UCR Policies and Procedures

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Policy Number:           200-50
Policy Title:                 Cost Transfers
Policy Owner:             Accounting
Effective Date:            03/01/2013
I.        General Policy
A.    Non-Payroll
Users completing non-payroll cost transfer must complete the following training available via the Learning Management System (LMS) before accessing the University Of California, Riverside Financial System (UCRFS) cost transfer applications:
·         Enterprise Accountability On-Line
·         Introduction to the Full Accounting Unit (FAU)
·         Cost Transfers:  NCT & FCT Training
·         Cost Transfers:  PCT Training
When a non-payroll expenditure needs to be transferred to another FAU (account-activity-fund-function-cost center-project code) and neither the credit or debit is to a federal or a federal flow-through fund, the Non-Payroll Cost Transfer (NCT) application should be used to complete the transaction  If either the credit or debit is to a federal or a federal flow-through fund, the Federal Non-Payroll Cost Transfer (FCT) application Federal Expenditure Cost Transfer Form is used to complete the transaction.   FCTs will generate a negative confirmation e-mail notification to the Principal Investigator on the federal funds; the PI has 10 days to notify his/her department administration of errors..
The campus financial system (UCRFS) and payroll system will automatically detect when federal funds are involved, however, users can identify a federal fund by following the steps below:
·         In UCRFS, select the Accounting Admin-Chartfield Attributes-Fund Attributes menu item and enter the fund number. Under the Extramural tab, if the Fed Flow-Thru Code equals, 2, 3, 6, 7 or 9, the fund contains federal funds.
If the cost transfer involves the re-distribution a procurement card purchase (source code PRO), the ProCard Cost Transfer (PCT) application should be utilized.
B.    Payroll
Cost Transfers involving payroll transactions must be processed through the Payroll Personnel System (PPS). Access to PPS requires special training. Cost transfers involving salaries must include the related benefit expenditures. Any transfers to and from Federal Contracts and Grants must be approved by the PI and include an explanation of how the error occurred. The department is responsible for retaining this documentation for audit purposes. Please refer to the On-Line Payroll Time Reporting System Procedures on payroll cost transfer for additional instructions. 
C.   Criteria for Cost Transfers
University requirements and federal regulations specify the following concerning cost transfers:
1.    Once an expense is initially recorded in the general ledger, it is only appropriate to transfer the expense from one account/fund/sub/object code to another under the following conditions:
a.    To correct an erroneous recording when the original transaction (e.g., invoice, travel expense voucher, purchase order, etc.) cited an incorrect FAU.
b.    To record a change in the decision made originally as to the use of the goods or services (e.g., a case of beakers is originally ordered for and charged to a teaching program, but later is actually used in a separate research project).
c.    To redistribute certain high numerical but small individual and/or minor charges billed to a single FAU, but a portion applies to other FAUs as documented by internal records/logs of usage to support the adjustment.
2.    Cost transfers to correct errors must be made promptly 120 days from the original charge when the cost is being transferred to a federal or federal-flow through fund.  Both the FCT and NCT applications inhibit prior fiscal year cost transfers and transfers of transactions 120 days and older involving contract and grant funds. The FCT and NCT applications will also inhibit transfers of previously transferred costs. Similarly, the Payroll Personnel System (PPS) inhibits cost transfer by preventing the transfer of payroll transaction 120 days and older to a contract and grant fund. If a correction is required, the cost may be transferred to an unrestricted fund. 
3.    Exceptional approval is required for cost transfers:
a.    Involving charges that cross fiscal years.
b.    Cost that are more than 120 days old based on the original posting date and being transferred to a contract or grant fund.
II.        Exceptions
Please note that requests for exceptions must fully document the circumstances causing the delay, as well as the cause of the error. Exceptions must be approved by the PI, Department Chair/Head, Organizational Chief Financial and Administrative Officer, the campus Controller and/or the Vice Chancellor of Finance & Business Operations. Requests for exceptions will be granted infrequently due to University policy and compliance requirements.
III.        Roles & Responsibilities
A.    Departments
It is important that departments initially code transactions to the correct FAU, reconcile and certify departmental ledgers per campus guidelines and timelines, and review financial activity recorded under contract and grant funds promptly. Departments and organizational units should ensure all required cost transfers are completed within the 120 day eligibility period and use the campus pre-awards process when applicable to eliminate the need for cost transfers. 
B.    Organizations
Communicate expectations to departments for prompt identification and correction of errors. Review requests for exceptions ensuring the documentation is complete, the reason clearly explains how the error occurred and how the error will be prevented in the future, and approve as appropriate.
IV.        References
·         U.S. Office of Management and Budget Circular A-21, "Cost Principles for Educational Institutions":  http://www.whitehouse.gov/omb/circulars_a021_2004/
·         U.S. Office of Management and Budget Circular A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations": http://www.whitehouse.gov/omb/circulars_a110/
·         Business and Finance Bulletin A-47, "University Direct Costing Procedures:. http://www.ucop.edu/ucophome/policies/bfb/a47.pdf
·         UC Contract and Grant Manual, Chapter 7: http://www.ucop.edu/research-policy-analysis-coordination/resources-tools/contracts-and-grants-manual/chap07.pdf
·         UCR Pre-Award Policy 550-80: http://fboapps.ucr.edu/policies/index.php?path=viewPolicies.php&policy=550-80
·          UCR BEA, NCT, Recharge Use Policy Number 200-03: http://fboapps.ucr.edu/policies/index.php?path=viewPolicies.php&policy=200-03
V.        Questions
Questions regarding NCTs, FCTs, and PCTs should be directed to the Accounting Office at ucrfsfeedback@ucr.edu. Question regarding payroll costs transfers should be directed to the Payroll Office at x2-3307.