1. Cost Transfers Workshop June 2005

2. Background  The result of a recent audit conducted by Audit Services and Institute Compliance (ASIC) indicated that: 1.Overall, the Cost Transfer Policy has been working well. Controls related to cost transfers and compliance to the policy are adequate. 2.However, documentation and/or written authorization for labor cost transfers within 90 days were not always maintained by department/division.

3. Labor Cost Transfers within 90 Days – Previous Policy  Cost transfer and justification form is sent to designated division personnel for input in the LD module.  The labor distribution unit within Human Resources reviews the transaction and if approved, releases it for processing. If rejected, the division will be notified.

4. Labor Cost Transfers within 90 Days – Previous Policy  The Divisions are expected to maintain the completed Cost Transfer and Justification form or a screen shot of the cost transfer along with the documentation of who approved the cost transfer.

5. Labor Cost Transfers within 90 Days – Revised Policy  The cost transfer and justification form is no longer required for labor cost transfers within 90 days.  However, specific questions must be answered in the LD module.

6. Labor Cost Transfers within 90 Days – Revised Policy (cont’d)  Question #1: Has the cost transfer been reviewed and approved by a designated/knowledgeable person (i.e. PI, grant manager)?

7. Labor Cost Transfers within 90 Days – Revised Policy (cont’d)  Sample answer #1: Dr. Paul Johnson approved the labor adjustment for John Murphy for the period Aug 1 – 31, 2004.

8. Labor Cost Transfers within 90 Days – Revised Policy (cont’d)  Question #2: Why was the labor expense posted to the incorrect PTA?

9. Labor Cost Transfers within 90 Days – Revised Policy (cont’d)  Sample answer #2: John Murphy’s labor schedule was not updated in time for his work activity to be correctly reflected in the receiving account (PTA PJ.00005-1- NASA.000130).

10. Labor Cost Transfers within 90 Days – Revised Policy (cont’d)  Question #3: Why should the labor expense be transferred to the proposed receiving account? How does the receiving account benefit?

11. Labor Cost Transfers within 90 Days – Revised policy (cont’d)  Sample answer #3: Effective 8/1/04, John Murphy’s work activity was 100% on Dr. Johnson’s NASA project.

12. Labor Cost Transfers within 90 Days – Revised policy (cont’d)  Question #4: Based on the terms and condition of the receiving award, are the charges allowable and allocable?

13. Labor Cost Transfers within 90 Days – Revised policy (cont’d)  Sample answer #4: The costs are allowable and allocable under the terms and conditions of the NASA project.

14. Within 90 Days – Non-Labor Cost Transfers  Procedures for this type of cost transfers remain the same. That is, complete the cost transfer and justification form and submit to Project Accounting for review and approval.

15. Over 90 Days – Both Labor and Non-Labor Cost Transfers  Policy and Procedure for these types of cost transfers remain the same: completed cost transfer and justification forms have to be signed by PI and Division Chair, then submitted to Project Accounting for review and processing.

16. Procedures within Individual Divisions  The “Cost Transfers to Federally Funded Awards Policy” lists the minimum requirement.  Individual Divisions/Departments can impose stricter guidelines.

17. Justification and Documentation: Within 90 days Non-Labor Cost Transfers Acceptable Justifications: 1.To correct administrative error. 2.On closely related projects, to redistribute costs based on actual usage. 3.To transfer expenses charged to an unrestricted fund source awaiting approval of a sponsored project.

18. Justification and Documentation: Within 90 days Non-Labor Cost Transfers (cont’d) Acceptable Documentation: 1.A screenshot/download from Discoverer with the items being transferred highlighted. 2.Download from OGM.

19. Justification and Documentation: Within 90 days Labor Cost Transfers Acceptable Justifications: 1.Labor schedule not updated in time to correctly reflect employee’s work activity. 2.To transfer labor expenses that are temporarily charged to an unrestricted fund source while awaiting the approval of a sponsored project.

20. Justification and Documentation: Within 90 days Labor Cost Transfers (cont’d) Acceptable Documentation: 1.Input in the LD module with the 4 questions listed in the cost transfer policy answered. 2.It is up to the individual division/department to determine what other documentation is required at the division/department level.

21. Over 90 days Cost Transfers – Acceptable Justifications and documentation  Over 90 days Labor and Non-labor cost transfers will only be approved and processed under extenuating circumstances.  Please refer to Appendix A: Extenuating Circumstances for examples.

22. Need Help?  Please contact the Project Accountant assigned to your Division if you need further assistance.