Exchange rates applied to foreign funds to be received for research purposes are guaranteed by the Office of Research.  The budget for a grant or contract is set based on this estimate.  When the actual cash is received, the conversion to CDN $ will create a difference from what was originally calculated due to fluctuations in the exchange rates, resulting in a budget variance.  The total amount of income, in CDN $, will be credited to income of the particular grant/contract.  The difference between budget and income will be handled, either at the end of the project or once all income has been received, in the following order:

1. As an adjustment to the final deficit/surplus position in the project,
2. May be used to cover a deficit in another project through budget adjustment, subject to granting agency's rules or,
3. Surplus of $1000 or more provided to the researcher as additional funds to spend against the project as a budget adjustment.

Finance
February 2002