Cost Transfers
About Cost Transfers
A cost transfer is defined as an after-the-fact re-allocation of a cost (expenditure) from one ASU account to another. These transfers sometimes move costs from or to a sponsored project account, and are thus monitored by the Office for Research and Sponsored Projects Administration. ORSPA monitors sponsored cost transfers pertaining to the salaries of faculty and staff working on a Sponsored Project as well as supplies, equipment, travel, and other expenses.
Cost transfers are requested two different ways. For salary and wage corrections, use the Payroll Redistribution application in PeopleSoft. For non-payroll cost use a Non-Payroll Cost Transfer (CTR) form and attach to a copy of the IX or J1 from the Advantage financial system, which is held in the Suspense file until approved by ORSPA.
Faculty and staff must make every effort to allocate Sponsored Project costs to the appropriate account(s) at the time the costs are initially incurred. However, sometimes it is necessary to transfer costs from one account to another.
Cost transfers involving sponsored projects are allowable only in special circumstances, including:
- Error correction
- Transfers between sub-allocations of the same sponsored project
- Costs benefiting more that one project
- Clearing potential or actual overruns
- Disallowed costs
Any time you initiate a transfer, you invite the assumption that the transaction was not initially handled properly. If expenses are being transferred onto a sponsored project account there will be considerable scrutiny of the reasons for the transfer, and the justification for moving those charges. To adequately support these transfer requests it is essential that you provide justifications explaining how the cost directly benefits the project account being charged.
Issues Related to Cost Transfers
The situations detailed below are often encountered in the administration of sponsored projects. The proper treatment of these situations may avoid the need for cost transfers. Your Research Advancement staff, Sponsored Project Officer, or Sponsored Project Accountant can provide guidance and assistance when these issues arise.
- Pre-award costs. For the effective and economical conduct of a sponsored project it is sometimes necessary for costs to be incurred prior to receipt of the award document and actual funding. In such cases, departments should request the establishment of a pre-award account. See form for requesting an at-risk account or if applicable the University Prior Approval System (UPAS) request form. The early account number will become the permanent account number when the award is effective and no cost transfers will be required. If the anticipated funding is not received, these costs will need to be covered as an institutional expense by the account provided to guarantee the costs.
- Continuation Costs. If a continuation award is anticipated after the end date of the original contract or current contract modification, costs may continue to be charged to the current active account following the processing the same at-risk form or UPAS previously indicated.. If the continuation award is denied, these costs must then be covered as an institutional expense by the account provided to guarantee the costs.
- Cost Accounting Standards. Special care should be taken to ensure that any cost typically considered an indirect cost (overhead) is not initially charged or transferred to a sponsored project as a direct project cost unless it meets the Cost Accounting Standards (CAS) exception and properly approved. See http://www.asu.edu/aad/manuals/rsp/rsp508-01.html
- Close-out of Sponsored Project Account. Principal investigators and departmental administrators overseeing sponsored research accounts should be particularly careful to manage and monitor their expenses to avoid incurring costs that are not reimbursable. Principal investigators and departmental administrators should check the original grant or contract and/or contact their Sponsored Project Officer or Sponsored Project Accountant in ORSPA if they are uncertain about the allowability of a certain expense prior to charging the sponsored account. If unallowable costs have been incurred, they must be removed from the sponsored account and charged to an appropriate departmental account. Generally, costs incurred beyond the project end date are not allowable.
Cost Transfer Policies
Please note that RSP 506-02 disallows cost transfers for payroll which occurred more than 90 days prior, or a shorter timeframe in the case of closeouts and final invoicing of terminated projects.
RSP Policies
RSP 506-02, Cost Transfers on Sponsored Projects
RSP 508-01, Charging Direct and Facilities & Administrative Costs to Sponsored Projects
Federal Regulations
U.S. Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions
Cost Transfer Training
ORSPA Cost Transfers training video.
Payroll Redistributions
You must attend training to be granted the FSO Redistribution role in Peoplesoft.
Courses are offered by Financial Services personnel, and you can register on the ASU Course Catalog Search page. Search for courses titled "Payroll Redistribution" and then click on the "Search" button. Please contact Anne Feuerborn at anne [dot] feuerborn [at] asu [dot] edu for other training options as needed.
Otherwise, go to the ASU Course Catalog Search page, select "ASU Business Operations" and then click on the "Search" button. On the next page, look for courses titled "Payroll Redistribution".
Additional Resources: Commitment Accounting - Accounting for Payroll and Payroll Related Transactions
Non-payroll Cost Transfers
Advantage Transfer Document Course Information
- Courses are offered by Financial Services personnel, and you can register on the ASU Course Catalog Search page. Search for courses titled "Advantage Transfer Documents" and then click on the "Search" button.
- Advantage Transfer Document Training Booklet
Cost Transfer FAQs
1. What is a payroll redistribution?
2. What is the process for a payroll redistribution involving sponsored accounts?
3. How do I get access to data enter payroll redistributions online in PeopleSoft?
4. How do I create a payroll redistribution for fiscal year 2008 and beyond?
5. How do I create a payroll redistribution for fiscal year 2007 and prior?
6. What data should be entered on the form?
7. Where can I obtain the appropriate information for a payroll redistribution?
8. What data should be entered into the 'From' account side of the payroll redistribution form?
9. What data should be entered on the "To" account side of the payroll redistribution form?
10. Is it necessary to transfer the entire transaction amount?
12. Where can I find a listing of authorized account signers if I am unsure?
13. How long does the process take?
15. What if a sponsored project start date falls within a pay period?
16. What if a sponsoerd project end date falls within a pay period?
17. Do I need to answer all three questions on the form?
18. How do I know that my transaction has been approved, processed, and posted to Advantage?
19. What is the 90-day policy and is it enforced?
1. What is a payroll redistribution?
A payroll redistribution transaction is used to change the account number, position number, close date or earnings code type of a payroll expense that has already been posted to Advantage. Amounts transferred can be full or partial pay period amounts and are done based on dollar amount, not hours or percentages.
--Each redistribution entry is for ONE position number, for ONE employee, for ONE close date, and for ONE earnings code. Therefore an employee who had regular time, vacation time, and sick time in one pay period would have three transactions and would require three online payroll redistributions.
2. What is the process for a payroll redistribution involving sponsored accounts?
A payroll redistribution is created online in PeopleSoft by department personnel. If the person who submitted the redistribution is not an authorized signer for the account the expense is being transferred to, then the all account signers for that account are automatically notified via email that one person must approve the transaction.
Once the account signer approval is obtained, the transaction is routed to ORSPA for online approval. ORSPA will review the redistribution for approval, denial or return to the user. Once approved, the transactions interface to Advantage on a nightly basis. ORSPA may return the transaction to the user (prior to approval), to request additional information to their transaction justifications. If denied, then the redistribution will be cancelled and the department will be informed by ORSPA of the next action to take (ex. submission of a modified transaction).
3. How do I get access to enter payroll redistributions online in PeopleSoft?
You must attend training to be granted the ASU_HR_PM Redistribution role in Peoplesoft, also known as the FSO Redistribution role.
Courses are offered by Financial Services personnel, and you can register on the ASU Course Catalog Search page. Search for courses titled "Payroll Redistribution" and then click on the "Search" button. Please contact Anne Feuerborn at anne [dot] feuerborn [at] asu [dot] edu for other training options as needed.
4. How do I create a payroll redistribution for fiscal year 2008 and beyond?
Online payroll redistributions should be submitted through PeopleSoft which can be accessed through myASU.
- Log on to myASU at www.asu.edu/myasu
- Click on the link for HRIS under Human Resources Info/Department
- Logon to Peoplesoft HRIS and follow this menu navigation:
- ASU Customizations
- ASU HCM Custom
- ASU Position Management
- Create Redistribution Entry
Input your search criteria (Fiscal Year Empl ID, ASU Acct, etc…) and click 'Search' to pull up the transaction you want to redistribute.
5. How do I create a payroll redistribution for fiscal year 2007 and prior?
Payrolls posted to Advantage prior to FY2008 were generated from the legacy HRMS system and are not in PeopleSoft. To correct these charges use the ‘Sponsored Payroll Expense Transfer’ form located under the Postaward Administration section at http://researchadmin.asu.edu/forms/. All forms should be submitted to your Grant Contract Accountant for approval and processing.
6. What data should be entered on the payroll redistribution?
For the online redistribution system, data such as the employee ID, account, earn code, and position will be automatically loaded once a transaction is selected, and users can select an amount to redistribute.
7. Where can I obtain the appropriate information for a payroll redistribution?
Payroll expenses may be researched by running the HR Expenditures query in myReports. This query folder contains three queries:
- Query by Salaries, Wages and ERE– (this query will provide you a listing of payroll and employee related expenses for a specific account)
- Query by Salary and Wages – (this query will provide you a listing of payroll expenses for a specified account)
- Query by ERE – (this query will provide you a listing of employee related expenses for a specified account)
Information on using myReports is at http://www.asu.edu/it/eds/welcome.html.
8. What data should be entered into the 'From' account side of the payroll redistribution form?
The fields in the ‘FROM’ side of the redistribution is automatically populated with the appropriate information associated with the pay line you pick.
9. What data should be entered on the "To" account side of the payroll redistribution form?
The ‘To’ side of the form should include the following:
- Position number (modify if applicable)
- Earnings Code (modify if applicable)
- Close Date (modify if applicable)
- Account transferring to (modify if applicable)
- Transaction amount to be transferred (should be equal to or less than the ‘From’ amount (see below)
10. Is it necessary to transfer the entire transaction dollar amount?
No, it is not necessary to transfer the entire transaction amount. You have the option to transfer a portion or the full amount to the new account, earn code, position, or empl ID as needed.
11. Does the department person who submits the payroll redistribution need to be an authorized signer on the account?
No. If the person who submits the payroll redistribution is not an authorized signer on the account the charge is being transferred to, then all authorized signers on the account will be notified via email that the transaction requires approval. However, only one authorized signer will need to review and approve the payroll redistribution.
12. Where can I find a listing of authorized account signers if I am unsure?
A listing of authorized signers can easily be found on the ‘ORG1’ screen in Advantage.
13. How long does the process take?
We anticipate that the process will take no longer than 5 business days to process online, and oftentimes within 2 business days. At year-end there is usually more activity and approvals may take longer than usual.
14. Can I transfer monies to a sponsored account for charges prior to the start date or after the end of a grant?
No, you cannot transfer expense to a sponsored account for charges that were related to an entire pay period prior to the project start date or after the end date of a grant. For example, if a project start date is 8/11/2008, you cannot transfer expense related to payroll for PPE 8/10/2008 and prior. Additionally, if a grant ended on 12/12/2008, you cannot transfer expense related to payroll for PPE 12/28/2008.
If the project start and/or end date is incorrect in Advantage, please contact your Sponsored Projects Officer.
15. What if a sponsored project start date falls within a pay period?
If a sponsored project start date falls within a pay period, you are allowed to transfer only the portion of expense related to the project start date and beyond for that pay period. For example, if a project start date is 8/16/2008 and you want to transfer expense for PPE 8/23/2008, you are only allowed to transfer expense associated with work performed 8/16/2008 through 8/23/2008. You are not allowed to transfer expense associated with work performed prior to 8/16/2008.
If the project start date is incorrect in Advantage, please contact your Sponsored Projects Officer.
16. What if a sponsored project end date falls within a pay period?
If a sponsored project end date falls within a pay period, you are allowed to transfer only the portion of expense related to the project end date and prior for that pay period. For example, if a project end date is 12/20/2008 and you want to transfer expense for PPE 12/28/2008, you are only allowed to transfer expense associated with work performed 12/15/2008 through 12/20/2008. You are not allowed to transfer expense associated with work performed after 12/20/2008.
If the project end date on a sponsored project is incorrect in Advantage, please contact your Sponsored Projects Officer.
17. Do I need to answer all three questions on the form?
Yes, PeopleSoft will require that you enter an answer for each question. Relevant and detailed information will aid in making the approval and entry process quicker and accurate. It is very important that you provide pertinent and comprehensive answers as to provide a proper audit trail. On sponsored projects, federal and other sponsor regulations require written justification on all payroll redistributions that will document:
- Why the error occurred resulting in the need for a transfer
- What corrective action will be taken to avoid the error in the future
- Why the cost transferred is allowable, allocable, and a reasonable charge on the new account, and
- How the charge supports performance of the project scope of work.
Explanations that merely state that the transfer was made “to correct an error” or “to transfer to correct project” are not sufficient to justify new charges on a sponsored project account. Transfers from one sponsored project to another sponsored project to reduce cost overruns, to spend unused balances, to avoid restrictions imposed by law or agreement terms, or for other reasons of convenience are strictly prohibited by sponsors.
18. How do I know that my transaction has been approved by ORSPA and posted to Advantage?
Once a payroll redistribution has been processed, you can view the approval status in PeopleSoft under ASU Position Management/View Redistribution Entries. In the transaction header are Approval Status, ORSPA approval and GL Post dates. Blank date field indicate that an action has not yet occurred. Approval status of “All Approved” indicates the transaction has passed signer and ORSPA approvals, and a GL post date indicates the transaction has been loaded to Advantage.
19. What is the 90-day policy and is it enforced?
Cost transfers related to either salary, wages and related ERE, or non-payroll expenses, when involving sponsored project accounts, must comply with ASU’s Cost Transfers on Sponsored Projects policy found in RSP 506-02 http://www.asu.edu/aad/manuals/rsp/rsp506-02.html. This policy indicates that cost transfers increasing a sponsored project’s expenditures should be requested within 90 days after the month in which the cost was originally accepted in the university’s financial accounting system. No time limit exists for removing inappropriate expenditures from a federally sponsored account. If an inappropriate expenditure is discovered on a federal project it must be removed regardless of a time limit.
A shorter cost transfer request period is necessary near the project end date. Final financial reports are typically due to sponsors 30 to 90 days after the project end date. This requires that all cost transfers must be completed no later than 60 days after the project terminates (unless the final financial report is due in less than 90 days following project termination requiring an earlier fiscal closeout of the project). This earlier cutoff is necessary to promptly charge the project and not delay submission of the financial report. Transfer requests on terminated projects may not be approved and will be reviewed by ORSPA on a case-by-case basis.
Contacts
Cost Transfers (from or to a sponsored project account)
Payroll Redistribution Request
Questions on requesting a payroll cost transfer such as allowability on a project and proper justification may be directed to your Research Advancement staff within the College/Department, your Sponsored Projects Officer, or your Sponsored Project Accountant.
Payroll Redistribution Processing Status
Judy McMullen
Accountant
judith [dot] mcmullen [at] asu [dot] edu
480-727-6584
PeopleSoft-Payroll Redistribution System Assistance
UTO CRM (Customer Relationship Management) Submit case at: http://www.asu.edu/go/support/
Non-Payroll Cost Transfers
Non-Payroll Cost Transfer IX/J1 Request and Status
Questions on requesting a non-payroll cost transfer such as allowability on a project and proper justification may be directed to your Research Advancement staff within the College/Department, your Sponsored Projects Officer, or your Sponsored Project Accountant.
Advantage System Assistance
Advantage Helpline: http://uabf.asu.edu/advantage_training
Phone: (480) 965-2334
Email: AdvantageHelp [at] asu [dot] edu