1. Account Monitoring and Reconciliation Can Reduce Cost Transfers

2. Instructor Introductions
Sharon DeCarlo
Projects Accounting Manager, Sponsored Projects Accounting
Megan Schosker
Senior Subcontract Officer, Office of Contracts and Grants
Research Essentials In-Depth Series

3. Learning Objectives
- Gain an overview of Account Monitoring and Reconciliation - Identify responsibilities in the review and approval processes of transactions

4. Account Monitoring & Reconciliation
Account Monitoring is a process that all fiscally responsible staff complete to ensure transactions are accurately accounted for in the University’s financial records. To be in compliance with applicable policies, regulations, rules, contracts, and grants.

5. Account Monitoring and Reconciliation
Important to review Financial Statements
To be in compliance with OMB’s A-21 and Uniform Guidance
Ensure all transactions are allowable, allocable, reasonable, and consistently treated in like circumstances
Correct errors early rather than later

6. Account Monitoring and Reconciliation
Who should be monitoring accounts
Fiscal Staff
Fiscal Managers
Principal Investigators (PI)

7. Account Monitoring and Reconciliation
Financial Review
Each transaction should have two sets of eyes: Reviewer and Approver
Review financial reports every month
Detailed review of transactions, matching each with related documentation
Compare actuals to budget
Salary posted correctly
Investigate and resolve discrepancies early

8. Account Monitoring and Reconciliation
Financial statements and reports
SpeedType (ST) Summary
Balance Sheet
Operating Summary
Financial Detail
Outstanding Encumbrances
Mention newer report – Award report

9. Financial Statements and Reports
SpeedType Summary
High-level view of available balances
Deficit balances
Balances in suspense or clearing SpeedTypes
Balance Sheet
Abnormal balances
Look for balances in:
– Company Card Personal Charges
– Travel Advances,
– AP Manual
Any other accounts that should clear

10. Financial Statements and Reports
Operating Summary
Abnormal Balances
Balances in suspense or clearing account codes
Odd account codes for the SpeedType’s activity
Financial Detail
Unexpected transactions
Missing transactions
Abnormal account codes
Credits to expense/debits to revenue
Outstanding Encumbrances
Review for accuracy
Already calculated into Available Balance

11. Financial Reconciliation
The Goal of a Reconciliation
Ensure all transactions are documented and appropriate for the SpeedType and Account Code
Provide management with reasonable assurance that resources are safeguarded and transactions are authorized, valid, complete, and accurate
Identify and correct errors in a timely manner (and not wait until June)
Demonstrate good stewardship and accountability

12. Account Monitoring and Reconciliation
Training Exercise

13. Learning Objective
Participant will be able to identify the importance of subrecipient monitoring.

14. Subrecipient Monitoring Why do we do it?
Pass-through entities (CU) must monitor the activities of subrecipients as necessary to ensure that the subaward:
is used for authorized purposes
is in compliance with Federal statutes and regulations
follows the terms and conditions of the subaward,
subaward performance goals are achieved.
**Failure could result in damage to the University via reputation,
current funding and future funding**
The Uniform Guidance requires pass-through entities to evaluate each subrecipient's risk of noncompliance in order to determine the appropriate monitoring level, monitor the activities of subrecipient organizations to ensure that the subaward is in compliance with applicable Federal statutes and regulations and terms of the subaward, and verify that subrecipients are audited as required by Subpart F of the Uniform Guidance.  
Responsibility of monitoring the programmatic and financial activities of our subrecipients to ensure proper stewardship of sponsor funds.
Failure note: More importantly it is our responsibility to ensure the funds we have been trusted with are being used appropriately.

15. Subrecipient Monitoring How do we do it? In OCG
When the Subaward begins the Subs Team reviews or completes:
System of Award Management (“SAM”) – Domestic
Visual Compliance - Foreign Entities
Subrecipient Commitment form or Letter of Intent
Sole Source Justification (for Prime Procurement Contracts only)
Sub Review form
Cost Price Analysis / Budget Analysis
Risk Analysis & Checklist
IRB or IACUC approvals
Depending on the outcome of these various reviews we can do many things to mitigate risk such as:
Require incremental funding on smaller amounts and shorter budget periods
Withhold funds until evidence of acceptable performance;
More detailed reporting;
Additional monitoring;
Require grantee to obtain technical or management assistance;
Establish additional prior approval

16. Subrecipient Monitoring How do we do it? In the Department
Department Administrator and PI should review:
Sub’s burn rate
Sub’s performance in accordance with SOW and Agreement
Invoices
Do not be afraid to reject an invoice
Suggestions:
Use PI approval template in
DocuSign
stamp for PI approval
Example:
Potential Risk: Failure to take enforcement action when a subrecipient does not meet the expectations of award management.
- Examples include: Not enough detail on invoices, not timely invoicing, late or incomplete reports, etc.
Mitigating Steps: PI approval of each invoice, with signature.

17. Learning Objectives
- Distinguish the difference between a Cost Allocation and Cost Transfer
- Understand how to minimize Cost Transfers

18. Cost Allocation vs. Cost Transfer
Cost Allocation is defined as a process of identifying, aggregating, and assigning costs to cost objects. In our business, this is assigning costs to sponsored research projects.
A single charge benefiting multiple projects needing to be allocated across multiple accounts
Equipment is an example

19. Cost Allocation vs. Cost Transfer
A Cost Transfer is an after-the-fact reallocation of costs, either salary or non-salary costs, to a sponsored project. These should be processed as soon as the error is noticed but no later than a 90 day period from the original accounting date.
Examples of when cost transfers are acceptable
Correction of a clerical error
Reallocation of a salary expense
Transfer pre-award costs from discretionary fund
Examples of when cost transfers are not acceptable
Clearing deficits
Using remaining balance

20. Cost Allocation vs. Cost Transfer
Training Exercise

21. Cost Transfers Minimizing cost transfers
Cost transfers should be considered “the exception, rather than the rule,” and must be kept to a minimum
Ensuring expenditures are accurate and appropriate and posted to the intended Speedtype/Account Code
Diligent monthly review of financial reports and timely communication between principal investigators and departmental administrators

22. Cost Transfers Timing of Cost Transfers
Transfers processed within the first 30 days from the original posted expense are considered to be acceptable corrections of errors
Transfers processed between 30 and 90 days from the original posted expense must include written justification and all relevant back-up documentation
Transfers completed greater than 90 days from the original posted expense are considered exceptions and require substantial and reasonable justification

23. Cost Transfers Tips for a seamless approval
Include a complete and clear explanation, as well as all supporting documentation (FIN 9.2 now has an attachment feature to the journal entry)
Each cost transfer must identify the original transaction, referring to the original Journal ID number, and the Journal date
Salary adjustments or cost transfers of salaries and wages should be made BEFORE work effort has been certified by the employee

24. Recap of Learning Objectives
Today we:
Discussed Account Monitoring – who, when, and why
Discussed the financial review process
Identified a few financial reports to use during the reconciliation process
Learned what is Subrecipient Monitoring
Discovered the difference between Cost Allocations and Cost Transfers
Obtained information for a seamless cost transfer when needed
Talk about the learning objectives and ask if there is anything that we did not cover of this topic

25. Resources: OUC Accounting Handbook Campus Controllers Office
Campus Controllers Office
Departmental Financial Management Guide – “The Guide”
Cost Transfer policy
Cost Transfers journal entry help page

26. Thank you