When working with third parties (UK and overseas), it is important that a risk assessment is undertaken before an award is accepted. Many of the College’s main funders require lead institutions to carry out due diligence checks on third parties who undertake activities funded by a research grant or contract. If Imperial is a research partner and is planning to transfer funding to other third parties, there is still a requirement to conduct due diligence checks on each third party associated with Imperial’s part of the project. While each institution will determine its own appetite for risk, funders expect to see a clearly documented internal process for identifying, assessing and mitigating risks. This is good practice for any organisation regardless of funder specific requirements.
To clarify the operational process, responsibilities and escalation routes at Pre- and Post-Award, the Research Office has developed the Research Third Parties Framework for Managing Due Diligence [PDF]. Applying the Framework will help with the early identification of any risks that may impact the College's reputation, financial position, academic standards and research integrity, and to mitigate these during the lifetime of the research project.
Research Third Parties: Relationship Review Questionnaire
In the first instance, the Principal Investigator (supported by their Department) should complete a Research Third Parties: Relationship Review Questionnaire [Word] with the direct input of the third party organisation. A separate questionnaire should be completed for each third party associated with the project. The questionnaire considers a broad spectrum of financial, reputational, ethical, safeguarding and geo-political risks involved in research relationships.
The questionnaire should be completed as soon as the relationship is established and before an award is accepted so any mitigating actions can be taken, such as making appropriate changes to the research sub-agreement and the department’s project management plan. The completed questionnaire should be sent to firstname.lastname@example.org for independent assessment by the Research Office. A summary of the risks identified and any recommended mitigating actions will be provided to the PI, Department, Faculty Reesearch Services and Faculty Contracts.
A comprehensive Overseas Research Toolkit is also available to guide PIs and Departments working with overseas partners at both Pre-Award and Post-Award stages, providing best practice advice, guidance and further recommendations for developing and managing international relationships.
Due Diligence Responsibilities and Exceptions
Due Diligence Accordion
Principal Investigator and the academic department
- Undertake a due diligence review of each Third Party and providing general oversight
- Assess each Third Party’s suitability before an award is accepted using the Research Third Parties: Relationship Review Questionnaire
- Provide copies of completed and authorised due diligence documentation to the Research Office email@example.com as soon as possible after a proposal is submitted, but before award acceptance stage.
- Review the Research Office Risk Assessment recommendations and implementing mitigating actions at award acceptance stage.
- Confirm the work activities to be undertaken by the Third Party and taking account of any non-standard terms and conditions included within the subcontract agreement.
- Establish Third Party monitoring processes to oversee progress and agreed deliverables.
- Monitor the timely receipt of scientific reports from the Third Party as required.
- Support Faculty Research Services with the financial management and monitoring of Third Party expenditure and facilitating the resolution of queries as necessary.
- Liaise with the Faculty Contracts Team during the lifetime of the award where amendments to the subcontract agreement are required
Faculty Contracts team
- Review the Research Office Risk Assessment recommendations.
- Incorporate non-standard terms and conditions and additional clauses into the subcontract agreement during the negotiation process to mitigate any identified risks.
Faculty Research Services team
- Send relevant financial templates to the Third Party to support Post-Award financial reporting and invoicing.
- Notify the PI and academic department where Third Party expenditure is ineligible or outside the allocated budget and liaise with the Third Party if further clarification and detailed justification is necessary.
- Review and approve invoices submitted by the Third Party, confirming expenditure is in line with the awarded budget and funder terms and conditions.
- Engage with the PI and academic department on the financial progress of the Third Party throughout the lifetime of the award.
- Undertake independent assessments of Research Third Parties: Relationship Review Questionnaires and recommend mitigating actions.
- Work with the PI, academic department and Faculty Research Services to monitor and review the relationship with the Third Party during the lifetime of the award and conduct end of project Third Party relationship assessments as required.
- Monitor and enhance the tools provided to the PI, academic department and Faculty Research Services to ensure they remain fit for purpose.
- Provide guidance and training on the due diligence and monitoring process to relevant stakeholders.
- Undertake assurance reviews of the due diligence process and the implementation of recommended mitigating actions as appropriate.
- Maintain records of risk assessments in line with data protection and GDPR requirements.
Exceptions to due diligence checks
Exceptions to Third Party due diligence checks will apply to either of the following:
- When the Third Party organisation is eligible to receive UKRI funding, is on the HESA List of UK higher education providers or is a UK Government Department, agency or public body
- When the project is funded by the European Commission (EC) and the Third Party is a proposed “beneficiary” to the EC Grant Agreement
(NB: The EC conducts its own financial and organisation validation of a beneficiary, but appropriate due diligence checks will be required on other third parties who are engaged to deliver activities).