Internal research charges

General Guidelines

Internal charge definition 

An internal billing for supplies/consumables or an identifiable service from one University of Waterloo department or organization unit to another. 

General authorization requirements 

Every purchase charged to a research account (fund 105), in whole or in part, must be authorized in writing by the principal investigator (PI) or a delegated signing authority. 

Authorization must be documented at the time of the purchase, immediately following the purchase, or upon the receipt of a statement. Signature authorizations must be dated so that evidence exists of when the authorization was made. 

In addition to these general guidelines, refer to authorization and documentation information specific to the scenarios below. It's the PI’s responsibility to ensure that all purchases charged to their research accounts are authorized. 

General supporting documentation requirements 

Every purchase charged to a research account (fund 105), in whole or in part, must be supported by appropriate documentation. Generally, this documentation is in the form of a receipt, invoice, purchase confirmation, or statement provided by the internal charge source. 

Ensuring that appropriate documentation exists and is retained is a shared responsibility: it's the responsibility of the internal charge source to provide the documentation and the responsibility of the PI to obtain and retain the documentation. 

Supporting documentation must include: 

  • The account and posting attribute to which the purchase is charged 
  • A description of the item(s) or service(s) 
  • The amount of the expenditure and where applicable, the method of calculation or attribution must be included (e.g. the number of hours used and the hourly rate) 
  • Authorization 
  • The time period during which the service has been (or will be) provided (as relevant) 

Supporting documentation (including authorization) must be retained for seven years from the transaction date and be available for audit purposes. It's the responsibility of the PI and/or their department/institute/school to determine how documents are retained in their unit. Refer to the University’s record management policy for more information. 

Facility and equipment usage fees

Internal charges for facility and equipment usage fees include costs incurred for the use of specific facilities (e.g. a laboratory) or equipment (e.g. an autoclave). 

For facility and equipment usage fees to be charged to research accounts, an effective process must be in place to enable the internal charge source to accurately capture the usage/provision of the service and allocate the cost to the appropriate account(s). Fees for the use of facilities and equipment must be based on an objective method of calculation or attribution. Examples include: 

  • The passage of time (e.g., the facility is rented at an hourly, daily, weekly or term rate of $X) 
  • The volume or weight of materials processed (e.g., the equipment charge is determined at a rate of $X per kilogram or $X per cubic meter) 
  • The specific number of units processed (e.g. each water sample tested using the equipment incurs a charge of $X) 

It's strongly encouraged that internal charge sources make standard price lists available online or upon request. Subjective or lump sum charges which cannot be attributed objectively cannot be charged internally. 

Authorization and supporting documentation requirements 

Authorization and documentation can be in one of the following formats: 

  • A receipt, purchase confirmation, invoice, or statement e-mailed to the PI or a delegated signing authority 
  • A hard copy receipt, purchase confirmation, invoice, or statement signed and dated by the PI or a delegated signing authority 

The supporting documentation must itemize the specific facility and/or equipment for which charges have been incurred and the method of calculation or attribution. 

In-person purchases

In-person internal charges are made when a purchaser is physically present when a transaction is initiated or completed. The purchaser may be the PI, a delegated signing authority, or someone without delegated signing authority. 

The required supporting documentation for in-person purchases is dependent on how the authorization is provided. In all cases, the documentation must contain the detail listed in the general guidelines above. 

Authorization and supporting documentation requirements 

Authorization and supporting documentation for in-person purchases can be obtained in the following ways: 

  • Approval in advance of purchase 
    • E-mail or signed written instruction from the PI or a delegated signing authority requesting the purchase to be made. This written approval must include a maximum price and should be attached to the receipt 
  • Approval at time of purchase 
    • Signature of the PI or a delegated signing authority on the receipt, invoice, purchase confirmation, or statement provided at time of purchase 
  • Approval via documentation provided by internal charge source subsequent to the purchase 
    • Receipt e-mailed to the PI or a delegated signing authority or a hard copy receipt mailed by the internal charge source which has been signed and dated by the PI or a delegated signing authority. Invoices, purchases confirmations, or statements are acceptable forms of documentation

Online purchases

Internal charges are procured online by a purchaser using the website of an internal charge source or an e-mail. The purchaser may be the PI, a delegated signing authority, or someone acting upon instructions provided by the PI or a delegated signing authority. 

Authorization and supporting documentation requirements 

Online purchases are confirmed when the purchaser provides an account code and work order on the website of an internal charge source or in an e-mail and then submits the order. Authorization and supporting documentation for online purchases can be obtained in the following ways: 

  • An order confirmation/receipt is provided by the internal charge source which shows that the purchase was made by the PI or a delegated signing authority (e.g. by a screenshot) 
  • An order confirmation/receipt is provided by the internal charge source which is signed and dated by the PI or a delegated signing authority 
  • An order confirmation/receipt is e-mailed to the PI or a delegated signing authority 

Standing approvals

Standing approvals are used to document and authorize internal charges which are recurring in nature; they are also referred to as pre-authorizations or blanket approvals. Documentation and authorization is arranged in advance of charges being incurred. For standing approvals to be used, the internal charge source must accurately capture the usage/provision of the goods/services and allocate the cost to the appropriate research account(s). 

Authorization requirements 

Authorization for standing approvals must be obtained in advance of the recurring charges and can take the following formats: 

  • Written instruction from the PI or a delegated signing authority provided to an internal charge source; the written instruction can be provided by someone without signing authority provided it has been authorized by the PI or a delegated signing authority 
  • Confirmation of pending recurring charges e-mailed by an internal charge source to the PI or a delegated signing authority or a hardcopy which has been signed and dated by the PI or a delegated signing authority 

If a billing-rate change occurs during the period of pre-authorization that would increase the costs charged to a research account, the internal charge source must obtain authorization of the billing rate change prior to its implementation. 

Supporting documentation requirements 

Documentation requirements for standing approvals have two stages: 

Stage 1 – documentation at time standing approval is arranged; this must include: 

  • The period for which the pre-authorization is in effect (usually not more than a year) 
  • The maximum amount of the pre-authorization (based on an estimate of the volume of the service/goods to be provided) 
  • Signature of the PI or a delegated signing authority or equivalent e-mail instruction 
  • The account and posting attribute to which the purchase will be charged 

Stage 2 – periodic documentation after internal charges have been incurred; this must include: 

  • A regular, detailed statement of account signed and retained by the PI or delegated signing authority or e-mailed to the PI or delegated signing authority