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Cost Transfers

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08/17/2017 - 1:59pm

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 Request (CTR) ORSPA 510 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 than one project
  • Clearing potential or actual overruns
  • Disallowed costs

Any time a transfer is initiated, 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 to provide justifications explaining how the cost directly benefits the project account being charged.

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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. Research Advancement staff or the assigned Grant and Contract Officer can provide guidance and assistance when these issues arise.

  1. 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, units should request the establishment of an at-risk account. Complete and submit the ORSPA Action Form (OAF). 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.
  2. 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 of an at-risk request on the OAF. If the continuation award is denied, these costs must then be covered as an institutional expense by the account provided to guarantee the costs.
  3. Cost Accounting Standards. Special care should be taken to ensure that any cost typically considered a facilities and administrative cost (F&A) 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 is properly documented. See RSP 508-01. Units are no longer required to obtain ORSPA approval but are required to maintain a justification and associated backup documents.
  4. Close-out of Sponsored Project Account. Principal investigators and unit administrators overseeing sponsored project accounts should be particularly careful to manage and monitor account expenses to avoid incurring costs that are not reimbursable. Principal investigators and unit administrators should check the award terns and conditions.  If there is uncertainty about the allowability of an expense, the unit should contact the assigned AMT GCO 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 unit account. Generally, costs incurred beyond the project end date are not allowable.

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Non-Payroll Cost Transfers - Tips

Non-payroll cost transfer requests are generally composed of three items:

  1. A copy of the IX/J1

  • J1s are a recommended option as expense transfers involving different object codes can be placed on one J1 vs. multiple IXs.

  • If transferring more than nine expenses, an IX/J1 is not needed – the assigned AMT GCO can take care of it for the unit.

    2.  The non-payroll cost transfer form

  • As long as the FROM account is one account and the expenses are going TO only one account, all of the expense detail can be placed on one CTR form. Feel free to add additional lines as needed.

    3.  A 611E showing the original expense

  • Copies of the original receipts are NOT REQUIRED. Though, periodically, a GCO may request to see some additional documentation in order to complete a particularly challenging review.

The standard expectation is that the PDF packet should stand on its own and that the justifications are clear enough to allow for review and approval. The unit/Financial Services, as appropriate, are required to retain the support documentation for the original expense in the event of an audit.

The above can be created electronically and put together into one PDF package.
 

Justifications:

Justifications must be clear and concise. A descriptive phrase or two can suffice if it adequately answers the questions. Some examples of weak/poor justifications are:

  • I am moving this charge to place it on the correct account

  • There is no error
     

Submission:

E-mail the CTR packet to Awards [dot] Management [at] asu [dot] edu. Signer approval of the packet can also be sent via email, making this a 100% paperless process. A SharePoint task will then be setup and assigned to the appropriate AMT GCO for processing.
 

Determining the 90-day window:

  • The standard 90-day window is calculated by counting 90 days from the Advantage Financial Close of the month in which the expense posted.
  • Requests for cost transfers have to be received by the assigned AMT GCO within the 90-day window, allowing for corrections as needed.
     

For additional video guidance, feel free to watch Post-Award Management Series: Session 3 - Cost Transfers.

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Cost Transfer Policies

Please note that RSP 506-02 disallows cost transfers 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

2 CFR Part 200 (Uniform Guidance), Subpart E - Cost Principles

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Cost Transfer Training

Payroll Redistributions

Training is required prior to being granted the FSO Redistribution role in PeopleSoft.

Courses are offered by Financial Services personnel. Go to the ASU Course Catalog Search page. Search for courses titled "Payroll Redistribution" and then click on the "Search" button.

Courses may also be found by going 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

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Cost Transfer FAQs

1. What is the difference between an IX and J1 document?

An IX document is an expense transfer input form in Advantage that is used to transfer expenditures from one account to another.  It is permitted on sponsored and non-sponsored accounts and between campuses. An IX is limited to transferring from one object code/sub-object code on a single account to multiple accounts and multiple object/sub-object codes.

A J1 document is a journal voucher input form in Advantage that can be used to transfer multiple accounting items, including revenues and expenditures, from/to multiple accounts.  It is a more versatile document that can transfer multiple object/sub-object code expenditures on multiple accounts to multiple object/sub-object codes on multiple accounts.

Financial Services provides a helpful instruction guide.

2. What is a payroll redistribution?

A payroll redistribution is used to correct an inaccuracy in payroll accounting. These are also known as cost transfers (specific to payroll).

Payroll redistributions may be used to correct the account number, position number, close date or earnings code type of a payroll expense.  Payroll Redistributions are often the result of monthly account reconciliations.

3. How often should payroll be reconciled to determine if redistributions are needed?

Per policy FIN 203, account reconciliation is expected to take place on a monthly basis, to ensure timely correction of any accounting mistakes.

4. How should payroll expenses be reconciled?

Payroll expenses may be reviewed and verified by running the HR Expenditures query in MyReports.  These reports should be accessed on a monthly basis to determine that pay amounts and accounting sources are correct for the unit's employees. Any corrections (payroll redistributions) must be made in a timely fashion.

In the Human Resource folder, there are two canned query options called HR Expenditures by Account or HR Expenditures by Employee.  Both queries offer three query options:

  • Query by Salaries, Wages and ERE– (this query will provide a listing of payroll and employee related expenses for a specific account)
  • Query by Salary and Wages – (this query will provide a listing of payroll expenses for a specified account)
  • Query by ERE – (this query will provide a listing of employee related expenses for a specified account)

Information on using MyReports is at http://www.asu.edu/it/eds/welcome.html.

5. 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.  This policy states that transferring costs onto a sponsored project must 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 sponsored account. If an inappropriate expenditure is discovered on a sponsored 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/AMT on a case-by-case basis.

The assigned AMT GCO will be able to answer questions relating to a project end date and/or final invoice/report submission required by the project.

6. How is access gained to enter payroll redistributions online in PeopleSoft?

Payroll redistributions are expected to be handled by each unit, and are to be entered in our payroll system of record, PeopleSoft.

Training is required 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. Register  is through the ASU Course Catalog Search page. Search for courses titled "Payroll Redistribution" and then click on the "Search" button.

7.  Does the submitter of the payroll redistribution need to be an account signer?

No. However, account signer approval is required when payroll moves on to a sponsored account. 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. Only one authorized signer approval is required to process the payroll redistribution. An employee is not permitted to submit and approve their own payroll redistribution. An additional submitter or account signer is required in this case.

8. What needs to be checked before submitting a transaction?

If transferring on to a sponsored project, make sure:

  • The project is still open and the sponsor has not received the final invoice. The assigned AMT GCO can advise the status of the final billing, if need be.
  • The account is not in deficit and there is available budget for the transactions moving onto the account. If additional funding is expected but the award notice has not yet arrived, please consider an At-risk increase using a guarantee account.
  • There is confirmation that the person performed work on the project. This information must be included in the justifications.

9. How is a payroll redistribution done in PeopleSoft?

Payroll redistributions should be submitted through PeopleSoft which can be accessed through MyASU.

  • Log on to MyASU at www.asu.edu/myasu
  • In the Left hand menu labeled Quick links, click HRSA (PeopleSoft). This will open a new window to the PeopleSoft logon screen.
  • 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 to be redistributed.

10. What are the steps to completing the payroll redistribution?

  • Once a transaction to redistribute is selected, a data entry screen for the “From” side of the transaction will appear:
    • Enter answers to ALL of the three questions.
      • Not applicable, N/A, and none are not appropriate answers.
      • It is very important to provide pertinent and comprehensive answers as to provide a proper audit trail.
      • Relevant and detailed information will aid in making the approval and entry process quicker and accurate.
    • Enter the dollar amount to be transferred.
      • It is not necessary to transfer the entire transaction amount.
      • The amount entered can be equal to or less than the original transaction.
    • Click the Continue button to move to the next screen.
  • Enter information for the “To” side of the transaction.
    • Input boxes are provided with defaults which mirror the original transaction. Any of the following  may be changed: Position, Earn Code, Close Date, and Account.
    • Input the dollar amount for this transaction in the Redist Amt box.
    • If redistributing to more than one set of codes, click the plus sign at the right-hand side of the line to add a line.
    • Click save when all of the “To” criteria are entered. The Redist amount must net zero before the transaction can be submitted. For instance, if redistributing $500, your offsetting entries must equal -$500.

11. Must all three questions on the form be answered?

Yes. PeopleSoft requires that an answer for each question be entered.  The answer of “not applicable” or “none” is not acceptable when the transaction involves sponsored projects.  Input of N/A or none will result in the transaction being returned for editing.

Relevant and detailed information will aid in making the approval and entry process quicker and more accurate.  It is very important to give pertinent and comprehensive answers so 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:

  1. Reason why payroll expenses are being transferred.
  2. What corrective action will be taken to avoid this type of error in the future?
  3. Describe why all the costs transferred to new accounts are allowable, allocable, and reasonable charges. Additionally if a sponsored account, describe why costs are appropriate and necessary to performance for the sponsored project.

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. Please do not use the same response for all three questions. The responses should be relevant to the question to which you are responding.

12. What transpires between submission and General Ledger posting?

For transactions transferring on to a sponsored account, the transaction requires account signer approval. If the submitter is an account signer, the transaction skips to ORSPA approval. If the submitter is not the account signer, the transaction will queue for Account Signer Approval, and all Signers will be emailed. Only one signer is required to approve.

Next ORSPA reviews the transaction. ORSPA may return the transaction if the answers to the questions require more detail. Also, if an account is closed or in deficit, there is potential the transaction can be canceled and the unit notified.

Once the transaction is ORSPA approved, it will be loaded to Advantage the next time the GL posting is run. The GL posting should occur within a day or two.

13. Where can I find a listing of authorized account signers be found?

A listing of authorized signers can easily be found on the ‘ORG1’ screen in Advantage.

14. How long does the process take overall?

The process is usually completed within 2-3 business days. This is dependent upon several factors however, having the form properly completed, submitted timely, with appropriate signer's signatures can help expedite the process. At fiscal year-end, there is more activity and approvals may take longer than usual.

15. Is there a way to tell when a transaction has been approved by ORSPA and posted to Advantage?

Once a payroll redistribution has been processed, the approval status can be viewed in PeopleSoft under ASU Position Management/View Redistribution Entries. In the transaction header are Approval Status, Signer approval, ORSPA approval, and GL post dates. A blank date field indicates 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.

16. How can a transaction that has been rejected be edited?

Once a transaction has been submitted, the only information that can be edited are the responses to the three questions. If the accounting information needs to be changed, withdraw the submitted transaction(s) and resubmit new transaction(s).

To edit responses to the questions:

  • Use the “Edit/Resubmit Redist Trans” in ASU Position Management to search the transaction.
  • Edit the responses. Relevant and detailed information will aid in making the approval and entry process quicker and more accurate.  It is very important to give pertinent and comprehensive answers as to provide a proper audit trail.
  • Submit the transaction again.

17. How do I withdraw a transaction I have submitted?

Provided the transaction has not been ORSPA approved, you are able to withdraw your transaction as follows:

In PeopleSoft, navigate to the ASU Customizations/ASU HCM Custom/ASU Position Management/ Edit/resubmit Redist Trans. Call up the transaction and click the Withdraw button at the bottom of the screen.

18. Where can Payroll Redistributions be viewed?

Anyone with MyReports HR access can query payroll data for redistributions. In MyReports, redistributions are indicated by Source code of “RD”, and there is a column listing the transaction number. All transactions in MyReports have been posted to the GL.

In PeopleSoft, those with the FSO Redistribution, HCM Dept Financial Mgr, HCM Dept Position Mgr, and HCM Position view roles can see the screen View Redistribution Entries under the navigation: ASU Customizations/ASU HCM Custom/ASU Position Management/View Redistribution Entries. View Redistribution Entries allows viewing of positions within your PeopleSoft unit access. Also, entries that have not posted to the GL yet are pending can be viewed. Only transactions with a date listed in GL Post Date have been fully processed.

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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 the unit's Research Advancement staff, or to the assigned Grant & Contract Officer (GCO). Contacts for the unit can be found by using Who Can Help Me?.

Payroll Redistribution Helpline

(480) 727-2584

Payroll Redistribution Mailbox

PayrollRD-q [at] asu [dot] edu

PeopleSoft-Payroll Redistribution System Assistance

UTO CRM (Customer Relationship Management). Submit case at: https://uto.asu.edu

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 the unit's Research Advancement staff, or to the assigned Grant & Contract Officer (GCO). Contacts for the unit can be found by using Who Can Help Me?.

Advantage System Assistance

Advantage Helpline: http://uabf.asu.edu/advantage_training
Phone: (480) 965-2334
Email: AdvantageHelp [at] asu [dot] edu

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