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Procedure: 8-20

Effective:  July 1, 2001

Owner: Office of Sponsored Programs

Latest Revision:  June 1, 2009

Preparations of Cost Transfers Involving
Sponsored Program Accounts

This Procedure is being revised. Please follow the procedural steps outlined herein, but check back soon for the updated version. Thank you.


Procedure Steps | Scope | Policy | Responsibility | Distribution | Ownership

Scope

This procedure offers guidance for processing cost transfers, which affect Sponsored Program Projects and Awards. Compliance with the following practices will allow for prompt treatment of all requests for cost transfers, involving both expenditures and labor distribution adjustments. For more specific federal guidelines, please refer to OMB Circular A-21: Cost Principles for Educational Institutions, and the National Institutes of Health Grants Policy Statement.

Cost transfers more than 90 days past the transfer date should follow OSP procedure regarding retro approvals, and a request number should be assigned by OSP and included in the expenditure comment field. If the transfer does not include this prior approval number, it will be reversed and/or not released.

Cost transfers involving grant and contract PTA's are reviewed by OSP, and will be reversed and/or not released if they do not follow the guidelines above.

If the cost transfer is reversed and/or not released, OSP will notify the originating department.

Policy [Top]

VIII.C.1 -- Compliance with Sponsor Requirements

See also:
Procedure 8-21 -- Retroactive Cost Transfers for Expenditures
Procedure 8-22 -- Retroactive Labor Distribution Transfers

Responsibility [Top]

Departmental personnel are responsible for preparing and submitting the cost transfer request with the knowledge and approval of the Principal Investigator. Principal Investigators are responsible for reviewing and approving their grant/contract charges and signing off on monthly expenditures.

The Office of Sponsored Programs is responsible for approving or rejecting cost transfer requests, based on the information provided by the departmental personnel.

Distribution [Top]

Department/School Administrator
Fiscal Contact
Award/Project Manager
Assistant Director for Research Accounting and Compliance

Ownership [Top]

The Assistant Vice President for Research Administration is responsible for ensuring that this procedure is necessary, reflects actual practice, and supports University policy. The Director for Research Accounting and Award Management is responsible for ensuring that this procedure is followed.

Procedure Steps

This activity is performed whenever departments prepare cost transfers affecting Sponsored Program Awards ("G" award numbers OR “Z” award numbers).

Cost transfers are to be in accordance with University policy and charges should only be transferred to sponsored program awards if they meet the following criteria:

·        Charges must have been incurred to meet the objectives of the specific sponsored program award.

·        Charges must be allowable under the terms and conditions of the award.

·        Charges must be reasonable.

·        Funds must be available to cover the cost being transferred.

·        The transfer is not to correct a deficit by transferring charges to another sponsored program award. Cost overruns on federal awards must be counted as cost share.

·        The transfers is at the direction of the Principal Investigator.

·        The reason for the transfer is properly documented as detailed below.

PROCEDURE:

I.                 The following rules are for preparing an Oracle cost transfer usage batch.  Failure to follow these steps will likely result in your transfer request being rejected:

A.    Provide a description/explanation justifying the transfer of charges in the expenditure comment field, to include the reason for the cost transfer and why this charge is appropriate for the grant to which it is being moved.  If you need extra space, please attach any supporting documentation or explanation using the Paperclip feature on the cost transfer batch.   If you use the paperclip feature, please note “See Paperclip” in the comment field.

B.    Provide the original reference number in the expenditure comment field, as well as the original expenditure item date (the date the expenditure was incurred) of the original transaction, and the original transferred date(date the expense hit/cleared/posted to your books).

[The IS.FM_Expenditure Detail Discoverer report contains the expenditure item date and the original transferred date in the "Grants Format" tab of that report.]

C.    Watch out for these common errors:

Be sure that the expenditure item date in the body of the Oracle cost transfer screen accurately reflects the date when the charge was incurred on the Award-Project.  Since Oracle will default this date in, be diligent in reviewing this date for accuracy. If necessary, correct the expenditure item date by over-keying the date. This should not be a problem when using the original expenditure item date.

Do not enter any one-sided entries.

Entries must always balance/net to zero. To correct an unbalanced entry, you must reverse the entire cost transfer, not just the out-of-balance lines.

(see Roman Numeral III for an explanation of OSP rejection codes)

II.               Cost Transfer Processing for Internal Service Providers (ISP's):

NOTE: An ISP is an entity that has been officially designated by UVa to conduct business as a service provider with other areas within the University.  An ISP is reimbursed for the service that it offers or products it sells to other areas within UVa, by transferring the appropriate cost of service/product from its PTAO to the PTAO of the department that received the service/product. These types of routine cost transfers should be done on a timely basis, i.e. monthly.  Any service-related expense that is incurred by a department (in providing services to other areas within UVa) prior to having an official designation by UVa as an ISP can not be transferred to other PTAOs as an ISP charge.

A.  The ISP should be crediting its PTAO using an ISP-designated Expenditure Item Type (e.g., Recovery - ISP (Aux), Recovery - ISP (Non-Aux), Revenue - ISP (Aux), etc.)

B. The ISP should debit the PTAO of the department that received the service using a specific Expenditure Item Type that is applicable (e.g., if the service provided was installing replacement computer hardware, the expenditure type on the debit side should be: SVCs - Computer Hardware Maintenance).

C. In the Expenditure Comment field, the description of the service and the month in which service was provided should be noted (e.g., “Installed a replacement modem for a PC in the Microbiology dept in March 2003.”)

D. In the Expenditure Item Date field, the date that you input should be the same as the service date noted in the Expenditure Comment field. NOTE: if the service was provided in March, you can use the last day in March as your Expenditure Item Date.

Please note that if an Expenditure Item Date is not manually input in its corresponding field, then Oracle will select a default date automatically, which will be the date of the cost transfer.  If this occurs, and this date is not the same as the service date noted in the comment field, your cost transfer batch will be rejected.  (see Roman Numeral III for an explanation of OSP rejection codes)

III.             The numerical Reworking Codes which provide information
regarding the reason for OSP’s rejection of a cost transfer request are as follows (these appear in the email you receive from OSP concerning the rejection of your cost transfer request):

  1. When transferring a cost you must include the original reference information and a description/explanation of what you are trying to do in the expenditure comment field.

  2. The Expenditure Item Date in the "Expenditure Comment" Field does not match the date in the "Expenditure Item Date" Field.

  3. When transferring a cost transfer of a cost transfer you must include the original reference information as well as the original Exp Item Date and Transferred Date. You cannot use the information from the previous cost transfer for reference information.

  4. Retroactive cost transfers should follow OSP Policy and a retro request approval number should be included in the expenditure comment field.

  5. Entries should always balance to zero.

  6. You should not enter any one-sided entries.

  7. You should never be changing expenditure types between sides of the transaction.

    • The main exception to this is the Procurement card. In this case make sure you include in the explanation field that you are "redistributing P-card charges to the correct expenditure type." However, please remember to redistribute P-card charges during the period provided by Procurement Services each month.

    • Correcting an error in the original expenditure type is the other reason for changing. However, please include in the comment field "correcting the expenditure type" and why the wrong expenditure type was used.

  8. Never use any of the expenditure types that start with 'Expenditure Credit...' These are only for use by the Cashiers Office when processing expenditure credit deposits.

  9. Never use salary expenditure types. These transfers need to originate in LD.

  10. Cost transfers are not the way to fund or budget another project. This is accomplished with Award/Project linkages and funding of the project.

  11. You cannot transfer charges from your agency 'YY' accounts to your University Award accounts. This would be viewed as an attempt to avoid University procurement regulations. The only exception is when the charge originated in the University system. In this case you must provide reference #, date, and an explanation. This also holds true of transfers from one agency to another such as Medical Center to University Accounts.

  12. Transactions that result from any signed contract between HSF and the Medical Center should be handled completely outside of the Oracle system. All such transactions must be executed through one entity writing a check to the other entity. These checks should derive from the Medical Center Peoplesoft system or the HSF Platinum system. These checks may not be deposited into the Oracle general ledger.

  13. If you are an internal service provider, you need to include the date or time frame (i.e., June, 2001) when the charge was incurred.

  14. Local (LS) and State (SS) sales and service awards should be using the recovery expenditure types on the credit side of the transaction when providing their services or products to other departments.

  15. The "Expenditure Item Date" field should correspond with the period in which the service was provided.

  16. Please correct the expenditure type on the SE award, which should begin with "Eq Capital".

  17. UVA Cost Transfer Naming Convention
    Actuals [A] (SPACE) [email id (IN CAPS)] (SPACE) by the date [ddmmyy] (SPACE) followed by your own 3-digit sequential number [001EXAMPLE: A ACH7H 240401 001

  18. Other-See note by the expenditure batch name for more information.

  19. NON-GRANTS do not allow student payment changes to be made in the Integrated System, they must be done in SIS.

The following link provides guidance in the documentation and processing of Labor Distribution (LD) Adjustments impacting sponsored projects (G and Z awards). Once this new process has stabilized, this guidance will be absorbed into the University’s formal procedures. Questions should be directed to the Director of Compliance and Outreach in the Office of Sponsored Programs, Sharon Brooks.

End of Activity

 

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