FINANCIAL POLICY

Creation of Research Accounts

SCIRE may create a research account in conjunction with a specific research project. The research account may only be established after the project has been approved by the R&D Committee of the VA Long Beach HealthCare System. The purpose of the account(s) is to receive funds from sources of support for the project and obligate expenses from such funds in order to accomplish the work of the project.
Research accounts will remain active only so long as the project remains approved and activated by VA Research and Development Service.

Termination of Research Accounts

SCIRE can only close a research account after receiving notification from the VA Research and Development Service that the related project has been finalized. All activity related to that account shall then end and the remaining balance shall be removed from the account after the resolution of all obligations against the account. In no case, may research monies be deposited into educational accounts.

Creation of Education Accounts

SCIRE may create an education account upon request of an investigator. The education account income may be received with the designation of either “unrestricted educational grant” or to fund a specific educational event from sources of support.

Termination of Education Accounts

SCIRE may keep an education account open as long as the investigator is employed by VALBHCS. If the funds have been designated for a specific activity and all obligations have been paid, the investigator may chose to leave any remaining funds in the education account. In no case, may education monies be deposited into research accounts.

Distribution of Remaining Funds from Terminated Accounts

If the Principal Investigator of a project can demonstrate control of remaining funds in an account after its termination, the funds shall be moved into the PI’s General Account. A separate General Account must be established for research or education. Any negative balance remaining in a terminated account shall also be transferred into the PI’s General Account. If the PI cannot demonstrate control of remaining funds, then the Executive Director will instruct the Accounting Department to deposit those funds into the SCIRE Administrative Account. The Board of Directors, or an ad hoc committee, shall resolve any disputes between the PI and the Administration of SCIRE concerning the correct distribution of the funds.

Inactive Accounts

Upon termination of an investigator’s employment with VALBHS, due to death, disability, retirement or transfer, any funds remaining in their individual account will revert to an unrestricted Administration account. For active VA faculty with accounts having a balance under $500, with no activity for 12 months, the accounts will be considered inactive and the funds will revert to the unrestricted Administration account. Notice will be sent to the investigators sixty (60) days prior to fiscal year end to advise them of inactivity and proposed transfer. Upon notification, an appeal may be made to keep the account active if expenses are expected within 90 days.

Transferring Accounts

If a Principal Investigator will be transferring to another facility and continuing research activities, a request may be made to the Board through the Executive Director to transfer any remaining funds to another non-profit corporation that supports medical research affiliated with the PI’s new institution.   These requests are considered at the next regularly scheduled quarterly Board meeting. Accordingly, when a request is made to transfer the funds from one corporation to another, the Board has a fiduciary obligation to consider the interests of the corporation, not just the DVA employee.

Overdrafted Accounts

Any overdrafted account with a balance less than $25 will be assumed by the unrestricted Administration account. For any amount greater than $25, an attempt will be made to collect the overdraft from the investigator responsible for the account. If, after numerous attempts no collection can be made, and the amount is less than $100, the overdraft will be moved to the unrestricted Administration account. For amounts greater than $100, collection efforts through an outside credit collection service will be considered.

The Executive Director may determine that continued employment of support personnel paid from an investigator’s account(s) will result in an overdrafted account(s) that cannot resaonably be expected to be resolved. In this case, the investigator will be notified that an involuntary termination of the employee must be made. Every effort will be made to assist the employee in finding continued employment with another investigator.

Ownership of Funds

All funds accepted for deposit by SCIRE represent corporate income and are not to be used for personal benefit of any investigator. All interest earned remains with the corporation.

Fund Expenditures

Expenditures from any research account must be for research related activities in support of the specific R&D approved program. Funds deposited in Research General Account must be used to support research activities carried out within the VA Long Beach HealthCare System, or at an R&D approved location off-site.

Overhead Rates

All corporate sponsored research contracts administered by SCIRE are assessed at the rate of 25% of the amount received from that contract. The overhead rates negotiated on contracts prior to any rate changes will be honored during the length of the contract. Unless otherwise negotiated, all other SCIRE projects for FY 2015 are assessed Facilities and Administration (F&A) costs at: Government (33.4%), Industry (25%), educational grants (10%), and/or unrestricted gifts over $500 (5%).

Restricted Gifts

Before accepting any restricted donation, the Executive Director must review the conditions the donor wishes to impose on the investigator and/or Corporation for all gifts below $10,000 in terms of how the funds can be used. For restricted donations greater than $10,000 but less than $25,000, the President must review the conditions. Any restricted donations in excess of $25,000 must receive Board approval. These approvals will be granted only when it can be determined that the conditions of the donation can be met, legally, ethically and organizationally. The donor’s letter setting forth the restrictions must also contain a clause authorizing SCIRE to utilize any residual funds as it sees fit in the event the concerned investigator should leave the VA before completing the project or if money remains after the project has been completed.

A letter from the donor must accompany a gift-donation indicating that the check represents a gift to be used by an investigator or a specific service, or SCIRE, in support of one or more various research programs. Further, the letter should indicate that the gift is irrevocable and does not impose contractual requirements on the corporation beyond the reporting of research results. SCIRE will provide acknowledgement of the gift by letter to the donor.

Donations may be made in honor of a deceased patient to be used by a specific investigator or service. A letter from the donor is preferred, but a notation on the check will be accepted. SCIRE will provide an acknowledgement of the gift to the donor and another letter, without specifying the amount of funds received, will be sent to the deceased’s family for each donation received. At the present time, overhead is not charged against these donations, since historically the average amount per check is less than $50.00.

Financial Reports

SCIRE recognizes that Principal Investigators need to be aware of the balances in their account(s). To facilitate this, a financial statement will be prepared bimonthly and mailed to the Principal Investigator. Any discrepancies must be brought to the attention of SCIRE within 30 days of receipt of the current month’s report that reflects the charge. In addition, the Principal Investigator has the right to request a financial statement be prepared at any other time, providing one business day’s notice is given.

Deposits of checks to Principal Investigator’s accounts are acknowledged by an e-mail message to the Principal Investigator with the amount received and the account to which it is deposited listed. In addition, an acknowledgement letter is sent to the issuer of the check.

Inspection of Records

Copies of all contracts and transactions, including justification for expenses, are kept in PI’s files, according to the applicable study or account. The PI has a right to inspect those files at any time.

Information, such as balances or expenses, about a PI’s account(s) will not be given to another PI, VA or SCIRE employee, unless permission has been obtained from the PI about whose accounts information is being requested. Employees who have been granted signature authority for purchases do not automatically have the authority to obtain information about activity or the balance in a PI’s account(s).

SCIRE is required to submit a fiscal report each year to the Secretary of Veterans Affairs. Additionally, in connection to any audit, inquiry, investigation, or review of SCIRE’s activities, SCIRE is obligated to make its records available to the VA Inspector General, the Comptroller General, the IRS, the Secretary of Veterans Affairs and the State of California.

Check Issuance

Checks in payment for invoices, reimbursements, consultant’s fees, etc. are issued twice monthly. All documentation must be received by SCIRE administration by noon on the day prior in order to be included in the scheduled check run. It is the responsibility of the person submitting the request to ensure that all required back-up documentation has been attached to any Check Request Form. Checks are approved and co-signed by the Executive Director and by either the President or another Board member. Prior to release, any one of the check signers have the right to request more documentation of the appropriateness of the expense. The Executive Director has a fiduciary obligation to consider the interests of the corporation’s financial stability when requests for large checks are requested and may delay the issuance of such checks.

Credit Card Expense

In certain cases, it is preferable to use the corporate credit card for invoices, airfare, membership dues, etc. The same documentation is required as for check requests. The Executive Director will review and approve the requests prior to payment by credit card.

Payment for Referral of Subjects

California law states that “No person, firm, partnership, association or corporation, or agent or employee thereof, shall for profit refer or recommend a person to a physician, hospital, health-related facility, or dispensary for any form of medical care or treatment of any ailment or physical condition.” On this basis, cash or cash-equivalent payment to health care providers for referral of subjects or potential subjects is not permitted. Other types of compensation (e.g. books, or other non-cash gifts) must be disclosed to the IRB and potential subjects.

Dissolution of Corporation

The Secretary of Veterans Affairs has authorized the Medical Center Director to order the dissolution of SCIRE if it is determined that SCIRE is no longer serving the interest of the VA. In case of such dissolution, unexpended funds will be transferred to another 501(c)(3) corporation that supports medical research (such as UCI Foundation).

Suspension of Corporation

In case of educational activities, the Acting Chief of Staff Education may impose a temporary suspension. During temporary suspension, SCIRE cannot take any action without review and signature of the Medical Center Director. After a temporary suspension is imposed, the Veterans Affairs will review whether to order the dissolution of SCIRE.

Acceptance of Honoraria

Federal Law Title 18 USC 209(a) prohibits a VA investigator from receiving salary or any contribution or supplementation of salary from any source other than the United States Government as compensation for services as an employee of the United States.

Therefore, regarding honoraria, SCIRE can only deposit into an Investigator’s General Account(s) honoraria derived by an investigator who is on annual leave. SCIRE policy requires a letter from the investigator that states s/he was on annual leave before the honoraria will be accepted for deposit into his or her account(s).

Any honoraria derived by an investigator during their VA tour of duty or VA authorized absence must be accompanied by a letter that states the honorarium is a donation to SCIRE. SCIRE may deposit these monies to the individual investigator’s General Account.