{"id":11576,"date":"2019-01-09T17:24:31","date_gmt":"2019-01-09T17:24:31","guid":{"rendered":"https:\/\/www.rochester.edu\/adminfinance\/finance\/?page_id=11576"},"modified":"2024-10-09T16:11:12","modified_gmt":"2024-10-09T16:11:12","slug":"cost-transfer-policy-sponsored-programs","status":"publish","type":"page","link":"https:\/\/www.rochester.edu\/adminfinance\/finance\/office-of-research-accounting-and-costing-standards-oracs\/cost-transfer-policy-sponsored-programs\/","title":{"rendered":"Cost Transfer Policy \u2013 Sponsored Programs"},"content":{"rendered":"

I. Date of Initiation\/Revision<\/strong><\/p>\n

Effective December 31, 2008, revised May 31, 2012, revised again October 09, 2024.<\/p>\n

II. Policy Classification<\/strong><\/p>\n

Senior Vice President for Administration and Finance, CFO \u2013 Office of Research Accounting and Costing Standards (ORACS), Finance Department.<\/p>\n

III. Policy Statement<\/strong><\/p>\n

This policy serves as guidance to the University community for cost transfers to\/from sponsored program accounts.\u00a0 It is grounded in federal costing policies promulgated by 2 CFR 200.<\/p>\n

IV. Policy Summary and Definitions<\/strong><\/p>\n

Summary:<\/strong><\/p>\n

This policy provides documentation and reporting guidance to University faculty\/administrative staff involved in cost transfers.\u00a0 Cost transfers should occur infrequently, the expectation is that a well-controlled accounting environment exists in each department which serves to assure that accurate direct charging of costs to ledger accounts occurs on a continuous basis. In certain circumstances, however, costs may need to be moved to\/from a given ledger account.<\/p>\n

This policy is designed to be the basis for reporting requirements of the Finance Department and The Office of Research Accounting and Costing Standards.\u00a0 In the event your department has more restrictive policies, those policies must be adhered to.<\/p>\n

Definitions:<\/strong><\/p>\n

Cost Transfer:\u00a0 A direct cost charged to one account (FAO) and subsequently transferred to another account (FAO). The subject matter of the cost transfer may be either a salary or a non-salary expense.<\/p>\n

2 CFR 200 Subpart E: The Federal regulation that defines\/prohibits all expenses charged to sponsored programs.\u00a0 To comply with the cost allowability and allocability requirements of 2 CFR 200, it is necessary to explain transfers of costs to or from federal awards. Accordingly, timeliness and completeness of explanations are required elements of such requests.\u00a0 Compliance with 2 CFR 200 serves as the foundation for this policy and standards set forth in this document should be applied to all cost transfers to\/from all sponsored program accounts, regardless of Sponsor.\u00a0 This approach provides for a consistent submission and review process across the University community.<\/p>\n

V. Related Policies<\/strong><\/p>\n

Refer to the University\u2019s \u201cOffice of Research Accounting and Costing Standards\u201d web page, listed under the \u201cORACS Policies and Procedures\u201d link:\u00a0 Unallowable Costs for Federal Reimbursement<\/strong><\/p>\n

VI. Responsibilities<\/strong><\/p>\n

Faculty\/Department Administrator:\u00a0 The faculty\/department administrator shall maintain adequate records for audit and accounting purposes to support the use of sponsored research funds.\u00a0 Prepare and submit the journal entries into the University\u2019s accounting system.\u00a0 Late and poorly explained cost transfers may result in audit questions regarding the propriety of the transfers. Frequent cost transfers may result in audit questions regarding the reliability of the University\u2019s accounting system and internal control environment. Because of these risks, departments should proactively minimize the need for cost transfers.<\/p>\n

ORACS:\u00a0 Personnel review the cost transfers to assure adherence to the stated criteria, and make any adjustments to the previously submitted FFR in the event Cost Transfers remove recorded expenses.\u00a0 ORACS does NOT revise FFR\u2019s once submitted\u00a0for incremental expenses. \u00a0ORACS personnel are available to assist in the interpretation and implementation of this policy, including prior review of explanations for requested cost transfers.<\/p>\n

Finance Department: The Finance Department is responsible for the accurate reporting of the financial statements of the University and to provide assurance that the policies and procedures of the University support the necessary internal controls to assure those financials are not materially misstated.\u00a0 Frequent cost transfers may result in audit inquiry regarding the reliability of the University\u2019s accounting system and internal control environment, therefore any requested cost transfers must be carefully monitored.<\/p>\n

VII.\u00a0\u00a0\u00a0\u00a0 Cost Transfer Criteria<\/strong><\/p>\n

For a cost transfer to be acceptable, it must meet the following criteria:<\/p>\n

Costs should be transferred as soon as the error is discovered but normally not later than 90 days following the month-end that the original posting of the cost occurs.\u00a0 In the case of a terminating account, cost transfers must be submitted no later than 60 days after the end date of the award.<\/p>\n

If an expense is transferred to a sponsored program account, the cost must be allowable under sponsor and University policies, and it must be allocable, necessary and reasonable.<\/p>\n

A full explanation and justification should be provided for the transfer of costs. Merely stating that the transfer is needed to \u201ccorrect an error\u201d or \u201cto transfer the expense to the correct project\u201d is unacceptable pursuant to the federal guidelines. The Non-Salary Cost Transfer Request Form and either the HRMS Form 800 (prior to myURHR implementation) or the myURHR Payroll Accounting Adjustment (effective after myURHR implementation) assist with consistent documentation of these criteria.<\/p>\n

Cost transfers involving sponsored funds cannot be made to spend an otherwise unexpended balance on a sponsored program account.<\/p>\n

When a cost transfer involves ledger accounts between different departments, the transfer will need authorization from both.<\/p>\n

For a non-salary cost transfer, department A (who has been charged erroneously) may obtain email approval from department B (to whom the charge belongs).\u00a0 This will allow department A to initiate the cost transfer in the interest of expediting the correction.\u00a0 The email approval from department B should include wording that confirms the charge is theirs and provides the information needed to process the correction.\u00a0 This email should be included in the supporting documentation for the cost transfer.<\/p>\n

For salary cost transfers, HRMS (prior to myURHR implementation) or myURHR (effective after myURHR implementation) system\u2019s security prevents department A from initiating an 800 Form (prior to myURHR implementation) or a Payroll Accounting Adjustment (effective after myURHR implementation) for personnel that reside in department B.\u00a0 Accordingly, these types of cost transfers must be initiated by department B.<\/p>\n

In both cases, department B should make every effort to respond to department A in a timely manner.\u00a0 This is particularly important in the case where the close-out of a sponsored program account is pending.<\/p>\n

Costs will not be transferred multiple times.<\/p>\n

Absences of PI or responsible administrator, and shortage or lack of experience of staff are not acceptable reasons for cost transfers.\u00a0 It is the responsibility of the department and the PI to ensure the availability of qualified staff to administer and exercise stewardship over sponsored programs.<\/p>\n

VIII. Cost Transfer Checklist<\/strong><\/p>\n

To determine whether the cost transfer is appropriate, the following considerations are important:<\/p>\n

Is the expense allowable under the specific award, 2 CFR 200 and University policy?<\/p>\n

Did the transferred expense directly benefit the sponsored program?<\/p>\n

Are there any restrictions (general or specific) that preclude the transfer?<\/p>\n

Does the sponsor require notification if the expense was not budgeted?<\/p>\n

Does the request include adequate detail of the specific costs to be transferred? Completing required fields in the Non-Salary Cost Transfer Request Form and either the HRMS Form 800 (prior to myURHR implementation) or myURHR Payroll Accounting Adjustment (effective after myURHR implementation) will provide adequate detail.<\/p>\n

Is the request adequately justified?<\/p>\n

IX. Cost Transfer Procedure<\/strong><\/p>\n

Non-Salary Cost Transfers:<\/p>\n

Non-salary costs will be transferred when the Non-Salary Cost Transfer Request Form, along with copies of the ledger(s) to support the cost(s) to be transferred, are completed by the department and submitted in the financial system for review and approval. The request must be made by a responsible official. A responsible official is a person who can make the correct determination of allocability, allowability, and reasonableness of the costs, and provide a sufficient justification for the transfer being requested.<\/p>\n

Salary Cost Transfers:<\/strong><\/p>\n

Prior to 12\/16\/2024:\u00a0 If the costs to be transferred are salary expenses, the HRMS Form 800 must be completed.\u00a0 If the beginning date of the pay period being adjusted is less than 18 months before the submission date of the form, submit the Form 800 to the Payroll Department for review and approval.\u00a0 Two responsible officials must sign the Form 800.<\/p>\n

Effective 12\/16\/2024: If the costs to be transferred are salary expenses, the myURHR Payroll Accounting Adjustment must be completed.\u00a0 Two responsible officials must approve the myURHR Payroll Accounting Adjustment.<\/p>\n

The first responsible official is a person who can make the correct determination of allocability, allowability, and reasonableness of the costs and provide a sufficient justification for the transfer being requested. The second responsible official must be at a higher organizational level than the person requesting the change in salary distribution, consistent with the \u201cone-over-one\u201d authorization policy.<\/p>\n

An important differentiation is needed regarding using a Form 800 (prior to 12\/16\/2024) or myURHR Payroll Accounting Adjustment (effective 12\/16\/2024) and closing out an account with a deficit via a closing journal..\u00a0 If the payroll is unallowable, it needs to be removed from the account via a Form 800 (prior to 12\/16\/2024) or myURHR Payroll Accounting Adjustment (effective 12\/16\/2024).\u00a0 If the work was performed during the grant period, as recorded, and the research project was simply overspent, then the closing entry will be utilized via the closing journal process currently in use.<\/p>\n

Prior to 12\/16\/2024:\u00a0 <\/strong>If the beginning of the pay period being adjusted, via the Form 800, is greater than 18 months from the date of submission, a Cost Transfer Form needs to be completed and attached to the Form 800 and a signature from the Department Chair\/Chief must be obtained.\u00a0 This Cost Transfer Form (supported by the Form 800) must be sent to ORACS in the event a Grant FAO is affected and the Salary Adjustment entry is created, otherwise sent to General Accounting. Once approved, the payroll entry will then be recorded and HRMS will not be adjusted.\u00a0 Transactions of this nature should be rare and unusual and should not be an additional payroll charge to a Sponsored Award.<\/p>\n

All Transfers:<\/strong><\/p>\n

Regardless of the type of cost transfer, it is imperative that Department\u2019s perform timely reviews and reconciliations of their assigned accounts.\u00a0 This will ensure that the transfers are recorded both timely and accurately.<\/p>\n

See the associated FAQ\u2019s, should you need further clarification please contact ORACS with any questions regarding this policy.<\/p>\n

10\/09\/24<\/p>\n","protected":false},"excerpt":{"rendered":"

I. Date of Initiation\/Revision Effective December 31, 2008, revised May 31, 2012, revised again October 09, 2024. II. Policy Classification Senior Vice President for Administration and Finance, CFO \u2013 Office of Research Accounting and Costing Standards (ORACS), Finance Department. III. … Continued<\/a><\/p>\n","protected":false},"author":16,"featured_media":0,"parent":11446,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-11576","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/pages\/11576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/comments?post=11576"}],"version-history":[{"count":2,"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/pages\/11576\/revisions"}],"predecessor-version":[{"id":35012,"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/pages\/11576\/revisions\/35012"}],"up":[{"embeddable":true,"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/pages\/11446"}],"wp:attachment":[{"href":"https:\/\/www.rochester.edu\/adminfinance\/finance\/wp-json\/wp\/v2\/media?parent=11576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}