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

1. SPTP Sponsored Project Training ProgramUniversity Operating Procedure on Cost TransfersDecember 10, 2012 Sponsored Projects Training Program

2. What we will cover . . . • 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 Sponsored Projects Training Program

3. 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_Transfers_UOP.pdf Sponsored Projects Training Program

4. 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 Sponsored Projects Training Program

5. 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. Sponsored Projects Training Program

6. Definition • Cost transfer is an after-the-fact reallocation of a cost from one University budget to another Sponsored Projects Training Program

7. Examples of Cost Transfers • Retrospective salary redistribution • Journal entries to move costs from one sponsored project to another Sponsored Projects Training Program

8. 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 Sponsored Projects Training Program

9. Steps to Mitigate Cost Transfers • Cost 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 Sponsored Projects Training Program

10. Steps to Mitigate Cost Transfers • Grants 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

11. Advance Accounts (AA) • Formerly called Guaranteed Funding • Develop 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 place • Leave adequate time for processing Sponsored Projects Training Program

12. 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 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 Sponsored Projects Training Program

13. Best Practice Award Management • 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) Sponsored Projects Training Program

14. 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) Sponsored Projects Training Program

15. Best Practice Award Management • Other considerations • Purcard management • Obtain sponsor prior approvals when necessary • Integrate effort planning into unit budgeting Sponsored Projects Training Program

16. 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 Sponsored Projects Training Program

17. Best Practice Award Closeout Closeout 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) Sponsored Projects Training Program

18. Best Practice Award Closeout Closeout 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 Sponsored Projects Training Program

19. Justification and Documentation of Cost Transfers • 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 Sponsored Projects Training Program

20. 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_transfer_form.pdf Sponsored Projects Training Program

21. The form Sponsored Projects Training Program

22. Instructions in the justification form Sponsored Projects Training Program

23. Examples of Extenuating Circumstances • 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 Sponsored Projects Training Program

24. Examples of Extenuating Circumstances • 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 • Untimely cost transfer without extenuating circumstances must be charged to institutional funds Sponsored Projects Training Program

25. Authorization and Approvals • 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) Sponsored Projects Training Program

26. Authorization and Approvals • Central Unit Approval Sponsored Projects Training Program

27. 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 Sponsored Projects Training Program

28. 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 Sponsored Projects Training Program

29. Justification and Documentation of Cost Transfers • Supporting documentation for Payroll Cost Transfers: • Salary distribution revision • Additional pay form revision • Wage revision Sponsored Projects Training Program

30. 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) Sponsored Projects Training Program

31. 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 Sponsored Projects Training Program

32. Cost Transfer Forms Sponsored Projects Training Program

33. 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 dayfrom 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 Sponsored Projects Training Program

34. Payroll Cost Transfer Types – UV_TL_Payable_Detail * Project Business Unit, Description, Start Date and End Date will be added shortly to this output Sponsored Projects Training Program

35. 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 Sponsored Projects Training Program

36. 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! • Job aid forthcoming Sponsored Projects Training Program

37. Additional info for non-salary cost transfers – changes to the MBRs Sponsored Projects Training Program

38. Comparison of old & new processes Current Process New Process Sponsored Projects Training Program

39. 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? Sponsored Projects Training Program

40. 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? Sponsored Projects Training Program

41. 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? Sponsored Projects Training Program

42. Additional resources/training opportunities • December 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 Sponsored Projects Training Program

43. 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 6-3360 • CAS cost transfer website: http://www.uvm.edu/~cntrllrs/cas/?Page=cost_transfer.html&SM=rctmenu.html Sponsored Projects Training Program

44. Questions?? Sponsored Projects Training Program