Issuance Date: 07/01/1991
Issuing Office: Extramural Funds
REFERENCES AND RELATED POLICIES
A-47 University Direct Costing Procedures
This policy establishes guidelines for transferring expense (or direct cost) either after it has been recorded in the ledgers by an authorized transaction for an initial payment or by a recharge from a University administrative or service unit from one accounting distribution to another. Within the context of this policy and procedure, a department refers to an administrative unit, office, project, or activity which is identified by a unique organization/program/fund designation.
A "FDP transfer" refers to a transfer between two or more Federal Demonstration Project (FDP) awards. A non-FDP transfer refers to a transfer between a Federal award (FDP or non-FDP) and any other fund source, extramural or non-extramural. Transfers between FDP and non-FDP awards are cited in regulations and policy entered under I. References.
Policy provides that original certification as to the appropriateness of an expenditure has been accepted as being correct. It is appropriate to make an expenditure adjustment from one accounting distribution to another only in the following situations:
For All Funds
To correct an erroneous recording, such as when the original source document(s) cited an incorrect accounting distribution.
To record a change in the original determination as to the use of goods or services (for example, a case of beakers originally ordered for and charged to a teaching program can be subsequently transferred to a research project).
Federal and Private Contract and Grant Awards
When closely related work is supported by more than one funding source, a transfer of expense from the originally charged funding source to another can be made provided that the request meets all of the following:
The cost is a proper and allowable charge to the new fund source.
The request is supported by documentation which contains a complete explanation and justification for the transfer including the method of proration.
When the transfer is between two or more FDP awards other than National Institute of Health (NIH) or Alcohol, Drug Abuse and Mental Health Administration (ADAMHA), the costs can be charged or transferred to either or any of the awards involved as long as the productivity and the approved scope of those awards are maintained and the costs are otherwise allowable.
For NIH and ADAMHA awards, the benefit must be established, if possible, and the cost allocated based on proportional benefit. "However", when a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, the cost may be allocated to the benefitted projects on any reasonable basis.
Standards For Transfers: Federal Contracts and Grants
A request for the transfer of an expenditure to a Federal contract or grant must meet the following criteria:
Costs must conform to any limitations or exclusions set forth in "OMB Circular A-21 Cost Principles" (see I.C.); the award document, or State and Federal regulations.
Costs may be considered reasonable if they reflect the action a prudent person would have taken under similar circumstances, are of a type considered necessary, and reflect the constraints of arm's-length bargaining.
A cost is allocable to a particular award, if it can be assigned with a high degree of accuracy in accordance with relative benefits received or other equitable relationship.
Costs should be treated consistently under similar circumstances in accordance with generally accepted accounting practices.
Reasons of Convenience
For non-FDP awards, costs may not be shifted in order to meet deficiencies caused by overruns or other fund considerations. For FDP awards see III.A.3. above.
This policy will be applied equally to all non-payroll and payroll expenditure transfers on the San Diego Campus (see PPM 395-4.3, Timekeeping: Review of Charges for additional policy and procedure).
To initiate a non-payroll expense transfer, a Non-Payroll Expenditure Transfer (NPET), Form 2047, Exhibit A, must be completed by the Department.
Operating Ledger Information
The following information from the operating ledger must be entered onto the form:
Accounting Information: Organization name, Index, Fund, and Account number.
Document No.: Ledger column titled "Document"
Reference: Ledger column titled "Reference"
Ledger Date: Date of Operating Ledger
Totals: The totals for the "Debit" and "Credit" columns must be of equal amounts and must be entered on the "Totals: line of the form. The sum total of the debit and credit amounts must be entered on the "Document Total" line of the form.
Ledger Amount: The expense must be in the same amount originally recorded in the operating ledger (i.e., the whole amount or the appropriate fraction charged to and/or paid by the unit requesting the adjustment).
A detailed explanation for each transfer of expense must be entered in the "Explanation" section of the form. An explanation which merely states that the transfer is "to correct error" or "to transfer to correct project" is insufficient.
The explanation need only state: "To transfer costs to the FDP award(s) designated by the Principal Investigator for allocation of these expenditures." Transfers to NIH and ADAMHA grants will either have to indicate the benefit received or state that "The benefit cannot be readily determined and the Principal Investigator is allocating costs based on his/her best judgement."
Gift Funds and Non-Extramural Fund Sources
A brief explanation for each transfer of expense must be entered in the "Explanation" section of the form.
To the maximum extent possible, an expense transfer should be made within 120 days of the original charge. Any attempt to transfer cost more than 120 days after the original charge, raises serious questions concerning the propriety of the transfer. Therefore, if a transfer is necessary after the 120 day period, the supporting documentation, in addition to the required explanation, must also include a detailed explanation as to the untimeliness of the transfer or the transfer will not be processed. This also applies to FDP transfers.
Supporting documentation should include a copy of the Purchase Order, Purchase Requisition, Invoice, or Recharge billing form, whichever is applicable, and a copy of the Operating Ledger showing the original expense. All copies should be annotated to reflect the correct index or fund number.
FDP Transfers, Gift Funds and Non-Extramural Fund Sources
The ONLY documentation required is a copy of the Operating Ledger (annotated to reflect correct index code).
The Non-Payroll Expense Transfer (NPET) must be properly certified and authorized on the lines marked "Department Approval:."
For All Extramural Awards
When an expenditure is adjusted between departments or within the same department between accounting distributions with different signature authorizations, the appropriate authorized signature for each accounting distribution must be provided. Also the signatures in the "Prepared By:" and "Department Approval:" section MUST be by two different individuals.
For direct charges to Federal contracts and grants, PI or Department Chair MUST sign the transfer.
Signature authorization for Principal Investigators may be delegated to the position of administrative analyst or higher. If authorized signature is someone other than the Principal Investigator, a memo signed by the Principal Investigator delegating signature authorization to individual signee must be maintained in the department's files.
The originating department forwards both copies (white original and yellow duplicate) of the Non- Payroll Expenditure Transfer (NPET) form to the Accounting Office, Mail Code 0954.
Approves the forms after ensuring that the adjustments are in compliance with applicable campus, University, and Federal policies.
Assigns "document numbers" to the forms and returns the yellow duplicate copies to the originating department.
As the Office of Record, enters the forms into the financial data base and files the original NPET in compliance with record retention requirements.
Ensures that all charges to Federal contracts and grants, and State and Private grants and agreements are appropriate, accurate and in accordance with agency requirements.
Ensure that NPET forms are complete and accurately contain all pertinent information and support documentation as cited in this PPM.
The above form is in Acrobat Adobe PDF Format.