Accounting for Surplus, Overspending Transfers, and Cost Share Sweep Transactions

Overview

These procedures set forth the accounting to move the deficit/overdraft or surplus associated with a sponsored award as well as to sweep the cost share for a sponsored award. These procedures ensure consistency in accounting treatment while allowing for proper mission-based reporting.

Deficit Transfers

Transfers are needed to clear overspending on an award which can result from:

• Deficits or excess expenditures over revenue
• Overdrafts or when spending exceeds budget

The preferred way to clear overspending is during the life of an award. The department will move specific operating or payroll expenses that are the cause of the overspending from the award to another department funding source. These journals will use the Account of the original expense (note, the movement of payroll expense is facilitated through a UCPath salary cost transfer, not a journal). Occasionally, the overspending will not be cleared before award closeout or as required by the Overdraft Monitoring Policy, and CGA will transfer the overspending as a lump sum transfer using expense Account 58351. The chartstring used in an overspending transfer journal is determined by the source and destination projects and should be recorded as follows:

Please note the following regarding the above journal:

• If the department is moving specific expenses, the Account is derived from the original expense. If CGA is moving lump sum overspending, the Account is 58351. The Account is always the same on both sides of the journal.
• The debit line is posted to the discretionary fund absorbing the deficit. Discretionary funds do not require a Period chartfield. (Note: The deficit may be moved to another sponsored award, but this should be done at a transactional level to determine and document appropriateness of transactions in relation to the new award funding source.)
• The Function code is unique to each line and is derived from the funding source of the debit and credit sides of the transaction. Therefore, if the debit line is from a sponsored award with a main purpose of Research, the debit line of the journal should use Function code 44; if the credit line is from a discretionary fund that has a main purpose of Faculty Support, the credit line of the journal should use Function code 45. This allows for proper mission-based reporting. University-wide reporting will be facilitated through monthly elimination entries.
• Deficit transfers move the direct cost portion only.

Surplus Transfers

Occasionally, a surplus (defined as excess of revenue over expenditures) remains at the conclusion of an award. The sponsor terms dictate if the surplus must be returned or if it can be retained by the University as support. In instances where UCSF retains the surplus, CGA will transfer the surplus to a department discretionary Project. Surplus transfers will be recorded to transfer Account 78070 on both the source and destination projects. The chartstrings used in a surplus transfer journal are determined by the source and destination projects and would be recorded as follows:

Please note the following regarding the above journal:

• The credit line is posted to the discretionary fund receiving the surplus. Discretionary projects do not require a Period chart field.
• The Function code will be unique to each line and be derived from the funding source of the debit and credit side of the transaction. Therefore, if the debit line is from a sponsored award with a main purpose of Research, the debit line of the journal should use Function code 44; if the credit line is from a discretionary fund with a main purpose of Faculty Support, the credit line of the journal should use Function code 45. This allows for proper mission based reporting. University-wide reporting will be facilitated through monthly elimination entries.
• Surplus transfers are moving the excess dollars after adjusting for IDC (Indirect Costs, also known as overhead or F&A).
• Surplus balances can ONLY be transferred to a discretionary account
• Prior to the completion of the surplus transfer, further escalation and approval will be requested if the award balance is 50% or greater of the award revenue as follows:
  • Department Management Service Officers (MSO) - 50%, or greater, of award revenue
  • Control Point Financial Officers (CPFO) – 100% of award revenue

Cost Sharing Sweep Transactions

As part of the cost sharing (CS) process a research administrator directs transactions to CS Fund 4900 in combination with the sponsored project to cover the commitments expected for a specific award. This includes payroll distribution lines. On a monthly basis, the CGA Compliance team reviews all CS transactions and posts a financial journal that debits the funding source chart string for 100% of the CS expenses posted that month. The credit side of the journal clears Fund 4900 on the sponsored project. The chartstrings used for the CS financial journal are determined by the source and destination projects and would be recorded as follows:

Please note the following regarding the above journal:

• All lines use expense Account 51331 (Cost sharing expense). This account should only be used by CGA Compliance for the monthly distribution of the cost share. At times, a department may redistribute the cost share commitment between other funding sources (non 4xxx funds). At this time, they will also use Account 51331.
• The Function code will be unique to each line and be derived from the funding source of the debit and credit side of the transaction. Therefore, if the debit line is from a discretionary fund with a main purpose of Faculty Support, the debit line of the journal should use Function code 45; if the credit line is from a sponsored award with a main purpose of Research, the credit line of the journal should use Function code 44. This allows for allows for proper mission based reporting; university-wide reporting will be facilitated through monthly elimination entries.
• When all transactions are complete, the Cost Sharing Fund (4900) and the Cost Sharing Expense Account (51331) have a net zero balance.

CGA Monthly Elimination Entries

As part of the monthly financial closing process, CGA will post three entries to eliminate the functional effect of all Deficit Transfers, Surplus Transfers, and Cost Sharing Sweep Transactions in the university-wide financial statements.

CGA will run three separate queries to identify all transactions posted to Accounts 58351, 78070, and 51331 during the last month, summing by Fund, DeptID, and Function. CGA will then post a journal to eliminate the net movement within each Account between Functions in the adjustment period. Adjustment period transactions should not be reversed or modified by anyone other than the original journal creator.