Admin Institution is to record the amount included in the transfer acquittal that has been, or will be, paid to the receiving MRFF EO. It is expected that funds are transferred between institutions as soon as practicable once the transfer is approved by NHMRC to minimise the disruption to the grant. The transfer acquittal does not need to be approved by NHMRC prior to the transfer of funds as we expect the amount to have been agreed between the releasing and receiving institutions/organisations. 

Final Reports (Acquittal)

Acquittal refers to the process of assessing and reconciling the Final financial report at the conclusion of the funding or after the transfer of a grant to another MRFF EO. This process enables NHMRC to ascertain whether the MRFF EO has satisfied their obligations to manage the funds as required by the Funding Agreement. The total funding received for the duration of a grant must be reported on a year-by-year basis.

Sapphire facilitates this reporting by building the financial reporting history of a grant as each year's financial information is submitted in system as Regular reports, culminating in a Final Report. The Department of Health will raise an invoice to recover any unspent MRFF funds at the end of the funding period. MRFF EOs are to return unspent funds on receipt of the invoice.

Final financial reports will not be accepted with a negative balance.

Certification

The Chief Financial Officer (CFO) (or delegate) of MRFF EO must certify off system that the accounts and records underlying Regular, Final and Transfer reports have been maintained in accordance with Australian Accounting Standards and the responsible officer (or delegate) must certify that all funds provided for that research activity have been used for that research activity in accordance with the terms of the Funding Agreement. The CFO and responsible officer who have certified will need to be listed as part of the upload process and are to be approved nominated position holders in Sapphire.

Unspent funds and extensions to the funding period

If it is anticipated that the research activity will not be completed in the approved funding period, a variation to extend the grant must be submitted to NHMRC, before the end date of the grant. Late extension requests submitted after the existing end date of the grant are unlikely to be approved other than in exceptional circumstances where a grantee variation request was unable to be submitted for consideration within the funding period.