From an institutional perspective, the financial management of multidisciplinary systems projects is essentially the same as for other externally funded projects. Normal accounting and budgeting procedures can easily accommodate systems projects, even those with a large number of subcontracts. However, the complexity of systems projects and the need for group decision-making create distinct issues for managing the budget.
Dealing with a Reduced Budget
Research proposals are often not funded at the level of the budget request, and systems projects are no exception. Ideally, the project team will have identified lower-priority components or will have discussed scaled-down versions of the project before a funding decision is made. However, meeting proposal deadlines is stressful, and most teams do not spend time on these hypothetical issues until they receive funding. How can the newly formed team make cuts with the least amount of conflict?
One common approach is to require a flat reduction of all budgets; in other words, each co-PI cuts their budget by an equal percentage and plans for a corresponding reduction in their activities. This approach can work well when the budget reduction is 10 percent or less. It can still work with reductions up to 20 percent, but making significant cuts across the whole project requires care to avoid undermining collaborators who have more fixed responsibilities. For example, it may be difficult to produce 80 percent of an educational product. Also, for collaborators who had a very small budget to begin with, a 20 percent reduction can make it difficult to continue to participate, particularly for nonacademic partners. Some teams opt for a modified version of this procedure that assesses a smaller reduction on collaborators with smaller budgets (e.g., those with less than $30,000 reduce their budgets by 10 percent while everyone else applies a 20 percent budget cut). This allows for adjustment and accommodation of different participants while avoiding the difficult process of weighing project priorities.
A more selective approach to budgeting is often needed, especially for reductions greater than 15 percent. In some cases, the review panel will provide feedback that helps to identify parts of the project as high or low priority. The funding agency may provide guidance in developing a revised plan, especially if the budget reduction is major. This will ensure that the revised project fits the expectations of the funding agency and can reduce the potential for conflict by shifting the responsibility for making cuts away from the team. When budget reductions are moderate (20 to 30 percent), reallocate funds based on group discussions of priorities and options for project redesign. If the team is still forming, conduct this process as openly as possible so that everyone can feel the rebudgeting was fair. Project leaders play an instrumental role in this first crucial decision, which will set the tone for the work that follows. In very large projects with multiple subcontracts, project leaders can work with smaller groups to identify possible cuts and then vet these ideas with the whole team.
If the project has been awarded support with a major reduction, the reallocation process can cause major conflict, especially if some components are eliminated and some collaborators are left without funding. Some large systems projects have been funded at a mere 25 to 50 percent of the requested budget, and implementing such large cuts can cause irreversible damage to a new collaborative team. Groups that have worked together previously and have become an established team are more likely to weather major budget cuts.