The initial calculation of predicted expenditure was based on a simple 50% of total request being required by Reporting Stage 1 (halfway through the Project). However, with hindsight, this did not allow for the delays which occurred in appointing staff from Day 1 of the Project; which, as later became apparent, was an unexpected problem for some of the Groups. In addition, the UK Partners have a problem estimating costs based on the Euro/GBP exchange rate, which has fluctuated greatly over the last two years (between 1.2 and 1.6) and further fluctuations are expected throughout the remaining period of the Project, as the possibility of recession, or economic slowdown, continues.
Four of the Partners (UoP, NPLML, ENS and INESC-MN) have low %-expenditure (33%, 30.2%, 34% and 29% respectively). However, these particular Partners are highly committed to the final stages of the Project (Workpackage 4) and are expected to have a significantly higher expenditure during the final stages; (WP4 does not commence until Month 27 of the Project and the costs associated with this Workpackage are, potentially, relatively high). IMIC also appears to have a significant under spend (24.4%); once again, this reflects problems appointing personnel during year 1 of the Project.
It would appear that there are two major reasons for the underspend leading up to Reporting Stage 1:
a)
For the two UK Partners there is a highly significant problem associated
with the €/£ exchange rate, which is currently working against the UK partners
in that their projected costs were based on a higher exchange rate than
currently exists.
There is no easy solution to this problem and both Partners must remain cautious
with regard to actual expenditure – they cannot just assume that an underspend
can be corrected by increased expenditure.
b)
The other significant problem has been a delay in the recruitment of
suitable staff to the Project. This problem arises in most contract-based
Projects; as many Institutes will not initiate recruitment until the letter of
agreement for the Project arrives. The situation is further compounded
(for example, with IMIC) by problems associated with attracting suitable
staff.
However, for some Partners this can be corrected by using the “available”
funding to recruit additional staff (e.g. UoP is working with IMIC to attract
high quality graduates to the Project).
The second Reporting Stage includes all of Workpackage 4 – building a 'Prototype Device'. As mentioned above, this WP involves a significant commitment by all Partners who have underspent, and will require increased manpower, together with increased consumables expenditure from those Partners, as all the components and expertise is brought together to produce a single device. There will be an increase in exchange visits associated with developing the prototype and possible additional Workshops to discuss progress. This will use funds from the underspend and rapidly move the expenditure toward the targeted costs.
There is also an important commitment to protection of Intellectual Property (IP) generated by the Project, which includes at least three new Patents. This involves a significant total expenditure for Patent lawyers and the Partners involved have agreed that this process will be led by UoP and initial costs will be covered from the BioNano-Switch budget. At the Project outset, each Partner set-aside €5,000 for this IP protection and it is expected that these funds will be spent during Year 3.