Federal regulations require written or documented justification for any expense transfer or reassignment to or from a federally funded project, even if the cost was initially placed against another grant (for the purposes of this document grant means grant, contract, or other award). The regulations recognize that record-keeping errors will occur, but that they should be identified and corrected promptly. Therefore, it is essential that Principal Investigators (PIs) be provided with accounting information regularly (i.e. monthly but no less frequently than quarterly) to identify transaction posting errors.
The government expects that a recipient’s financial system is predicated on the principle that the initial assignment of a cost is in direct relationship and benefit to the activity to which the expense is initially charged. An auditor will assume that any correcting entries, after the initial cost assignment, must be the result of some form of error. Errors in initial coding must carry some form of explanation and as time lapses require increased levels of justification and documentation.
Cost transfers that have the effect of reducing costs assigned to a grant that is in deficit may be particularly difficult to justify or approve.
All direct costs charged to grants and contracts must be allowable under the terms of the agreement, reasonable in relation to the cost and benefit derived, and necessary for grant and contract completion. Cost transfers will be reviewed by Sponsored Projects Services (SPS) for compliance with the terms of award and other applicable regulations, such as the Office for Management and Budget (OMB) Circular 2 CFR Part 200: Cost Principles for Educational Institutions.
Cost Transfers are done by either Journal Voucher (JV), PHAREDS (electronic version of PAA-only accepted during open payroll quarter), or Payroll Accounting Adjustment (PAA) (approved by Post Award Sponsored Projects Administrator or SPA). http://baowww.uoregon.edu/forms/paa.pdf
*Allowable means compliance with OMB Circular 2 CFR Part 200 Cost Principals; is within the project period; is not prohibited by law or statute, etc.
TIMING OF JV SUBMISSION AND JUSTIFICATION REQUIREMENTS
Timeliness of Transfers:
Items to Consider when Processing Cost Transfers:
STANDARDS FOR GRANT JV PREPARATION
Date of transaction (FIS posting date of expense)
Types of Cost Transfers:
Cost transfers are NOT appropriate:
Facilities and Administrative Costs (F&A, formerly known as Indirect Costs)F&A costs are those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity (OMB Circular 2 CFR Part 200, section E.1). F&A Costs are necessary expenses for the maintenance of an environment that is conducive to research.
The University of Oregon (UO) periodically negotiates the Facilities and Administrative rate with our Cognizant Audit Agency-U.S. DHHS (Department of Health and Human Services). The negotiated rate is based upon a review of the university’s costs and assessments, and the reasonableness of the charges. To read further on factors reviewed during the F&A negotiation process, see OMB Circular 2 CFR Part 200, section F1.
Sponsored Projects Services
November 24, 2014
677 East 12th Ave, Suite 500
Eugene, OR 97401
VOICE (541) 346-5131
FAX (541) 346-5138 *
Sponsored Project Services
5219 University of Oregon
Eugene, OR 97403-5219
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