Responsible Executive: Gary K. Ostrander, Vice President for Research

FLORIDA STATE UNIVERSITY

POLICY 7A-5

COST TRANSFER POLICY

Responsible Executive: Gary K. Ostrander, Vice President for Research

Approving Official: Gary K. Ostrander, Vice President for Research

Effective Date: July 1, 2010

Revision History: New: July 1, 2010

Readopted: August 1, 2014

Revised: ______

I. Introduction

Thispolicyappliesonlytocosttransfersbetweenortosponsoredprojects.

PropermanagementoffundsisessentialtoupholdthefiduciaryresponsibilitiesoftheUniversity.Federalagenciesandothersponsorsmayregardthefollowingactivitiesasindicativeofinadequatefiscalorprojectmonitoring:

•Frequentcosttransfers.

•Latecosttransfers.

•Inadequatelydocumentedorexplainedtransfers,especiallythosewhichinvolvesponsoredprojectswithoverrunsorunexpendedbalances.

Inappropriatetransfersmayresultinexpendituresbeingdisallowedand/orsubsequentreductioninfundingbythesponsoringagency.Alsoabuseofcosttransfersmayresultinmoreseveresanctions,fines,penaltiesandauditcriticismsappliedagainsttheUniversity.

II. Policy

ItisthepolicyoftheUniversitythatcostsbechargedtotheappropriatesponsoredprojectwhenfirstincurred.However,theremaybecircumstancesinwhichitisnecessarytotransferexpenditurestoasponsoredprojectsubsequenttotheinitialrecordingofthecharge.SuchtransactionsrequiremonitoringforcompliancewithFSUpolicy,Federalregulations,sponsorspecificguidelines,andthecostprinciplesthatguidefiscalactivitiesonsponsoredprojects.

ItistheresponsibilityofthePrincipalInvestigatortoprovidefiscally-soundmanagementofprojectexpenses.

Inordertomaintainconsistencyinthetreatmentofcosttransfers,thispolicywillbeappliedtoallsponsoredprojects(FederalandNon-Federal)intheabsenceofwrittensponsorregulations.

•UnderthisPolicy,costtransferrequestsmustbereceivedbySponsored ResearchAccountingServices(SRAS)within90calendardaysfromtheendofthe monthinwhichtheerroroccurred.

•

Forsponsoredprojects,finalapprovalofanycosttransfershallbemadebySRAS.SRASwillnotapprovethetransferunlessitiscompliantwithallapplicablerulesandregulations.IfSRASbecomesawareofaninappropriatechargeonasponsoredproject,thedepartmentwillbenotifiedtoinitiateatransfertoanon-sponsoredaccount.Ifthistransferisnotinitiatedwithinfive(5)workingdaysfromdateofSRASnotificationtothedepartment,SRASwilltransferthechargetoanappropriatedepartmentalorPISRADaccount.

REASONFORPOLICY

PropermanagementoffundsisessentialtoupholdthefiduciaryresponsibilitiesoftheUniversity.Federalagenciesandothersponsorsmayregardthefollowingactivitiesasindicativeofinadequatefiscalorprojectmonitoring:

•Frequentcosttransfers.

•Latecosttransfers.

•Inadequatelydocumentedorexplainedtransfers,especiallythosewhichinvolvesponsoredprojectswithoverrunsorunexpendedbalances.

Inappropriatetransfersmayresultinexpendituresbeingdisallowedand/orsubsequentreductioninfundingbythesponsoringagency.Alsoabuseofcosttransfersmayresultinmoreseveresanctions,fines,penaltiesandauditcriticismsappliedagainsttheUniversity.

GENERAL

FSU'sPolicyonDirectandIndirectCostsdescribesthecriteriaforchargingcoststoasponsoredproject.Thesecriteriaandproceduresshouldbeunderstoodbyallpersonshavingfinancialresponsibilitiesrelatingtoasponsoredproject.Itisrecognized,however,thatoccasionallyitmaybenecessarytotransfercoststosponsoredprojects.Carefulconsiderationofnecessityandproprietymustbeundertakenwhenconsideringtransferringcoststoasponsoredproject.

TheprovisionsofOMBCircularA-21specificallypermitsomecosttransferswhileothercosttransfersaredefinitelyimproperandunallowable.Both"proper"and"improper"costtransfersarediscussedingreaterdetailbelow.

ImproperCostTransfers

OMBCircularA-21(CostPrinciplesforEducationalInstitutions),SectionC.4.bstates:"AnycostsallocabletoaparticularsponsoredagreementunderthestandardsprovidedinthisCircularmaynotbeshiftedtoothersponsoredagreementsinordertomeetdeficienciescausedbyoverrunsorotherfundconsiderations,toavoidrestrictionsimposedbylaworbytermsofthesponsoredagreement,orforotherreasonsofconvenience."

Thisregulation(A-21)specificallydescribestransactionsthatwouldbeimpropercosttransfersbetweensponsoredagreements.Whileitisnotappropriatetotransferimpropercostsasspecificallydescribedintheregulationbetweensponsoredprojects,itmaybepossibletorequestacosttransferfromasponsoredprojecttoanotherbudgetentity(i.e.,departmentalE&GorSRADbudget).Furtherdiscussionofthistopicappearshereinundertheheadingof"proper"costtransfers.

Thefollowingexamplesillustrateimproperandunallowablecosttransfersbetweenortosponsoredprojects:

•Whenthetransferisforthepurposeofutilizingunexpendedfunds.

•Whenthetransferisforthepurposeofavoidingoralleviatinganoverexpenditure.

•Whenthetransferisforthepurposeofmovingacostthatisunallowableononeprojecttoanother.

•Whenthetransferisforthepurposeofcircumventingawardrestrictions.

•Whenthetransferisforthepurposeofreimbursingatemporary"loan"offundsfromanothersponsoredproject.ReferencethePolicyonAdvancesat

ProperCostTransfers

Generally,A-21recognizestheneedtomakeacosttransferinvolvingasponsoredprojectineitherofthefollowinginstances:

•Whenthetransferrepresentsanadjustmentforanerroneouscharge.

•Whenthetransferisforthepurposeofassigningaportionofthecosttoasponsoredproject(splitpurchase).

Theseallowablecosttransferswillbediscussedingreaterdetailbelow.

PayrollCostTransfers(RetroactiveDistributionofFunding)

Asalarycosttransfermeansthemovementofpayrollexpenses(salariesandbenefits)fromonefundingsourcetoanother.ThedistributionofsalarychargesforUniversitypersonnelshouldbeareasonablereflectionoftheemployee’seffort.Salarydistributionsarebasedonpersonnelappointments.Carefulconsiderationmustbegiventopersonnelallocationstoensurethatsponsoredprojectsthatbenefitfromtheeffortarechargedproperlyattheoutsetandthatadjustmentsarenotrequired.Therefore,appointmentsshouldbereviewedonaregularbasis.PI’sanddepartmentrepresentativesareresponsibleforbeingfamiliarwithFSU’sCostSharingPolicyandProceduresandhowtheserequirementsmayaffectpersonnelappointments.Ifappointmentchangesareanticipated,anePAForpPAFshouldbesubmittedinaccordancewithHR’spublisheddeadlinesandprocedures.

InthecaseswherechangesinfundingwerenotanticipatedandresultintheneedtosubmitaRetroactiveDistributionofFundingForm(RDF),theRDFmustbereceivedbySponsoredResearchAccountingServiceswithin90calendardaysfromtheendofthemonthinwhichtheerroroccurredorwithin30calendardaysoftheexpirationdateforexpiredprojects. ShouldadifferenceinsalarydistributionandactualeffortbedeterminedduringtheFACETapprovalprocess,thentheRDFmustbesubmittedpriortoFACETapproval.

TheSponsoredResearchCostTransferJustificationFormmustbesubmittedwithallRDF’swherecostsarebeingtransferredtoasponsoredproject.SRASshalldeterminetheadequacyofthejustificationanddocumentation.

ThereshouldnotbeaninstancewhereanRDFissubmittedwhichwillchangethewayeffortwas

certifiedontheFACETReport.

Non-PayrollCostTransfers

Non-payrollcosttransfersmustbereceivedbySRASpromptlyaftertheerrorisdetectedbutinnoeventlaterthan90calendardaysfromtheendofthemonthinwhichtheerroroccurredorwithin30calendardaysoftheexpirationdateforexpiredprojects.

Examinationofthedepartmentalledgerinatimelyfashion(ataminimummonthly)bythePI(ordesignee)willpermitearlydetectionoferroneouscharges.Costtransferswhichrepresentcorrectionoferroneouschargesusuallyaretheresultofclericalorbookkeepingerrors.

AnExpenditureTransferJournalEntryFormshallbesubmittedinordertocorrectanerroneouscharge.Inaddition,theSponsoredResearchCostTransferJustificationFormmustbesubmittedwithallExpenditureTransferJournalEntryFormswherecostsarebeingtransferredtoasponsoredproject.Copiesofallrelevantdocumentationmustbeattachedtosupporttheexplanation(e.g.,requisitions,purchaseorders,explanatorymemoranda,etc.).SRASshalldeterminetheadequacyofthejustificationanddocumentation.

Split-FundedExpense

Aparticularexpensemayhavedirectbenefittomorethanoneactivity,e.g.,theexpensemaybenefitmorethanonesponsoredprojectoritmaybenefitasponsoredprojectandanotherinstitutionalactivity.

OMNIallowsmultiplelinesonapurchaserequisitionwhereeachmayhaveadifferentfundingsource,butitdoesnotallowonelinewithmultiplefundingsources. Thismeansthatdepartmentswouldalwayshavetosubmitajournalentrytodistributetheexpenseforasinglelineitempurchasetotransferaportionofthecosttothebenefitingactivities.

Incaseswhereitisappropriatetosplitthefunding,anoteshouldbeincludedontherequisitionorwithanexplanatorymemorandastatingtheintenttotransferaportionofthecosttootherbudgetsandidentifyingallfundingsources.

AnExpenditureTransferJournalEntryForm(Non-ConstructionProjects)mustbepreparedinordertotransfertheappropriateshareofthecost.Inaddition,theSponsoredResearchCostTransferJustificationFormmustbesubmittedwithalltransferrequestswherecostsarebeingtransferredtoasponsoredproject.Copiesofallrelevantdocumentationmustbeattachedtosupporttheexplanation,e.g.,requisitions,purchaseorders,explanatorymemoranda,etc.

CosttransferrequestsofthisnatureshouldbereceivedbySRASshortlyaftertheinitialpaymentbutinnoeventlaterthan90calendardaysfromtheendofthemonthinwhichtheerroroccurredorwithin30calendardaysoftheexpirationdateforexpiredprojects.

CostTransfersReceivedafterReceiptDeadlines

CosttransferrequestsorRDF’sreceivedafterthedeadlinesspecifiedabovewillbeprocessedonlyinextenuatingcircumstances.ExtenuatingcircumstancesDONOTincludeabsencesofPIorresponsibleadministrator,norshortageorlackofexperienceofstaff.ItistheresponsibilityofthedepartmentandthePItoensuretheavailabilityofqualifiedstafftoadministerandexercisestewardshipoverfederally-fundedprojectsinaccordancewithfederalpoliciesandregulations,includingthoserelatingtoregularmonitoringofexpendituresandtimelycorrectionoferrorsandreallocationofexpenses.

Thereasonsforrequestingandsubmittingacosttransferafterthedeadlinesspecifiedabovemustbedocumentedindetailandwillrequirethesignatureoftheprincipalinvestigator,chairanddean.Forsponsoredprojects,finalapprovalshallbemadebySRAS. SRASwillnotapprovethetransferunlessitiscompliantwithallapplicablerulesandregulations.

NOTE:Anyimpropercostchargedtoasponsoredprojectmustberemovedfromthesponsoredprojectregardlessofwhentheerrorisdetected.Incaseswhentheerrorisdetectedafterthelimitsofthiscosttransferpolicyandtherearenotextenuatingcircumstances,thecostscanonlybemovedtoanon-sponsoredaccount.IfSRASbecomesawareofaninappropriatechargeonasponsoredproject,thedepartmentwillbenotifiedtoinitiateatransfertoanon-sponsoredaccount.Ifthistransferisnotinitiatedwithinfive(5)workingdaysfromdateofSRASnotificationtothedepartment,SRASwilltransferthechargetoanappropriatedepartmentalorPISRADaccount.

IssuesRelatedtoCostTransfers

Thesituationsdetailedbelowareoftenencounteredintheadministrationofsponsoredprojects.Thepropertreatmentofthesesituationswillgenerallyprecludetheneedforcosttransfers.SponsoredResearchServicescanprovideguidanceandassistancewhentheseissuesarise.

AdvanceorPre-awardCosts.Fortheeffectiveandeconomicalconductofasponsoredprojectitissometimesnecessaryforcoststobeincurredpriortoreceiptoftheawarddocumentandactualfunding.Insuchcases,departmentsshouldrequesteither(1)anadvanceinaccordancewithFSU’sPolicyonAdvancesforExternally-FundedProjectsandInitiatingWorkwithoutanAward,and/or(2)preawardcostauthorityiftheawardwillbesubjecttoFederalDemonstrationProjectTermsandConditions.

Theadvanceorpreawardbudgetnumber(ProjectID)willbecomethepermanentprojectnumberwhentheawardiseffectiveandnocosttransferswillberequiredornecessary.

ContinuationCosts.Ifacontinuationawardisanticipatedaftertheenddateoftheproject,costsmaycontinuetobechargedtothecurrentactivecostcenterifapprovedinaccordancewithFSU’sPolicyonAdvancesforExternally-FundedProjectsandInitiatingWorkwithoutanAward.

Close-outofSponsoredProjectCostCenters.Principalinvestigatorsanddepartmentaladministratorsoverseeingsponsoredprojectsshouldbeparticularlycarefultomanageandmonitortheirexpensestoavoidincurringcoststhatarenotallowable,allocableandreasonable.Principalinvestigatorsanddepartmentaladministratorsshouldreviewtheawardagreementand/orcontactSponsoredResearchAccountingServicesiftheyareuncertainabouttheallowabilityofacertainexpensepriortochargingthesponsoredproject.

Ifunallowablecostshavebeenincurred,theymustberemovedfromtheprojectandchargedtoanappropriateaccountfollowingtheprocedurespreviouslyoutlined.Generally,costsincurredbeyondtheprojectenddatearenotallowable.Ongoingcorrectionsofincorrectlychargedexpensesarehighlypreferabletoadjustmentsinthelastfewweeksofthesponsoredagreement,althoughchronicand/orinordinatelyfrequentcorrectionswillbescrutinized.

Unexpendedbalances.Itisimpropertotransfercoststoasponsoredprojectforthesolepurposeofusingunexpendedsponsoredfunds.Unexpendedsponsoredfundsmust,inmanycases,bereturnedtothesponsoratthecloseofaproject.Exceptionsmaybefixedpricecontracts,agreementsallowingcarry-forwardoffunds,andagency-approvedno-costextensions.ForclarificationofthetermsofaspecificsponsoredagreementcontactSponsoredResearch.

III. Legal Support, Justification, and Review of this Policy

OMB Circular A-21 and Fla. Stat. 1004.22.

These policies will be reviewed when changes are necessary.

Gary K. Ostrander, Vice President for Research

August 1, 2014