Cost Transfers on Sponsored Project Grants
Procedure Number: 5.3.2-P
Current Effective Date: 12/01/2018
Original Effective Date: 10/15/2010
Revision Dates: 10/15/2010, 07/01/2013, 09/22/2017
Revision Number: 3
Responsible Official: System Director of Treasury Management and Assistant Treasurer
To set forth conditions for the transfer of costs via on-line journal voucher for sponsored project grants (fund 12s). The federal government’s Uniform Guidance (UG) OMB Part III (2 CFR 200) cost regulation determines costs applicable to project grants and requires proper documentation that an expenditure is appropriate to the project grant receiving the charge, i.e.; that the cost is allowable, allocable, and reasonable. UG regulations make it necessary to explain and justify transfers of costs to a project grant. Because of the nature of cost transfers, timing is also important.
This procedure applies to all KCTCS employees, students, colleges, offices, and workplaces, regardless of location and to all KCTCS-related conduct, policies, decisions, and actions.
Definition of Cost Transfer
- A cost transfer is an after-the-fact reallocation of a cost from one account string to another.
- Although it is preferable to charge costs to the correct account when originally incurred, cost transfers are on occasion necessary to correct accounting errors but not as a form of fiscal or financial management.
- To be allowable, cost transfers must be timely and fully documented, they must conform to KCTCS and sponsor allowability standards (allowable under the terms of the sponsored agreement), and they must have appropriate authorization.
Transfer of Costs - Journal Vouchers
- When processing journal voucher transactions on fund 12 project grants, we must ensure
we follow the sponsor’s award or contract.
- All journal entries on project grants must include detailed descriptions, including a reason for the transfer.
- In all cases, transfers must be made promptly.
- This is particularly critical when approaching KCTCS fiscal year end, and at the project end date.
- For colleges and system office departments, all cost transfers should be made within forty-five (45) days from the date of original transaction, and in all cases thirty (30) days prior to the date the final report is due to the sponsor on the project grant.
- TheKCTCS Office of Sponsored Projects Accounting must approve all project grant cost
- If cost transfer involves non-project grant, account string, approval of KCTCS Office of Financial Services is also required.
- If under some rare circumstances, it should be necessary to make a cost transfer beyond
120 days, the applicable college president/CEO’s (ordesignee) signature and in case
of system office department, appropriate VP signature will be required in addition
to the signatures of the principal investigator/project manager and college business
- Requests for late cost transfers should include an explanation of the extenuating circumstances, which prevented the transaction from completing on time.
Transfer of Costs - Payroll Expenditures
- Because of the federal - Time and Effort (T & E) requirements, fund 12 project grant
journals involving payroll expenses must be well justified.
- WHO: In most cases, a separate journal is required for each employee’s effort being charged (or credited) on the journal. The journal voucher transfer requires documentation with an explanation entered in the long description field and on the journal line description field of KCTCS accounting system.
- WHEN: The journal voucher must describe the pay periods covering the transfer. Payroll for pay end date periods cannot cross our two (2) T & E reporting periods; January through June, and July through December. For example, if moving salary from December 1, 2017 to January 31, 2018. You must break the December figures from January figures into two (2) separate journal lines. Pay period dates must be entered in the long description field and on the journal line description field.
- HOW MUCH: The journal voucher amount needs to match the actual HR records, which also needs to be included in the documentation attachment. If not using exact amounts shown in HR documentation, then you must explain how the amount was calculated. Example, 50% of January 2017 salary charges.
- Special Requirement - Journal Line Description Fields for Project Grants
- For REGULAR SALARY - Smith PED 12/1-12/31/2017
- For REGULAR SALARY - D.Smith PED 1/1-1/31/2018
- For OVERLOAD SALARY - D.Smith OVLD 1/1-2/15/2018
- If a journal voucher processed is for salary expenses covering a prior period in which
the Time and Effort (T&E) certifications process is completed, it will be the department
or college’s responsibility to edit and resubmit the T&E Certification Form (GC5).
- Send the revised form to Sponsored Projects Accounting.
- Blank T & E (GC5) Forms are on KCTCS web site under forms.
4. Cost Transfers Documentation
Documentation (Attachments on Cost Transfers - Journal Vouchers
- Paper journal voucher (BA6) forms are required as part of the attachment documentation when doing online journal vouchers involving project grants (fund 12s).
- Specific identification of the original charge (copy of the origination documents such as a payroll distribution sheets, BA8 (KCTCS Expenditure Transaction Detail) form, purchase orders, or travel vouchers and all supporting vendor invoices, receipts, or other documentation as appropriate.
- Justification of the appropriateness of the charge to the receiving project grant.
- A full explanation of why the transfer is necessary.
- The signature of the project director and/or budget manager on the paper BA6 form.