Document Bv3Yx4vmYLgDEBVq59R3qvRLE

To: Cc: Subject: Burnett, Don (E-mail); Beatty, Pat (E-mail); Brian Doll (E-mail); Bill Broddle (E-mail) Bruce M. Jarnot (E-mail); Twerdok, Lorraine (E-mail); Stuart Cagen (E-mail); Tsai, Shan SP SHLOIL-SHLOIL-HE; Samuel, Tarita B SCC-CCFF-FN SHS Budget and Financial Statements - Proposal Dear SHS Colleagues, I have given some thought to how to format budget and financial statements for the Shanghai Health Study. Some basic concepts: Consistent language and formats Specified reporting schedule Clear line of accountabilities for approvals I have drafted some formats for your consideration. I propose that quarterly or semi-annually the Technical Committe provide to the Oversight Committee a Financial Report consisting both of the Budget and Financial Statements including a summary and individual statements in support of various grants and contracts. I have created simple title pages that would be placed in front of spreadsheets in a report binder. Title pages ~ Financial Reporting Package.do ... Patsy's Proposal.xls I have reviewed and made comments on the draft controls document. budget contruls draft - July 2... I look froward to our Aug meeting to get our financial controls in place. I welcome your comments. Patsy Clegg Product Steward Shell Chemical LP One Shell Plaza, 910 Louisiana, Houston, TX 77002-4916 Tel: +1 713241 2521 Fax: 3325 Email: pmclegg@shellus.com Internet: http://www.shell.com/chemicals SHELL-MCCLURG-066102 7/14/03 DRAFT Shanghai Health Study Budget and Financial Statements Oversight and Controls Preamble to describe purpose of paper SHS Budget Oversight and Controls establishes roles and responsibilities; processes, formats, and time lines for reporting the SHS Budget and Financial Statements. Effective Date Consortium Fiscal Responsibilities Oversight Committee Members consist of one representative from each funding sponsor company Responsible for all aspects of program budget [research (includes SRP and ERP), communications, legal and API administrative costs] Approves changes to budget Reviews and approves financial statements Establishes timing and format for budget and financial statements Annually reviews and approves grants and contracts Establishes invoice schedule for funding companies Commissions audits as needed Technical Committee Budget Workgroup Members consist of one ormore representative from each funding sponsor company Responsible for tracking and oversight of research budgets Provides research budget updates and financial statements to Oversight Committee every quarter, semiannually on February 1 and July 1. API Administration Track consortium income and expenses via API Financial Operations and Facilities Department financial management tools Prepare and administer consortium grants and contracts; payments processed and tracked through API Financial Operations Develop and maintain spreadsheets, as directed by the Oversight Committee to track consortium budget, income and expenses Consortium financial tracking spreadsheets updated on a quarterly/semi-annual basis, or more frequently at request of Oversight and/or Technical Budget Committees Or --- Budget Change Proposals and Financial Statements prepared on a quarterly/semiannual schedule - or more frequently as requested by Oversight and/or Technical Budget Committees Maintain all hard copy and electronic copies of budget and financial statements Invoice sponsors for payment of funds University of Colorado Research Grant Controls Define how a grant is different from a contract; do we have a contract with UC or Irons or do we have a grant or both? Develop grant agreements between API and researchers (University of Colorado and AHS) according to API policies and procedures To the extent possible under a research grant (as opposed to a binding contract), specify financial controls to include payment schedule, research progress reports and expense reports SHELL-MCCLURG-066103 7/14/03 DRAFT Bi-annual--Semi-annual detailed grant financial statements provided by University of Colorado financial department. To supplement U of CO expense reports and financial statements, API extracts financial information from these reports to produce dated grant spreadsheets for Technical Committee Budget Workgroup review and Oversight Committee approval Contract Controls Develop contracts between API and vendors (e.g. researcher, legal firm, public releations firm, SRP, ERP) according to API policies and procedures Contracts specify scope of work, milestones, deliverables, payments schedules and expense documentation (e.g. travel receipts), as appropriate for contracted services Invoices approved for payment by API technical contract officer, linking payment to deliverables and milestones Contracts amended/renewed on annual basis to provide close tracking and supervision of expenses Biannual Semi-annual detailed contract financial statements provided by contractors. To supplement contractor financial statements, API extracts financial information from these reports to produce dated contract spreadsheets for Technical Committee Budget Workgroup review and Oversight Committee approval API Administrative Cost Controls API staff time is retroactively charged back to consortium; based on actual hours worked, salaries paid and API overhead (facilities, financial support, legal support, etc.) API is contracted with the consortium to provide administrative support. Contract is reviewed and approved annually Consortium meetings (is this time, facilities, food, materials?) included in API administrative costs Monthly statement of operations used to track API administrative costs API provides a semi-annual financial statement to the consortium Technical committee for review and Oversight Committee approval .G~!J~rL!?.\J.g.g~1.P[l!J~lp.!~. Budget reports for a given period are fixed. Numbers are not changed. If an error is noted, an adjustment is put in next budget with an explanation. Budgets are dated and filed. One budget does not get continuously revised so that a record of budget changes is not possible to track. Financial statements for a given period are fixed. Numbers are not changed. If an error is noted, an adjustment is put in next financial statement with an explanation. Financial statements are dated and filed. One financial statement does not get continuously revised so that a record of changes is not possible to track. API financial person for project All changes approved and documented; monies are not moved around Approvals for changes are communicated to the API from the OC chairman in writing Consistent formats for financial statements Consistency in naming used in spreadsheets; use terms and definitions provided by Tarita Samuel. Suggest consortium adopt the following: o Budget - A monetary plan - simple or detailed - with a forecast! estimate of cash flows, revenue, expenses and profit or loss over a future period. o Financial Statements (the income statement definition) - A summary of the effect of revenues and expenses over a period of time SHELL-MCCLURG-066104 7/14/03 DRAFT o Income - Inflow of revenue during a period of time. o Expenses - created by consumption of economic benefit. Often referred to as expired assets. o Adjustment - Usually related to prior period cash or expenditure that was not recorded in the period in which it occurred. Adjustments should not be done very often but when adjustments surface, they should be recorded in the current period with an appropriate note to the adjustment. o Contract - A contract is generally an agreement to provide a product or service that is of direct benefit to the awarding agency. Contracts provide for payments to the University, which cover allowable project costs or payment of a fixed price for satisfactory completion of the project. o Grant - A grant is an agreement to accomplish something for the public good in exchange for money, property or services. Most federal agencies use a grant document for research awards to universities. Audits SHELL-MCCLURG-066105 Shanghai Health Study Benzene Health Research Consortium Budget and Financial Statement Date Period covering xxxx - yyyy Reviewed and Approved by Oversight Committee _DATE_ _ __ SHELL-MCCLURG-066106 Shanghai Health Study Benzene Health Research Consortium Budget Date Attached to a spreadsheet with the budget. Proposed changes to the budget: I Income I Ekpense IAmount IExplanation I Contract/$rant I Previous Amount I APproved / Rejected I Revised l SHELL-MCCLURG-066107 Shanghai Health Study Benzene Health Research Consortium Financial Statement Date Attached are spreadsheets for Summary financial statement Financial statement for UC grant Financial statement for Irons contract Financial statement for AHS grant Financial statement for SRP contracts Financial statement for ERP contracts Financial statement for APCO contract Financial statement for API contract Income Statement ETC SHELL-MCCLURG-066108