Keeping track of lab finances

Recently, I’ve spent a lot of time working through lab finances. I need to make personnel decisions, and what I want to do is:

1. Make sure the amount of money I think I have to spend is the amount I actually have to spend.
2. Encumber the salaries/stipends/tuition of people currently in the lab.
3. Play around with different scenarios (e.g., What if that prospective grad student comes? What if I hire another postdoc?) to see what impacts they have on the budget.

This seems like it should be straightforward. It’s not.

First, to make sure the amount of money I think I have to spend is the amount I actually have to spend: At both Georgia Tech and at Michigan (and I’d guess most other universities), there is an online system for tracking accounts. Here, I log in to something called Wolverine Access, then click on the M-Reports option, and then can see a summary of projects (where “projects” are startup and individual grants, in my case). This system is updated once a month when accounts are reconciled. I can see something labeled “Official Balance as of last month closed” (at the moment: Feb 2015) and the Projected Balance. Those two numbers differ from each other, for reasons that I’m guessing are related in part to salaries of people currently supported on that funding. But those salaries don’t seem to be able to fully account for the differences, so I’m not sure why the projected balance is different. Maybe they’re projecting further than one month? Or maybe they’re assuming we’ll spend a certain percentage of the non-personnel funds each month?

Let’s assume, though, that I can figure out whether I should be looking at the “official balance” or the “projected balance”. Additional questions that then arise are things like 1) Has the most recent installment of the grant hit the account? 2) Has the REU supplement hit the account yet? 3) Did the invoice for that spec get paid yet? There are ways to look at the nitty gritty details of all the transactions associated with my accounts, but it always takes me a long time to find the right spreadsheet and, once it’s opened, it’s somewhat overwhelming. It’s tempting to stick my head in the sand and just totally ignore the details of individual transaction, but I know people who’ve opened those files to find things like that someone else’s grad student was accidentally put on their grant. That’s the sort of thing you want to figure out sooner rather than later! I’ve never found anything that major, but I have found discrepancies that needed to be corrected.

Assuming I get all that worked out, the next thing I want to do is to encumber the salaries/stipends/tuition of people currently in the lab (and also any major planned expenses, such as those associated with molecular analyses). My first priority, before taking any new people into the lab, is to make sure I can properly support the people already in my lab. For grad students, this means stipends, benefits, and tuition. For staff (postdocs and technicians), this means salary and fringe benefits. Plus, when charging to grants, there’s also overhead, which gets tacked on. So, if I want to pay someone in mylab $40,000/year, $82,000/year gets charged to my grant. People are expensive.

The way I do this is to take whatever number I came up with above and then go over to excel to play around with numbers (e.g., let me pay my current technician off funds X & Y for the next two years). I pull up the budget template in excel that I get from the grants person prior to working on a budget for a grant proposal. And then I go in and play around with numbers. What I would prefer would be to have a system that integrates with the one above, where I can ask them to project the budget through to the end of the grant, assuming the additional yearly increases from NSF and various encumbered personnel. This should be flexible so that, for example, if it took 6 months longer to hire a postdoc on a grant than was originally planned, the salary encumbrance on the grant gets moved by 6 months. The report I downloaded at Georgia Tech allowed me to play around with numbers like this better than the report I can download here at Michigan does. I’m guessing there’s a way to do this, but I haven’t figured it out yet. I have a meeting set up with the financial folks to get pointers!

Then, once the current people are taken into account, it’s somewhat straightforward to do a similar thing but with scenarios involving new lab personnel (or, for something like startup, new equipment purchases). But these can sometimes be trickier because there isn’t complete information. This is the most notable in terms of prospective grad students. In my department, the expectation is that I will support grad students for two semesters on a grant.* So, if I make offers to two grad students in a given year, between the time when I make those offers and when I hear back from them, I’m not sure if I should budget $0 for them or two years worth of support. That can make a big difference when trying to make other budget decisions.

From discussions with other faculty members, budgets are always a source of stress. We don’t get training in accounting, but we need to handle pretty substantial budgets. And I’m always really nervous that I will make a mistake somewhere along the line. So, after poring over the spreadsheets for a while, I emailed the accounting folks in my department to ask them for a meeting. We’ll meet tomorrow so that I can make sure I am doing things correctly. Then, just to be safe, I’ll email them to make sure the outcome I think we came to is the one they think we came to as well. And then, after all that, I’ll hopefully be able to feel comfortable that the lab finances are in order.

But I continue to feel like there has to be a better way. Is there an approach that I’m missing? How do you track lab finances?

 

*The rest of the time is covered by a mixture of fellowships and TAing. And, yes, I realize we are very lucky to have this much support!