Cost Transfer Best Practices - Justifications and Consequences


Overview


This article details the beast practices around Cost Transfers. Cost transfers may be used to correct errors, record a change in how items were used, distribute costs charged to the Department but allocated to specific Projects, and also clear a deficit on an Award by moving charges from the Award to a discretionary source. It is important to note that Cost Transfer functionality in Oracle may not be used for any other purposes which includes: spending down an available balance, clearing a deficit by moving charges from the Award in deficit to another Award, and also to change Expenditure Type. 

Essential Information


Next Steps 


Initiators Completing Cost Transfer Justifications

1. When completing the Cost Transfer in Oracle, please reference, KB0033457: How to Initaite a Full or Partial Cost Transfer in Oracle PPM 
2. At the end of the Cost Transfer process after clicking Submit, enter the following information in the Submit Adjustment for Approval dialog box: 
3. Answer the following questions, considering a 1000 character limit:

a. Why is the Cost Transfer being done?
b. What is the benefit to the Project or other Chart Segment, the Cost Transfer will be sent to?
c. Why is the Cost Transfer untimely, Expense is past 90 days?
d. What action is being taken to avoid the necessity for this type of Cost Transfer in the future?

4. Before answering questions for High Risk Justifications, coordinate with PI to obtain more details on how the item being transferred directly benefits the Contract or Grant that you are moving to:

The goal of the explanation is to have a stand alone justification for the auditors to avoid additional questions of PI or department. For example:

  1. If moving a lab Expense such as a chemical, ask the PI how that chemical is used in support of the research.
  2.  Attach any documentation or include in the justification the name and employee ID (EID) of whom the Expense belongs to.
  3. If it’s High Risk you must address these questions, for reference:  Project Transaction Codes - IFIS E Codes High Risk Justifications.
    • Are you moving to a federal fund?
    • Older than 90 days?

Approvers Reviewing Cost Transfer Justifications

1. Review Cost Transfer Guidelines and Resources, especially the ramifications of a disallowance.
2. Review the Initiators’ requirements
3. If you need additional guidance, work with SPF
4. The PI and Department will be responsible for covering any disallowances, see Audit Considerations.


Audit Considerations

      Audit Disallowance Examples 

  1. If the Cost Transfer is approved, the following examples won’t pass audit:
    1. Laptops that were purchased in the final 90 days of an expiring Award.
    2. Equipment that was transferred in the final 90 days of an expiring Award.
    3. Supplies that were not fully consumed prior to the end date of an expiring Award.
    4. Moving Expenses from research Funds to participant support, consult with OCGA for a re-budget if needed.

      Consequences of Audit Disallowances

  1. Extrapolation of the disallowance to the campus:
    • For example, if the auditors find a $100 charge that isn't allowed, they will multiply that value against all the funding at UCSD and come up with a figure for UCSD to pay.
  2. Disallowances will require the PI or department to cover with Discretionary Funding.
  3. PI and Department may not have the Funds to cover the disallowance and will need to request Funds from their VC.
  4. Agencies could withhold future Sponsored Research Funding if they believe there is non-compliance.

Supplemental Guides 


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