University of Vermont

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Cost Transfers FAQs Cost Transfers - Frequently Asked Questions

What is considered a cost transfer?

 

A cost transfer is the assignment of an expense to a sponsored agreement that was initially recorded elsewhere in the University’s general ledger. A cost transfer from a sponsored agreement to a non-sponsored budget is also considered a cost transfer. Examples are a retrospective payroll distribution change or a journal entry which moves an existing non-payroll expense from one sponsored agreements to another sponsored agreement.


What is not considered a cost transfer?


Purcard reallocations, inter-departmental billings (IC journal entries) and recoding of expenses on the same sponsored project are not considered a cost transfer. Examples of recoding of expenses are:

  • A retrospective salary distribution change which maintains the same total % of effort on a sponsored project but changes the fund, source and function chartfields to charge part or all of the effort to a cost share chart string.

  •  A correction to an expense account to properly classify the expense on the same project.

What are the key changes in the new Cost Transfer University Operating Procedure (UOP)?

The Cost transfer UOP includes important business practices to minimize cost transfers,  improve internal controls, improve timeliness and  requires the use of a standardized cost transfer request form for all cost transfer requests involving sponsored agreements.

What business practices are recommended to minimize cost transfers?

Applying the four cost principles in the University's cost policy in assessing whether an expense is appropriate or not on a sponsored agreement, conducting quarterly effort planning sessions to prospectively allocate  payroll correctly the first time, and  using advance accounts to charge appropriate expenses prior to the sponsor funding the sponsored agreement are important business practices to minimize cost transfers. For a comprehensive list of business practices , click here.

May I charge expenses to a current sponsored project and transfer the expenses to a sponsored project when it is set up in PeopleSoft?

No.  A sponsored agreement may not be used as a holding account for expenses that will subsequently be transferred to another sponsored agreement.  All expenses must meet the the costing standards of being allocable, allowable, reasonable, and consistently applied in order to be charged to a sponsored agreement. Business practices such as requesting an Advance Account or temporarily charging the encumbrances/expenses to a department suspense account are appropriate methods.

How is a cost transfer accomplished?

Payroll cost transfers and non-payroll cost transfers have different processes, documentation requirements and a different central unit which reviews/approves these two types of cost transfers. However, the same cost transfer form is required for all cost transfer requests.

  • Non-Payroll Cost Transfers - A journal entry is processed in the PeopleSoft general ledger.  For instructions on how to submit a journal entry, please reference the Journal entry Mini Manual. In addition, all submitted documentation must be attached to the journal. Please reference the journal attachment job aid for instructions on attaching files to journals. Sponsored Project Administration (SPA) is the central unit which reviews/approves non-payroll cost transfers.

  • Payroll Cost Transfers - Retrospective salary distribution changes, retrospective additional payment distribution changes and wage transfers must be processed in PeopleSoft's Human Resources system. Payroll Services is the central unit that processes the cost transfers and Cost Accounting Services (CAS) is the central unit that reviews/approves the appropriateness of the cost transfer requests. Click here for a one page summary of the Payroll cost transfer processes and required documentation.

Why do cost transfers require a justification and supporting documentation?

External auditors view cost transfers involving sponsored agreements as a potential internal controls issue. Cost transfers are  more rigorously challenged by auditors. A justification with adequate documentation which incorporates sufficient internal controls provide a robust framework to meet  the costing standards required by the University's sponsors.

How detailed should the justification be on the cost transfer form?

The justification must include a detailed explanation from which an independent reviewer can understand the transfer request and conclude that the expense is appropriate. A statement that merely states “to correct error” or “to transfer to correct account” is not sufficient.

Where can I find the official cost transfer form?

The official cost transfer form is maintained on the Cost Accounting Services web site. Instructions on how to complete the cost transfer form are attached to the cost transfer form. For salary distribution changes, the cost transfer form is included in the electronic salary distribution program and must be completed as part of the electronic salary distribution submission process. For all other cost transfer requests, the official cost transfer form is required. Cost transfer forms which are not the official cost transfer form will not be accepted.

Why are  two personnel from the cost transfer initiating Unit required to be involved in the cost transfer request?

Federal regulations require that no one person has complete control over the all aspects of a financial transaction.  To comply with this requirement, the preparer of the cost transfer request and the unit person approving the cost transfer request may not be the same person.

When are additional approvals required beyond the two personnel involved in the cost transfer requests? 

The cost transfer form accommodates the following cost transfer approval scenarios at the University.
  • A Dean's office may require approval of cost transfer requests

  • A PI may want to approve cost transfer requests which affect their sponsored agreements

  •  For untimely cost transfer requests, the Cost Transfer UOP requires the PI receiving the expense on their respective sponsored agreement to approve the appropriateness of the cost transfer. 

  • For untimely cost transfer requests, the Cost Transfer UOP requires a Vice-President to approve the extenuating circumstances and the Unit's corrective action plan to prevent future occurrences.

How do I calculate whether a cost transfer request is untimely?

If a unit submits a cost transfer request more than 90 days after the original accounting date of the oldest expense being transferred, the cost transfer is considered untimely. For examples on how to calculate the timeliness of a cost transfer request, click here.

Payroll Cost Transfers

What is an acceptable method to reedit an electronic salary distribution cost transfer request?

The submitted cost transfer information in the electronic salary distribution database must be consistent with the approved documentation. When a change to a submitted salary distribution cost transfer request which has not been approved in the system is appropriate,  the acceptable method to reedit is:

  • Email retro@uvm.edu to obtain the approval to reedit a submitted electronic salary distribution change.
  • Revise the salary distribution/cost transfer page in the electronic salary distribution system
  • Print the revised salary distribution cost transfer request forms and discard previous printer versions

What are unacceptable ways to reedit a retrospective salary distribution cost transfer request?

Any change outside the electronic salary distribution system is unacceptable. The following business practices are not appropriate:

  • Revise a retrospective salary distribution change including the cost transfer tab in the electronic salary distribution system but process an earlier version of the salary distribution/cost transfer information for approval.
  • Alter the salary distribution information including the cost transfer form data on the printed forms of the electronic salary distribution forms.

If an additional pay form (APF) needs a retrospective distribution change, where do I obtain a copy of the original processed APF?

Contact the Payroll Services and request a copy of the original additional pay form. Mark  "revision only" in the appropriate box on the original processed APF form. Revise both the combocodes and the chartstring(s) on the copy. Have the employee sign the revised APF form to ensure the employee agrees with the distribution change in effort.

Why does the original submitted payable time detail need to be submitted for a wage cost transfer?

The hourly time submission process in PeopleSoft's time and labor system allocates someone's time and related wages. When the employee submits and the supervisor approves, the time is certified as reasonable in relation to work performed on sponsored agreements. A wage transfer request involving a sponsored agreement is a re-certification of how the time was allocated. A signature from someone who has first hand knowledge or suitable means of verification is required to certify the reasonableness of the revised allocation of time. Typically, the employee signature is obtained.

How do I obtain payable time detail for a wage earner?

Navigate to PeopleSoft>Human Resources>Reporting Tools>Query>Query Viewer. Run the UV_TL_PAYABLE_TIME_DETAIL query and download the results into excel. Describe what the allocation changes of time and have someone recertify the changes.

What information is requested to identify the revision(s), describe the change request and approve the time changes?

In the excel spreadsheet, the revisions and expected narrative are as follows:

  • Identify how many hours in each day are being revised
  • Provide narrative below the downloaded data which clearly describes the revised time involving sponsored agreements
  • Identify the affected sponsored agreements by project number in the narrative
  • Add language such as " I certify " in the narrative
  • Identify someone who has first hand knowledge or suitable means of verification of the reasonableness of the revised time. Typically, the employee, their respective supervisor or a Principal Investigator would be the person to recertify a wage transfer request.
  • Add the certifier's name and print out the content in the excel spreadsheet.
  • Have the certifier review and certify the printed version of the excel content.
  • Run the uv_pay_ern_dist query and obtain the associated pay for the original submitted hours
  • Email the certified revised time sheet, the associated pay_ern_dist information and the cost transfer form to retro@uvm.edu

Here is an example of how to identify a revision, describe the requested change and approve the change.





Last modified January 07 2013 08:54 AM

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