Important considerations for items involving an in-kind contribution

October 27, 2017

Through the provision of in-kind contributions, the supplier community has a means of contributing to CFI-funded projects and establishing research partnerships. Voluntary in-kind contributions from suppliers are recognized as eligible partner funding. The institution must however ensure that the in-kind contributions reported to the CFI are real and properly valued.

Institutions have implemented various practices to achieve this. These include:

  • Identifying in-kind contributions as higher-risk items that require increased oversight: As an important component of the funding structure in many projects, in-kind contributions are carefully reviewed at the pre-award stage to ensure that the contributions included in the budgets are valid. The budgets are monitored carefully throughout project implementation, especially as in-kind contributions materialize. Institutions also ensure that the appropriate individuals (e.g. with the required knowledge and expertise) are involved in the review of these higher risk items. Significant in-kind contributions are often flagged from the start to ensure proper oversight and follow-up with the CFI as required.   
  • Having practices that help ensure the integrity of the procurement process: An example of this is having bid evaluation practices that help ensure the integrity of the process is maintained, and that suppliers provide accurate bidding and pricing information.
  • Fostering effective communication within the institution and research community, and with the supplier community:  An example of this is including material in the tender documents that help suppliers better understand the CFI and in-kind contributions, and the institution’s expectations in terms of bidding and pricing information to be provided. This often means defining the various pricing elements to ensure uniform interpretation and accuracy of the information provided by the respondent. Some institutions also include information on in-kind contributions and expectations in their training material and presentations to the research community.

    The CFI has developed sample material that can be used by institutions in their tender documents. This sample material should be tailored to meet the needs of each project and institution. The material can also be used as part of an orientation process, for example, to educate suppliers, researchers, or other individuals involved in the administration of CFI awards.
  • Exercising careful judgment when assessing the value of an item involving an in-kind contribution, recognizing the risk of overestimation in certain instances: For many, this means assessing the fair-market value of an item with professional skepticism; questioning and being alert to conditions which may indicate a possible misstatement.
  • Formalizing the process of assessing and documenting fair-market value: Many institutions have a formal process in place for tracking all items involving an in-kind contribution, and for assessing and documenting fair-market value. For example, some institutions have a written policy or internal documentation that describes the process and the roles and responsibilities of the individuals involved in the process. Some have developed templates to further guide staff through the process and ensure uniformity in its application (e.g. fair-market value assessment, review and approval). Specific procedures related to in-kind contributions are often included in control checklists (e.g. application and financial reporting checklists).

Here’s how some institutions have implemented these practices.

University of Alberta

The University of Alberta has formalized its processes surrounding items involving in-kind contributions.

The Partnership and Institutional Projects (PIP) unit, in collaboration with other relevant units with expertise (e.g. Supply Management Services), is responsible for ensuring that vendor discounts or donations presented in the pre-award budgets are valid in-kind contributions.

In-kind contributions are tracked in a database and monitored throughout project implementation. They are recorded in the university’s financial statements, and must be reviewed and approved before being posted in the university financial system. A formal process is in place to assess valuation and to document the work performed and the approvals. The level of review and approval depends on the value and the complexity of the transactions.

In its tender documents, the university communicates general information about the CFI, including important information on in-kind contributions (e.g. what constitutes an eligible in-kind contribution and definitions of the various pricing elements) to help ensure suppliers provide accurate pricing information in their bids.

Contact:

Kara Allanach
Manager Institutional Projects
Partnership and Institutional Projects Team
Research Services Office
Phone: 780.492.8936
Email: Kara.allanach [at] ualberta.ca

Queen’s University

The university has a formal process in place for assessing the value of items involving an in-kind contribution. The Strategic Procurement Services is responsible for reviewing the value of the items and documenting its assessment and conclusion. The extent of documentation depends on the value of the contribution. The assessment is documented more extensively for in-kind contributions over $100,000 or for items that may have a higher degree of risk associated with the purchase (e.g. computer software). Nonetheless, for lower dollar-value in-kind contributions, the project file contains all of the information that would have been considered for reviewing fair-market value.

Contact:

Kelly McGarry
Associate Director
Strategic Procurement Services
Phone: 613.533.3380
Email: Kelly.mcgarry [at] queensu.ca