Pulling It All Together
Research Administrators Training Series
Cost Transfers
Cost Transfers “About the 90 days”
Why is the time period 90 days?
- Ninety (90) days has emerged as the standard used by government and business auditors to determine whether costs are reasonably assigned to their proper project and function. It is a standard established in federal circulars and grant policy.
- Standard practice should be to post costs to the most appropriate project/grant. However, subsequent adjustments may be necessary, for example to account for unseen shifts of personnel between closely related sponsored projects, or to correct errors. These actions are reasonable if transferred within 90 days
Cost Transfers “About the 90 days”
How do you calculate the 90 day period?
- The 90 days begins at the end of the accounting month that the original transaction is posted in BANNER.
- For example, if a travel expense charge is posted 9/12, the accounting date would be 9/30. Transfers completed and signed by 12/31 would fall within the 90 day period. Transfers completed and signed after that date would be considered late cost transfers.
Cost Transfers & Effort Reports
Can I wait until our department completes its effort reports before submitting salary transfers?
- Generally not. The intended use of effort reports is not as a check of where salary charges are made. Salary distributions should be reviewed on a regular basis so the effort reports are a reasonable reflection of the employee’s paid effort when first generated. There may be situations where changes are needed to the effort reported and the corresponding salary transfer is needed. The transfer may be appropriate, but because it is beyond 90 days the transfer would also need to meet the extenuating circumstances.
Cost Transfers Prior to Award
How should research expenditures for project work be recorded before a sponsored project is established?
- SPA can assist in establishing an Not-fully Executed (NFE) Account. It is not appropriate to use a generic discretionary account and move expenses to the funded award beyond 90 days.
Cost Transfers & Justification
Are generic statements such as “transfer to appropriate funding source” and “to reflect additional efforts” sufficient justification for transfers less than 90 days?
- Generic statements are not generally acceptable on extramural support cost transfers. For all charges on a project, you should be able to explain the allowability of those costs. As general guidance, acceptable justifications should be able to address the following:
Cost Transfers & Justification
- An explanation as to why the expense was originally charged to the account from which it is now being transferred.
- An explanation as to why the charge needs to be transferred to the proposed receiving project.
- An explanation as to why the charge is allowable and allocable based on the terms and the conditions of the receiving award. For cost transfers after 90 days of the accounting date, the justification must include the items above as well as two additional items:
- Why the cost is being transferred more than 90 days after the accounting date.
- What corrective action has been taken to eliminate the need for cost transfers of this type in the future at the departmental level.
Cost Transfers & Justification
May I use a cost transfer to “spend down” an account that is nearing its end date?
- If the cost transfer does not meet the standards for allowability, allocability and reasonableness, it will not be approved.
Cost Transfers & Justification
There is a staffing shortage in our department and I am doing payroll, department administration, grant accounting, etc. Many times my transfers are past 90 days. Will they be approved?
- Staff shortages or lack of staff experience are unallowable circumstances for late cost transfers.
- Auditors typically view this explanation as a sign that the department does not provide adequate monitoring or maintain sufficient internal control over the use of extramural funds.
Record Retention
Record Retention – Federal Regulation
- Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency.” Example if UNH is awarded a five year federal grant, all records must be retained for 8 years.
Record Retention – Exceptions
- If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved and final action taken.
- Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition.
- When records are transferred to or maintained by the Federal awarding agency, the 3-year retention requirement is not applicable to the recipient.
Record Retention – Uniform Guidance
- Recognizes the shift from paper to electronic methods of storage.
- Encourages the use of electronic formats whenever practicable.
- When original records are electronic and non-alterable, there is no need to create and retain paper copies.
Record Retention – Uniform Guidance
- Similarly, when original records are paper (e.g. receipts), electronic versions (e.g. pdf scans) may be substituted provided they remain readable, are subject to periodic quality control reviews and are reasonably safeguarded against being altered.
- Note that there are inconsistencies between the UG and the Federal Acquisition Regulation (FAR). Federal contracts follow the FAR, plus UG for cost principles only. Under the FAR, paper records related to contracts must be kept for a year after they are converted to an electronic format.
SPA Billing Process
Generating Bills to Sponsors – Basic Steps in AFC/SPA
- Grant Billing Information window on the Grant Maintenance Form (FRAGRNT)
- Billing Frequency and bill format code on the Grant Events Assignment Form (FRAEVGA) updated
- Billed AR Account Code in FRMFUND updated
- Research Accounting Billing Process (FRRBILL) in Audit mode when ready to prepare an invoice. Review then if okay run in Update mode
- Invoice output to server Louise – may need to be modified
- Invoices are submitted to sponsors – often via an e-mail attachment
- Invoices are saved in a paper billing folder which is archived in the paper award files
Generating Bills – Non LOC Grants
- Review the UNH 91201 unbilled report for cost reimbursable grants for unbilled receivables.
- Billing frequency and submission process is identified in the award agreement, e.g. common frequency is no more often than monthly and no less often than quarterly
- Review budget controls, IDC, cost sharing, and financial compliance with Federal regulations and/or sponsor terms and conditions
Generating Bills – FRRBILL Processing
- Manual process
- Creates a billed receivable and reduces the unbilled receivable
- Debit 112107 Grants Billed AR non-LOC
- Credit 112101 Grants Unbilled AR non-LOC
Cost Sharing
Cost Sharing – Employee Volunteer Time
- The cost shared value of volunteer time documented by UNH PD’s should be consistent with what UNH pays for similar work. When the required skills have no comparator within UNH, rates must be consistent with those paid for similar work in the New Hampshire labor market and can be estimated using resources such as Independent Sector.
Cost Sharing – Employee Volunteer Time
- The cost share recognized from volunteer time will be recorded in a separate fund (16C…) setup with the award with costs entered as a debit (expense) and credit (offset) in the following accounts:
- 71CSXS Memo cost share debit
- 71CS99 Memo cost share support offset credit
Cost Sharing – Employee Volunteer Time
- USNH Personnel Policy
6.4.5 Volunteers. Persons in each USNH institution’s community and members of the University System community may volunteer their service to an institution. Status and adjunct faculty and staff members' volunteer work must be different than the work for which they are compensated by USNH. As volunteers they normally will not receive any direct or indirect compensation and must comply with all USNH policies.
Closeout Procedures
Close-out
What is an Award Closeout?
- The award closeout is the final phase of an award process, with culmination of the project activity and finalizing posting of all expenditures to the award; submission to the sponsor of the final invoice; final financial, technical, and other non-financial reporting as required by the sponsor terms, award conditions, and applicable federal regulations. Ensure compliance with agreement.
- Final UNH award closure is the final close of the award in the Banner Financial System and sponsor requirements satisfied
Close-Out
Who is Responsible for the Award Closeout?
- The award closeout process involves the Principal Investigator (PI), Business Services Center, project business manager, the SPA Accounting and Financial Compliance group, the VPFA office (equipment), and other administrative offices as appropriate, depending on the nature of the award.
Close-Out Status Definitions
- Work Flow Status 1 – Grant has hit the end date and enters closing status. Closing activity is at BSC level Encumbrances are clear, Cost share met, Program income okay, Jobs cleared, Expenditures are final
Close-Out Status Definitions
- Workflow Status 3 - Grant enters the SPA queue in workflow
- Status 5 - Grant is with FRA in AFC/SPA for final review and billing/reporting
- Status 7 - Grant has gone through final billing/reporting process; following up with non-financial reports
10 Step - Closeout Process in SPA
Close-Out Status Definitions
- Status F - Grant is "financially closed" (all reports submitted except for final tech)There are some outstanding non-financial reports or background checks. Final payment has been received; funds are inactivated
- Status C - Grant is completely closed - financially and non-financially
- Status 0 – Grant pending extension
Close-Out Considerations – UG
- Some Federal agencies are moving to a 120 financial closeout for new awards subject to Uniform Guidance regulations HOWEVER most existing awards and some new awards still have 90 day closeout periods.
- Federal agencies are enforcing the closeout period and will not process payments after the end of the closeout period creating a financial risk to the UNH.
Uniform Guidance Work Group on Closeout
- Several related issues:
- Research supplies inventory greater than $5000 at end
- Effort is reasonable in relationship to labor costs
- Printing & publication costs may be allowable after end date during the closeout period
Decision Making – Shades of Gray
Decision Making – Shades of Gray
Foundation of Sponsored Project Administration always comes back to:
- Allowability: Allowable and unallowable costs are defined in OMB CircularA-21, the Uniform Guidance AND in the terms of specific awards.
- Allocability: Only those expenses that BENEFIT a project may be charged to that project.
- Reasonableness: Costs must reflect what a “prudent person” would pay. - Reasonable and necessary.
- Consistency: Costs must be handled consistently with established University policies and practices. Consistent with sponsor or donor expenditure restrictions
Decision Making – Shades of Gray
- Understand the Sponsor Terms & Conditions, overarching circular/UG and University policies
- For example, if a sponsor specifies that international travel costs cannot be charged to a particular project, then those costs may NOT be charged to that project, even though it may be allowable under UNH and federal regulation.
Decision Making – Shades of Gray
- Gather information
- Ask drill down questions (what is it that the individual is trying to accomplish)
- Contact SPA for guidance
- Document reason for final decision
What Would You Do?
A Senior Research Associate is doing field work in Brazil, she would like to purchase Rosetta Stone to learn Portuguese and would like to use grant funds to pay for the item. The software will be used to help the investigator communicate with individuals in Brazil while she's conducting her research.
What Would You Do?
An important faculty member is retiring from 45 years of service to UNH. A party is given in his honor.
What Would You Do?
A PI is presenting his findings at a conference in San Francisco. He gets a call from home. His child is sick. He uses his P-card and pays the $250 fee to change his ticket so he can take an earlier flight home.
What Would You Do?
A PI submits a request to purchase software on the last day of a project.
What Would You Do?
A PI is having a meeting on campus with collaborators and asks you to order lunch for the attendees.
THIS IS JEOPARDY
Thank you.
Questions?
Next Session:
When: April 16th
Where: MUB - Squamscott Room
When: 12:00-1:30pm
What: Luncheon
Knowledgeable research administrators are essential to the management of the research enterprise and play a critical role in research administration at the University.
