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Cost Transfers (Expenditure Adjustments)

Guidance on the appropriate use of cost transfers, including the required documentation to support Cost Transfers (Expenditure Adjustments).

A request for adjustment of expenditures shall meet all of the following tests when the adjustment is to transfer a cost TO an extramural fund source (grant or contract):

  • It must relate to individual items of expenditures incurred by the unit requesting the adjustment.

  • There must be a logical and documented method for determining the amount of expense to be transferred (e.g., a cylinder of oxygen or fraction thereof, two hours of technical staff when identifiable to a specific cost objective). Transferring an amount equal to the remaining unspent funds for a project with no logical breakdown of items is not acceptable. Documentation of the method of determining the amount to transfer must be kept with the department expense records and available for review or audit.

  • It must contain a reference to the invoice, payroll, or other disbursement document(s) which initiated the original direct charge.

  • Reference the original expense document in the transfer document.

  • It should be in the same amount originally recorded in the university general ledger (i.e., the whole amount or the appropriate fraction charged to and/or paid by the unit requesting the adjustment). If transferring a fractional amount the transfer request must contain an explanation supporting a reasonable and equitable method of allocation.

  • It is necessary to document not only the dollar amount to be allocated to each account and the method used to determine the allocation (e.g. estimated use of item on each project, total personnel time for each project) when transferring part of an expense. The method of allocation must be appropriate for the type of expense. Documentation of the method of allocation must be kept with the department expense records and available for review or audit.

  • It must be fully explained, justified, and approved by the unit administrator(s) involved in the transaction. An explanation which merely states that the adjustment being made is "to correct an error," "to transfer to correct project," or "expenditure inadvertently charged to incorrect account/fund" is not sufficient.

  • Fully document the reason for the incorrect charge and why the charge is allowable and allocable to the new account. Documentation of the payroll transfer justification must be kept with the department expense records and available for review or audit. For non-payroll transfers, enter the justification in the appropriate Kuali Financial System (KFS) document (DI or GEC).

  • For Federal grants and Contracts: In the case of adjustments which involve federal grants and contracts, the certification and approval signatures must include that of the project director (principal investigator), department head, or other academic officials. For transfers processed electronically or using online systems, the certification and approval of the department head, project director (principal investigator) or other academic officials must be maintained by the department in accordance with local campus requirements. For transfers to federal funds after 120 days, Contracts & Grants Accounting approval is also required.
     

High Risk/Late Transfers

UCPath Direct Retro (DR)

  • High risk payroll cost transfers are transfers TO a Federal or Federal flow-through account that are recorded in the general ledger more than 120 days after the pay end date OR more than 90 days after the award end date. These transactions will route to Contracts & Grants Accounting (CGA) for final approval. Cost transfers resulting in a credit to a Federal or Federal flow-through fund will not route to CGA for approval.
  • If, in very rare occasions because of unavoidable circumstances, a department feels that adjustment TO a Federal or Federal flow-through fund beyond the 120-day period is justified and supportable, a full explanation including a well-documented account of all the events leading to the tardy adjustment, must be provided to CGA for a pre-approval prior to initiating the DR transaction. CGA’s pre-approval must be attached to the DR for final approval. Requests for adjustments beyond the 120-day period should be RARE and requests should only be submitted if the department can justify circumstances that were unavoidable.

  • To request a late transfer due to unavoidable circumstances, prepare the UCPath High Risk Direct Retro Pre-approval Form and submit it to Finance CGA EFAAwards via email (efa@ucdavis.edu).  When transferring more than 9 expense lines, use additional sheets as needed.  It must be approved by CGA and attached to the UCPath Direct Retro transaction prior to submission.  If a transfer is received in CGA for approval and does not have the signed pre-approval form attached, the document will be Denied (disapproved).

KFS General Error Correction

  • High risk non-payroll cost transfers are transfers TO a Federal or Federal flow-through account that are recorded in the general ledger more than 120 days after the close of the ledger month to which the expense initially posted. These documents must be initiated by Contracts & Grants Accounting (CGA) if approved.  Cost transfers resulting in a credit to a Federal or Federal flow-through fund do not have to be initiated by CGA.

  • If, in very rare occasions because of unavoidable circumstances, a department feels that an adjustment TO a Federal or Federal flow-through fund beyond the 120-day period is justified and supportable, a full explanation including a well-documented account of all the events leading to the tardy adjustment, must be provided to CGA for approval and processing. Requests for adjustments beyond the 120-day period should be RARE and requests should only be submitted if the department can justify circumstances that were unavoidable.

  • To request a late transfer due to unavoidable circumstances, prepare and submit the justification and a DS FIS-2 report with the highlighted transactions to CGA EFAAwards via email (efa@ucdavis.edu).  The approval of the PI must accompany the justification. It must be approved and initiated by CGA.

  • Reference: Business and Finance Bulletin A-47