Sponsored Project Training Program University Operating Procedure on Cost Transfers December 10, 2012 Sponsored Projects Training Program1

Sponsored Project Training Program

University Operating Procedure on Cost TransfersDecember 10, 2012

Sponsored Projects Training Program 1

What we will cover . . . Definition of cost transfersPolicy and best practices to avoid cost

transfersDifferences between the current and

new processesBack up documentation requirementsHelpful tools


Cost Transfers Involving Sponsored Agreements UOPEffective January 1, 2013Replaces two current policies

◦Cost Transfers on Grants & Contracts◦Sponsored Projects Expense Transfer

http://www.uvm.edu/~cntrllrs/cas/Cost_Transfers_UOP.pdf




Premise for the UOP Atmosphere of compliance enforcement– OIG

audits◦ A high volume of cost transfers may indicate

inadequate controls or inappropriate grants management practices

Sponsored funds should never be used to park expenditures

Expenses should not be posted to the sponsored funds for the sole purpose of expending the unspent balance.

Department suspense balances

Balance as of $$

12/1/2010 $2.8m

12/1/2011 $2.4m

12/1/2012 $2.5m


Federal Regulations OMB Circular A-21:

◦ Any costs allocable to a particular sponsored agreement…may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreements, or for other reasons of convenience.

NIH Grants Policy statement◦ Cost transfers to NIH grants by grantees, consortium participants,

or contractors under grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee, consortium participant, or contractor. An explanation merely stating that the transfer was made "to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.


DefinitionCost transfer is an after-the-fact

reallocation of a cost from one University budget to another


Examples of Cost TransfersRetrospective salary

redistribution Journal entries to move costs

from one sponsored project to another


What is not a cost transfer?Purcard reallocationsInter departmental billings (IC

journal entries)Set up of distributions in EPM at

the time of budget buildingRecoding of expenses on the

same project


Steps to Mitigate Cost TransfersCost policy

◦Direct costs must meet OMB A-21 cost principles

◦ http://www.uvm.edu/policies/grants/SponAgree_CostPolicy.pdf

Effort Management and Reporting Policy◦Updated policy effective August 1,

2012◦Consistent use of Institutional Base

Salary (IBS)◦Quarterly reviews of effort◦Timely certifications of effort◦ http://www.uvm.edu/policies/grants/effortreporting.pdf


http://www.uvm.edu/policies/grants/SponAgree_CostPolicy.pdf

http://www.uvm.edu/policies/grants/SponAgree_CostPolicy.pdf

http://www.uvm.edu/policies/grants/effortreporting.pdf

http://www.uvm.edu/policies/grants/effortreporting.pdf

Steps to Mitigate Cost TransfersGrants Management Best Practices

◦Guarantee funding/advance accounts◦Setup◦Management◦Closeout

Use of unrestricted funds or departmental suspense in some instances

SPA grant financial management website: http://www.uvm.edu/spa/?Page=awards.html Sponsored Projects Training

Program 10

http://www.uvm.edu/spa/?Page=awards.html

http://www.uvm.edu/spa/?Page=awards.html

Advance Accounts (AA)Formerly called Guaranteed FundingDevelop advance account memo upon

notification of funding from sponsor Collaborative effort between the PI and department

administrator Allows SPA to create a chartstring in PeopleSoft

The following must be completed before an AA chartstring may be set up:◦ Conflict of interest disclosures◦ Animal or human subject protocol approvals in

placeLeave adequate time for processing


Post-Award Best PracticeAward Setup• Upon the setup of the chartstring

SPA will notify the PI, department administrator, and Dean’s Office

• Department administrator should meet with the PI to discuss the following:Start date of research and Pre-award spendingPersonnel expending effort on the grant

Compare committed effort to actual effort Ensure there are no reductions in effort greater than 25% or

absences of more than three months Must make changes to any applicable distribution forms

• Grant cost share requirements Use faculty workload form/routing form to determine the

funding source for cost share commitment Change applicable distribution forms Contact Dean’s Office for budget transfer to cost share

chartstringSponsored Projects Training Program 12

Best Practice Award ManagementKey considerations in award managementPerform on a monthly basis:

Run the Project Monthly Budget Report for all departmental grants

Monitor for overdrawn or over encumbered projectsReview expenses for allowabilityProvide PIs with a copy of the reportsReview & make changes to departmental suspenseReview and resolve all budget checking errors

Use either the Closeout Report or query “UV_GM_KK_ERRORS_ALL” (financial module)

Review and submit all journal entries awaiting submission or posting Use either Closeout Report or query

“UV_RC_GL_JE_NOT_SUBMITTED” (financial module)


Best Practice Award Management• Perform on a quarterly basis:

Run the Closeout Report for all departmental grantsEnsure personnel are not distributed past end date

of grant Use query “UV_DIST_PAST_PROJECT_END_DATE”

(HR module)Compare committed effort to actual effort

For both the PI and key personnel Ensure there are no reductions of greater than

25% or absences of more than three monthsMeet with PI to review grant budget status, effort,

and upcoming quarter plansMake prospective distribution changes as

necessaryRun Cost Share Summary• Ensure cost share commitments are met (including third party)


Best Practice Award ManagementOther considerations

◦Purcard management◦Obtain sponsor prior approvals when

necessary◦Integrate effort planning into unit

budgeting


Best Practice Award Closeout• SPA will notify departments of grants ending

within 90 days on a monthly basisDepartment administrators meet with PIs to

discuss: Closeout process Cost share activities Assist with a no cost extension if needed


Best Practice Award CloseoutCloseout Timeline:

30 days prior to grant end date: Run Closeout Report Review expenses to ensure they are allowable Review all salary expenses for allowability, allocability,

reasonableness, consistency Use query “UV_PAY_ERN_DIST” (HR module)

Notify internal billers of any chartstring changes Change default chartstring for relevant Purcards and

expense reports Resolve budget checking errors

Use either the Closeout Report or query “UV_GM_KK_ERRORS_ALL” (financial module)

Contact Procurement Services to close all operating encumbrances

Ensure cost share commitments will be met (including third party)


Best Practice Award CloseoutCloseout Timeline (cont.):

20 days after grant ends: Run Closeout Report and resolve any remaining issues

30 days after grant ends: Confirm with SPA that grant is ready to close and the final

report is ready to be completed Sponsored Project Administration prepares and

submits final financial report to sponsor and soft closes award to prevent additional transactions from posting


Justification and Documentation of Cost TransfersJustification must include:

◦Reason for error (why was the charge posted on the current chartstring)

◦Reason why the charge is appropriate on the chartstring where it is being transferred to

◦If the original transaction is over 90 days old, description of the extenuating circumstances that justify the transfer along with the planned/implemented corrective action to prevent similar occurrences in future


Justification and Documentation of Cost TransfersStandard form required for all

payroll & non-payroll cost transfers

Form is available on the CAS website: http://www.uvm.edu/~cntrllrs/cas/cost_transfer_form.pdf


http://www.uvm.edu/~cntrllrs/cas/cost_transfer_form.pdf



The form



Instructions in the justification form

Examples of Extenuating CircumstancesAppropriate:

◦Late issuance of official communication regarding a sponsored agreement (activation of a new award or advance account, full execution of a subcontract, an extension of time, incremental funding, etc.)

◦Failure of another department to take action when supporting documentation has been promptly submitted


Examples of Extenuating CircumstancesInappropriate:

◦Expense review happens less than quarterly, so the error was not discovered in a timely manner

◦Absence of PI or business unit administrator

◦Staff’s lack of experienceUntimely cost transfer without

extenuating circumstances must be charged to institutional funds


Authorization and ApprovalsWithin the department, the person who

prepares cost transfers and who approves them should not be the same person

The PI should approve all late cost transfers submitted more than 90 days from the accounting date of the original transaction

Approval via ◦Signature, preferred◦Email◦Electronic workflow (not yet available)


Authorization and ApprovalsCentral Unit Approval

≤90 days

Payroll TransferNon-Payroll Transfer

Cost Accounting Services (CAS)Sponsored Project Administration (SPA)

>90 days

All transfers with extenuating circumstances

Appropriate approval from CAS or SPA and a Vice President (or designee) Approval


Clarification of the 90 days - Payroll

Original Date: ◦ Use the General Ledger (GL) accounting

date of the oldest transaction in the transfer request

Request Date: ◦ Most recent signature date of the

department approver on the cost transfer request

Example: Payroll from an effective dated row of 7/1/12 is being transferred to a grant. Preparer signs it on 10/1/12, department approver signs on 10/5/12, and the PI signs the salary distribution on 10/07/12. ◦ Original Date = 7/15/12◦ Request Date = 10/05/12◦ Days after original date is less than 90 days


Clarification of the 90 days – Non-Payroll

Original Date: ◦ Use the General Ledger (GL) accounting

date of the oldest transaction in the transfer request

Request Date: ◦ The submission date (initiated date in

approval tab of the journal) of the GL journal

Example: Research supply transactions from July 2012 are being transferred to a grant. The oldest GL accounting date of the transactions is 7/1/12. Journal is submitted for approval on 10/07/12.◦ Original Date = 7/1/12◦ Request Date = 10/07/12◦ Days after original date is greater than 90 days


Justification and Documentation of Cost Transfers


Supporting documentation for Payroll Cost Transfers:

Salary distribution revision Additional pay form revision Wage revision

Payroll Cost Transfer – Salary Distribution Retroactive Revision

Electronic Salary Distribution Retroactive Revision

• Incorporate all applicable changes within one month of being notified of available chart string(s)

• Cost transfer memo from the electronic salary distribution program is required for retroactive revisions

• Route printed forms for required signatures.

Other Supporting Documentation (When applicable)

• Effort Certifications • Effort Re-certifications and employee

justification

Email legible scanned copies to [email protected] or mail hard copies to Payroll Services (237 Waterman)


mailto:[email protected]

Payroll Cost Transfer Types – Addl Pay Form Revision

Required Documentation

• Clearly mark up a copy of the original APF with changes indicate “Revision only” on the copy

• Combocode(s) and chartstring(s) changes are both required

• Cost transfer justification form is required for retroactive revisions which affect sponsored agreements

• Provide contact info (person’s name, email, phone)

• Email to [email protected] or hardcopies to Payroll Services 237 WatermanSponsored Projects Training

Program 31



Cost Transfer Forms


Payroll Cost Transfer Types – Wage Revision

Required Documentation

• Cost transfer justification form is required for retroactive revisions which affect sponsored agreements

• Payable Time Detail of original hour submission is required• Run UV_TL_PAYABLE_TIME_DETAIL query (HCM)• Cleary identify which hours of each day from the

original submission are being transferred • Add attestation statement which includes the

destination project(s) to output and have employee or supervisor certify

Additional Documentation • Pay Earn Distribution (if applicable)• Provide contact info (person’s name, email, phone)

Email to [email protected] or send hardcopies to Payroll Services 237 Waterman



Payroll Cost Transfer Types – UV_TL_Payable_Detail

* Project Business Unit, Description, Start Date and End Date will be added shortly to this output


Justification and Documentation of Cost Transfers


Supporting documentation for Non-Payroll Cost Transfers:◦Cost transfer request justification

form◦Monthly Budget Report (MBR)

Original chartstring, reference numbers, and accounting date

Additional info for non-salary cost transfers

Journal entry attachmentsAbility to add supporting

documents to JE in PeopleSoftEffective January 1, 2013, only

online justification/documentation will be accepted◦Please don’t send paper copies!

Job aid forthcoming


Additional info for non-salary cost transfers – changes to the MBRs


Current By January 1, 2013

The transaction data in xls/pdf does not return information for more than one period

Data for more than one period can be obtained for one project or one award. Multiple awards or projects(not within the same award) cannot be run for multiple periods

The data can be obtained only for closed periods

Data can be obtained upto the previous day’s transactions.

Report can be run by fiscal year

No changes, data for multiple periods within the same fiscal year.

Comparison of old & new processes


Expense(s) to be transferred identified and approved by

the PI, department administrator, etc.

Salary Cost Transfers: Revised Distribution is entered into PeopleSoft.

Non-Salary Cost Transfers: Journal is entered into People Soft.

Back-up documentation is forwarded to CAS/SPA.

Late Cost Transfer Memo is submitted to CAS/SPA if the original transactions posted

more than 90 days ago.

Expense(s) to be transferred identified and approved by

the PI, department administrator, etc.

Salary Cost Transfers: Revised Distribution is entered into PeopleSoft.

Non-Salary Cost Transfers: Journal is entered into People Soft.

Cost Transfer Memo should be filled in; someone other than the person preparing the

form must also approve it.

Per process described, back-up documentation is submitted to the

appropriate central unit, including the Cost Transfer Memo (if original transaction is older than 90 days, the third and fourth questions must be answered and the form should be

approved by the PI)

Requests > 90 days are approved only with extenuating circumstances by the

appropriate Vice President or designee before they are processed.

Current Process New Process

Case study1 – Retro salary distribution


During the effort certification process in August 2012, a PI modifies her effort report to reflect 10% effort on “Grant A“ during the 4/1/12-6/30/12 time period and signs the effort report.

• What is the original posting date of this cost transfer request?

• Would this cost transfer be considered untimely?• What signature(s) are required on the cost transfer

form?• Is there any additional documentation required to be

submitted with the electronic salary distribution form?• Is corrective action needed?

Case study 2 – Addl pay redistrib


An additional pay for a 9 month faculty member is submitted and paid in July 2012 for effort applied during the 6/1/12-8/15/12 time period on Grant B.

During the effort certification process in September 2012, the faculty modifies her effort report to reflect 50% effort on both “Grant A“ and Grant B” during the 6/1/12-8/15/12 time period and signs her FY12 effort report.

• What document and changes would be required to support the cost transfer request?

• What is the original posting date of the cost transfer request(s)?

• Would any cost transfer request be considered untimely?• What signature(s) would be required on the cost transfer form?• What additional documentation is required with the cost

transfer request(s)?• What would be appropriate corrective action to pursue?

Case study 3 – Wage revision


During the quarterly review meeting in September with a PI, the PI and dept administrator discover a temp employee wages were mistakenly charged to just Grant D during the first FY13 bi-weekly. The 75 hours should have been split between Grant D and Grant E.

• What is the required source information for this cost transfer?• What changes are required to the source information? • Would this revision be considered a re-certification of effort? • What is the original posting date of the cost transfer request?• When would this cost transfer request be considered untimely?• What signature(s) would be required on the cost transfer form?• What documentation is required to be submitted with this cost

transfer request?• Is corrective action warranted?

Additional resources/training opportunitiesDecember 2012

◦Email communication with: Link to this presentation Link to the forms and UOP Link to the journal attachment job aid And more!

January 2013◦Open Labs◦More sessions


Additional resources/training opportunitiesFor payroll cost transfer

questions, call Cost Accounting Services at 6-1375

For non-payroll cost transfer questions, call your SPA financial administrator at 6-3360

CAS cost transfer website:http://www.uvm.edu/~cntrllrs/cas/?Page=cost_transfer.html&SM=rctmenu.html


http://www.uvm.edu/~cntrllrs/cas/?Page=cost_transfer.html&SM=rctmenu.html

http://www.uvm.edu/~cntrllrs/cas/?Page=cost_transfer.html&SM=rctmenu.html

Questions??


Documents

Sponsored Project Training Program University Operating Procedure on Cost Transfers December 10, 2012 Sponsored Projects Training Program1