All late cost transfers are an exception to established UCSF policy and are closely reviewed before being approved or denied. Effort should be taken to minimize the need for late cost transfers by reviewing financial activity in a timely manner and transferring expenses to the appropriate funding source within 120 days as necessary. By consistently reviewing expenses and transferring timely, the additional documentation and explanations associated with late cost transfers can be avoided reducing potential audit disallowance risks to the University.
While there are circumstances that make it appropriate to process a cost transfer, additional criteria must be met when the transfer is to a federal award.
- It must contain a reference to the invoice, payroll journal, or other documents which initiated the original charge.
- It should typically be for the exact amount originally recorded in the General Ledger. If transferring a fractional amount, the transfer must contain an explanation supporting a reasonable method of allocation.
- It must be fully explained, justified and approved by the unit administrator(s) involved in the transaction. An explanation which states that the transfer is being made “to correct an error”, “to transfer to correct award”, or “expenditure inadvertently charged to incorrect award” is not sufficient.
- The approvals must include the Principal Investigator.
- Transfers must be processed within 120 days from when the original charge was posted.
If there are unavoidable circumstances which necessitate a transfer 120 days or later, a full explanation is required, including a well-documented account of the events that led up to the late adjustment. This process is documented via the late cost transfer process.
How to Submit a Late Cost Transfer Policy Exception Request
The implementation of UCPath in June 2020 has changed the way that we must process late cost transfers for payroll activity. UCPath identifies a salary cost transfer (direct retro) as a late cost transfer request based on the following:
- The salary cost transfer creates a new charge to a federal or federal flow-through award
- 120 days or more have elapsed between the:
- Pay period end date
- Date of final department approval
Upon final departmental approval, UCPath will automatically route a salary cost transfer for additional approval to the Contracts and Grants Accounting (CGA) Compliance Team when at least one line of the transaction was approved 120 days or more after the pay period end date.
Follow these steps for all salary cost transfers that are charged (debited) to a federal or federal flow-through award when departmental approval has occurred 120 days or more after the pay period end date of the original payroll charge.
- Complete the Late Cost Transfer Policy Exception Request Form and obtain the approval of the appropriate department financial administrator.
- Initiate and approve the salary cost transfer transaction in UCPath. Salary Cost Transfer Initiators must complete the Questionnaire section, including the following:
- An explanation of how the error occurred.
- The benefit to the receiving grant.
- A justification of the need to transfer the expenses after the 120-day period.
- Obtain approval from the Principal Investigator.
- Submit the Late Cost Transfer Policy Exception Request packet via email to the CGA Service Desk.
- Include the UCPath Direct Retro number.
- Highlight the lines that are late in the salary cost transfer transaction.
- Include all other pertinent information to explain the late cost transfer.
Once a complete packet is received by CGA, it will be reviewed by the Compliance Team for allowability, reasonableness and adequacy of the explanation. The Compliance Team then makes a recommendation to the Assistant Controller, Contracts and Grants Accounting, for final determination whether to approve or deny the cost transfer.
Upon Assistant Controller approval, the CGA Compliance Team will upload the approved late cost transfer paperwork into the direct retro transaction in UCPath and approve it for processing. This process also applies to late benefit cost transfers but is monitored by the CGA Student Services team who will reach out as appropriate to alert the departmental requestor of the need for late cost transfer processing.
There has been no change to the steps necessary for non-payroll late cost transfer processing.
If you have questions about the cost transfer process, including processing of late cost transfers, contact the CGA Compliance team at [email protected]