Sponsored Project Training Program
University Operating Procedure on Cost
Transfers
December 10, 2012
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What we will cover . . .
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Definition of cost transfers
Policy and best practices to avoid cost transfers
Differences between the current and new
processes
Back up documentation requirements
Helpful tools
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Cost Transfers Involving Sponsored
Agreements UOP
Effective January 1, 2013
 Replaces two current policies

◦ Cost Transfers on Grants & Contracts
◦ Sponsored Projects Expense Transfer
 http://www.uvm.edu/~cntrllrs/cas/Cost_Transfe
rs_UOP.pdf
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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
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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.
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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.
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Definition
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Cost transfer is an after-the-fact
reallocation of a cost from one University
budget to another
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Examples of Cost Transfers
Retrospective salary redistribution
 Journal entries to move costs from one
sponsored project to another
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What is not a cost transfer?
Purcard reallocations
 Inter departmental billings (IC journal
entries)
 Set up of distributions in EPM at the time
of budget building
 Recoding of expenses on the same
project
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Steps to Mitigate Cost Transfers
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Cost policy
◦ Direct costs must meet OMB A-21 cost
principles
◦ http://www.uvm.edu/policies/grants/SponAgree_CostPolicy.pdf
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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
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Steps to Mitigate Cost Transfers
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Grants Management Best Practices
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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.ht
ml
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Advance Accounts (AA)
Formerly called Guaranteed Funding
 Develop advance account memo upon notification of
funding from sponsor
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 Collaborative effort between the PI and department administrator
 Allows SPA to create a chartstring in PeopleSoft
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The following must be completed before an AA
chartstring may be set up:
◦ Conflict of interest disclosures
◦ Animal or human subject protocol approvals in place
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Leave adequate time for processing
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Post-Award Best Practice
Award 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 spending
 Personnel 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 chartstring
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Best Practice Award Management
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Key considerations in award management
Perform on a monthly basis:
 Run the Project Monthly Budget Report for all departmental
grants
 Monitor for overdrawn or over encumbered projects
 Review expenses for allowability
 Provide PIs with a copy of the reports
 Review & make changes to departmental suspense
 Review 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)
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Best Practice Award Management
•
Perform on a quarterly basis:
 Run the Closeout Report for all departmental grants
 Ensure 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 months
 Meet with PI to review grant budget status, effort, and upcoming
quarter plans
 Make prospective distribution changes as necessary
 Run Cost Share Summary
• Ensure cost share commitments are met (including third party)
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Best Practice Award Management
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Other considerations
◦ Purcard management
◦ Obtain sponsor prior approvals when
necessary
◦ Integrate effort planning into unit budgeting
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Best Practice Award Closeout
•
SPA will notify departments of grants ending within 90
days on a monthly basis
 Department administrators meet with PIs to discuss:
 Closeout process
 Cost share activities
 Assist with a no cost extension if needed
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Best Practice Award Closeout
Closeout Timeline:
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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)
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Best Practice Award Closeout
Closeout Timeline (cont.):
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20 days after grant ends:
 Run Closeout Report and resolve any remaining issues
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30 days after grant ends:
 Confirm with SPA that grant is ready to close and the final report is ready
to be completed
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Sponsored Project Administration prepares and submits final
financial report to sponsor and soft closes award to prevent
additional transactions from posting
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Justification and Documentation of
Cost Transfers
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Justification 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
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Justification and Documentation of
Cost Transfers
Standard form required for all payroll &
non-payroll cost transfers
 Form is available on the CAS website:
http://www.uvm.edu/~cntrllrs/cas/cost_tr
ansfer_form.pdf
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The form
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Instructions in the justification form
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Examples of Extenuating
Circumstances
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Appropriate:
◦ 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
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Examples of Extenuating
Circumstances
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Inappropriate:
◦ 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 experience
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Untimely cost transfer without
extenuating circumstances must be
charged to institutional funds
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Authorization and Approvals
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Within 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)
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Authorization and Approvals
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Central Unit Approval
≤90 days
Payroll Transfer
Cost Accounting Services (CAS)
Non-Payroll Transfer Sponsored Project Administration (SPA)
>90 days
All transfers with
extenuating
circumstances
Appropriate approval from CAS or SPA
and a Vice President (or designee)
Approval
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Clarification of the 90 days - Payroll
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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
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Clarification of the 90 days – Non-Payroll
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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
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Justification and Documentation of
Cost Transfers
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Supporting documentation for Payroll
Cost Transfers:
 Salary distribution revision
 Additional pay form revision
 Wage revision
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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 Retro@uvm.edu or mail hard copies to
Payroll Services (237 Waterman)
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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 Retro@uvm.edu or hardcopies to Payroll
Services 237 Waterman
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Cost Transfer Forms
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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 Retro@uvm.edu or send hardcopies to Payroll Services 237
Waterman
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Payroll Cost Transfer Types – UV_TL_Payable_Detail
* Project Business Unit, Description, Start Date and End Date will be added
shortly to this output
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Justification and Documentation of
Cost Transfers
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Supporting documentation for NonPayroll Cost Transfers:
◦ Cost transfer request justification form
◦ Monthly Budget Report (MBR)
 Original chartstring, reference numbers, and
accounting date
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Additional info for non-salary cost
transfers
Journal entry attachments
 Ability to add supporting documents to JE
in PeopleSoft
 Effective January 1, 2013, only online
justification/documentation will be
accepted
◦ Please don’t send paper copies!
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Job aid forthcoming
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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 Data can be obtained upto the previous
closed periods
day’s transactions.
Report can be run by fiscal year
No changes, data for multiple periods
within the same fiscal year.
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Comparison of old & new processes
Current Process
New Process
Expense(s) to be transferred
identified and approved by the PI,
department administrator, etc.
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.
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.
Cost Transfer Memo should be filled in; someone other
than the person preparing the form must also approve
it.
Late Cost Transfer Memo is submitted to CAS/SPA if
the original transactions posted more than 90 days ago.
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.
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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?
•
•
•
•
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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?
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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?
•
•
•
•
•
•
•
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Additional resources/training
opportunities
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December 2012
◦ Email communication with:
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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
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Additional resources/training
opportunities
For payroll cost transfer questions, call
Cost Accounting Services at 6-1375
 For non-payroll cost transfer questions,
call your SPA financial administrator at 63360
 CAS cost transfer website:
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http://www.uvm.edu/~cntrllrs/cas/?Page=cost_transfer.html&SM=rctmenu.htm
l
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Questions??
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