Award Modifications and Budget Adjustments

Award Modification

When project modifications (i.e., revised budgets, no-cost extensions, etc.) are necessary, principal investigators/departments must provide adequate justification and ensure required approvals are obtained.

Modifications such as those listed below, typically require approval from the sponsor, RMS as well as CGA.

  • Change in scope
  • Change in Key Personnel
  • Supplemental Funding
  • Budgeting Revisions *
  • Carryover Funding *
  • Sponsor approved No-Cost Extension (NCE)
  • Grant Transfers

* If pre-approved by the sponsor, these items can be requested of CGA directly.

Budget Revisions

In order to effectively manage sponsored awards, CGA and the departments must work together to ensure budgets are accurately reflected in the UCSF financial system. Initial budget appropriations are completed by CGA when

  • a new award is established in the Research Administration System (RAS);
  • an award renewal is finalized in RAS; or
  • an award modification is executed and processed in RAS, including continuations, supplements, carry forwards, reductions, reinstatements and any other actions that are sponsor initiated and impact the budget.

CGA uses an internal budgeting process, centrally referred to as the Auto Budget process, to post the sponsor-approved budgets to the General Ledger using a source code 136 journal. This establishes the budget with a revenue component offset by the expense side. A budget journal records the initial appropriation using three accounts:

  • 41xxx – Sponsored project revenue based on award funding source (federal, state, private, etc.)
  • 58350 - Sponsored project unallocated expense BUDGET (direct cost budget)
  • 51401 - F&A indirect cost recovery

The budget process appropriates the total budget to the identified primary project and corresponding posting Dept ID in RAS. Budget journals carry the opposite sign of a financial journal. Therefore, while revenue is financially a credit (-), for budgeting purposes, it is a debit (+). Additionally, revenue should be offset by expense to create a budget that nets to zero.

To enable reporting of budgets as approved by the sponsor in the award agreement, CGA has implemented various methods to record any budget adjustments that may be necessary.

  • Award Modifications Page in RAS
    • If an award does not require sponsor approval for carryforward, CGA will adjust the Award Modifications page in RAS to reflect the carryforward moving from one year to the next. The Auto Budget process will use the information on the Award Modifications page to generate a journal approximately two days after the date it was added.
  • Budget Adjustment Journals
    • For all other instances in which changes to the budget cannot be recorded by adjusting the Awards Modifications page, a manual budget adjustment journal must be prepared.
    • The following source codes used are used for budget appropriations and adjustments.
Source Code Title Purpose

135

Budget Adjustment Journals – Spon Proj Bud (Dept)

For departments to re-allocate expenses between expense accounts, Dept ID or Projects within the same Award and/or Activity Period.

136

Budget Adjustment Journals –

Spon Proj Bud (CGA)

Used exclusively by CGA to record the initial award budget

137

Budget Adjustment Journals –

Spon Proj Bud Carryforward (CGA)

Used exclusively by CGA to record carry forward adjustments between award budget periods/ RAS activity periods

138

Budget Adjustment Journals –

Spon Proj Bud Other (CGA)

Used exclusively by CGA to record additional sponsored funding generated by activity outside of sponsor control, e.g. STIP, currency exchange fluctuations, etc.

Budget Reallocations for Sponsored Projects

Where essential, or appropriate for award management, department administrators can reallocate the expense budget component between expense accounts, Dept IDs, or projects within the same award and/or activity period. This is completed by preparing a source code 135 journal.

The following examples illustrate common budget reallocation scenarios.

Basic Budget Journals

Following is an example of a basic budget journal for a sponsored project at our current federally negotiated Indirect Cost Recovery (IDC) rate of 61.5% with no excluded costs from IDC recovery.

Account

Fund

Dept ID

Project

Activity Period

Function

Flexfield

Debit

Credit

41xxx (Sponsored project revenue based on award funding source)

4xxx

xxxxxx

xxxxxxA

01

44

optional

100,000

 

58350 – Spon proj unallocat exp BUDGET

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(61,919.51)

51401 – F&A indirect cost recovery

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(38,080.49)

Example 1: Reallocating Budgets to a Secondary Project

To illustrate using an example, half of the basic budget above needs to be reallocated to a secondary project. Only the expense budget is reallocated for this purpose. The following journal lines are necessary to record the reallocation.

Account

Fund

Dept ID

Project

Activity Period

Function

Flexfield

Debit

Credit

58350 – Spon proj unallocat exp BUDGET

4xxx

xxxxxx

xxxxxxA

01

44

optional

30,959.75

 

51401 – F&A indirect cost recovery

4xxx

xxxxxx

xxxxxxA

01

44

optional

19,040.25

 

58350 – Spon proj unallocat exp BUDGET

4xxx

xxxxxx

xxxxxxB

01

44

optional

 

(30,959.75)

51401 – F&A indirect cost recovery

4xxx

xxxxxx

xxxxxxB

01

44

optional

 

(19,040.25)

Example 2: Budgeting Using Specific Cost Accounts

Some sponsors require tracking at more specific expense categories. This entails the transfer from the direct cost budget Account 58350 to specific cost accounts. Example journal lines to record the transaction could be:

Account

Fund

Dept ID

Project

Activity Period

Function

Flexfield

Debit

Credit

58350 – Spon proj unallocat exp BUDGET

4xxx

xxxxxx

xxxxxxA

01

44

optional

30,959.75

 

50101 – HCOMP – fiscal year base

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(10,000.00)

50575 – CBR Faculty

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(5,000.00)

50301 – Non-faculty acad salaries

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(6,000.00)

50576 – CBR NFA

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(3,000.00)

52113 – Other medical supplies

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(5,000.00)

52204 – Lab animals & care

4xxx

xxxxxx

xxxxxxA

01

44

optional

 

(1,959.75)

Note: For budgeting purposes, you do not need to reallocate expense budgets down to every possible account. Using the PeopleSoft Account Tree, budget amounts can be set using one account to represent expense charges to related accounts that roll up to the same higher-level expense category established for financial reporting to the sponsor.

As an example, medical supplies expense budgets can be reallocated to Account 52113 – Other medical supplies even if you expect expenses to be recorded using several other expense accounts within the same expense category (defined in this example as 557E - Medical supplies expense-other at Account Tree Level E). As long as all accounts roll up to the same parent expense category established for financial reporting to the sponsor, budgets can be reallocated to one representative account.

  • 557E – Medical supplies expense-other
    • 52105 - Prostheses/transplants/devices
    • 52106 - Blood & blood products
    • 52107 - Catheters/tubes/bandages
    • 52108 - Sutures & needles
    • 52109 - Surgical packs & sheets
    • 52110 - Radioactive supplies
    • 52111 - Anesthesia supplies
    • 52112 - Surgical supplies
    • 52113 - Other medical supplies
    • 52150 - Genom array<$75,000 per yr-NIH

 

Budget reallocation can become more complicated during the life of the sponsored project or when exclusions from IDC recovery apply. While the above principles are the same, you must identify the actual remaining balances between direct cost and indirect cost before processing a reallocation. Also, breakdowns between direct and indirect cost represent an estimate of how an award budget will be spent. Actual use of the direct cost and indirect cost budget will vary if planned costs change, especially when moving to or from a category that is excluded from indirect cost recovery. Rebudgeting authority and any restrictions should be confirmed prior to making any actual purchases or adjusting the budget.

For detailed information on preparing budget entries, refer to the Budget Adjustment Journals job aid.