This page provides information for higher education providers (HEPs) regarding the Higher Education Research Data Collection (HERDC), the HERDC specifications, and research and development (R&D) income data, and should be read in conjunction with the relevant year’s HERDC specifications and other associated documents.
On this page:
1. How is R&D income data reported?
HEPs submit their R&D income data via the System to Evaluate the Excellence of Research (SEER).
Instructions for the submission of R&D income data are available on the Australian Research Council (ARC) website.
2. Who do I contact to change or assign HERDC roles in the System to Evaluate the Excellence of Research (SEER)?
For assistance with HERDC roles in the SEER, please contact HERDC@ARC.gov.au
3. Where can I find information on HERDC roles in the System to Evaluate the Excellence of Research (SEER)?
The Australian Research Council (ARC) provides a detailed user guide for each HERDC role.
4. Can someone other than the Vice-Chancellor certify my HEP’s HERDC return?
Section 2.4.2 of the HERDC specifications requires that Vice-Chancellors (or equivalent) must certify their HEP’s R&D income return is correct and has been compiled in accordance with the specifications. The certification statement in the System to Evaluate the Excellence of Research (SEER) includes, for example, Chief Executive Officer as ‘equivalent’ to Vice-Chancellor. If the relevant person is appointed to this level, or is acting at this level at the time of submission, then they will need to set up an account in SEER with the ‘HERDC Certifier’ role.
More information on the roles in SEER can be found on the ARC’s Instructions for the submission of HERDC webpage.
5. How do I determine if a specific research activity constitutes R&D?
HEPs are responsible for ensuring that R&D income is reported in line with the latest HERDC specifications in consultation with their auditors. HEPs self-assess whether or not an activity constitutes R&D, and which category that income should be reported under.
Section 3 of the HERDC specifications provide guidance to help you with your self-assessment.
6. How do I determine if income is suitable to report?
HEPs should only report the portion of income that it determines to be R&D income in accordance with the current HERDC specifications in consultation with their auditors. This may or may not be the whole amount of a grant or other source of income.
Section 4.1 of the HERDC specifications provides guidance to HEPs to assist with their self-assessment of their research income.
7. How do I determine whether a research grant is eligible to be considered Category 1 income?
Section 4.2 of the HERDC specifications set out R&D income that is eligible and ineligible to be included in a HEP’s HERDC return, including grants or funding from specific programs. This section and the decision tree in section 5.1 provide HEPs guidance for self-assessing Category 1 eligibility.
HEPs are encouraged to discuss with their auditors the appropriate classification of research grants at the category and sub-category reporting levels.
8. How do I determine if research funding is ‘nationally advertised’ and ‘available to all HEPs’ as per the requirements for Category 1 income?
‘Nationally advertised’ is defined in section 5.1.1 of the HERDC specifications as providing all potential applicants throughout Australia with equal opportunity to become aware of and apply for the research funding through any combination of direct contact, such as newspapers, journals, magazines, internet, or other printed or electronic media.
9. Is Australian Research Council (ARC) and National Health and Medical Research Council (NHMRC) funding that is competitive, but targeted to specific HEPs, eligible to be categorised as Category 1 income?
No, ARC and NHMRC grants that are awarded on a targeted competitive basis do not satisfy the requirement of being ‘available to all HEPs’ to be considered Category 1 income and should instead be reported as Category 2 income. See question 10 for further advice.
10. What are examples of Medical Research Future Fund (MRFF) funding that does not meet the criteria to be considered Category 1 income?
When determining if income can be counted as Category 1, HEPs should consult the decision tree, located in section 5.1 of the HERDC specifications.
If particular MRFF funds do not meet all the criteria to be considered Category 1 income, they may be eligible as Category 2 income, and reported at either sub-category 2.1 Commonwealth (own purpose), or 2.2 Commonwealth (other).
MRFF funding may not be eligible to be included in the R&D income return if they do not meet all criteria. Such funding is listed at the exclusion list at section 4.2.2.
The classification and inclusion of MRFF funds should be discussed between HEPs and their auditors.
11. What type of verification is required for smaller donations received from fundraising or crowd funding under sub-category 3.3 Australian philanthropy?
As for all income, section 2.7 of the HERDC specifications states that HEPs must maintain verification material to demonstrate that R&D income meets the criteria of the categories being reported.
Verification material that clearly identifies that the donation or crowd funding is for the purposes of research is acceptable. HEPs must also retain other documentation that verifies the research being undertaken. For instance, a HEP will need to be able to demonstrate a link between a specific research project(s) and the donation(s).
12. My HEP received a multi-year grant and received the full grant value in the first year. In what reporting year do we report the grant amount?
Under section 4.1 of the HERDC specifications, R&D income must be net receipted income, received in the reference year and recognised in the HEP’s financial system as being related to that reference year.
The amount the HEP should report in any one year will therefore depend on the amount that was received in that year as well as the basis of accounting (cash or accrual).
13. What is the difference between a subsidiary and affiliate?
The key difference between a subsidiary and an affiliate is whether the HEP controls the entity or not. An entity that is controlled by the HEP is considered a subsidiary, while if the HEP does not control the entity, and instead has a formal legal relationship, as described at section 4.3.1 of the HERDC specifications, the entity is considered an affiliate.
14. Does the department provide examples of what is and is not an affiliate arrangement?
Individual HEPs are best positioned to determine whether arrangements between the HEP and another organisation constitutes an affiliate arrangement. Given this is self-determined and a decision of respective HEPs, the department does not provide specific examples of affiliate arrangements.
15. Are all medical research institutes (MRIs) affiliates?
No, whether an MRI is considered an affiliate of a HEP is dependent upon the relationship between the two entities and whether that aligns with guidance provided for the description of an affiliate in section 4.3.1 of the HERDC specifications.
As with other determinations regarding affiliates, individual HEPs are best positioned to determine whether arrangements between the HEP and an MRI constitutes an affiliate arrangement.
16. My HEP has an affiliation agreement with a research organisation, which is a separate legal entity. The research grant income is applied, receipted and managed by my HEP. Should this income be reported as HEP income or affiliate income?
If the separate legal entity is not a subsidiary, or a controlled entity, and meets the eligibility requirements of income as an affiliate of your HEP under section 4.3.1 of the HERDC specifications, then the R&D income should be reported in the ‘affiliate’ column of the HERDC submission.
In some instances, the research income is considered ‘shared’ income, as described in section 4.3.1. Under these circumstances, HEPs can only report the income received or retained following the distribution of shared income.
17. If an affiliated entity receives R&D income directly, and the researchers associated with the research have an employment arrangement with my HEP, can I include the income in our HERDC return?
As per section 4 of the HERDC specifications, any R&D income included in a HEP’s HERDC return must be net receipted income, received in the reference year, and recognised in the HEP’s financial system as being related to that reference year. This includes income reported through affiliate arrangements, which must be net receipted income and commensurable with the employment arrangements as stated in section 4.3.1 of the specifications.
18. Can interest earned on donations be reported in my HEP’s HERDC return?
This depends on whether the interest is expended on R&D or not. Interest earned on a donation that is used for R&D is eligible to be included in the income return as described at section 4.2.1(e) of the HERDC specifications, providing the research activity meets eligibility requirements under section 3. This includes interest earned on a donation that was made not for the purposes of research.
If the interest earned is eligible, the interest income would be reported at sub-category 3.3 or 3.6 depending on if the donation was made from an Australian or international source.
Where the interest is not expended on R&D, the interest earned on the donation is excluded as described at section 4.2.2(d).
19. Can I change my HEP’s financial reporting basis?
HEPs can change their reporting basis from cash to accrual or vice versa. Changes in reporting basis are monitored and HEPs are required to advise the department of their reporting basis in their HERDC submission made through System to Evaluate the Excellence of Research (SEER).
20. Who do I contact if I have any additional questions?
For more information, email RBGrants@Education.gov.au