ORS Brown Bag Sessions

Journal Entry – G&C Cost Transfers

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What is a Cost Transfer?is defined as the moving of an expense to a sponsored

project when the expense was initially charged to another project or non-sponsored account (Financial Policy #2113)

Payroll not included in definition of cost transfers (in most cases)

Cost Transfer Principles Need occur in a timely manner Need to be allowable under Sponsor & University Policy Need to include adequate description of purpose for

entry along with appropriate DOCUMENTATION C/T may not be used as a means of managing cash flow

Cost Transfers & TimelinessPenn Policy (Financial Policy #1402) requires a

review of all transactions on a monthly basis.

Cost Transfers are expected to be completed within 90 days of the month end in which the original transaction occurred (DHHS require 90 days from original trans date)

PI responsible for approving all transfers & ensuring timeliness.

Any cost transfer (debit or credit) processed after the 90 period referenced above – requires ORS approval.

Documentation of Cost TransfersAll Cost Transfers must be supported by

appropriate documentation: Full explanation of circumstances under which the error

occurred Explanation of direct benefit to the new funding source Original source documentation for transaction (invoice, c-

368, etc.) Documentation of PI approval Corrective action plan (as necessary)

Journal descriptions stating “to move to correct fund” or “to correct error” are inappropriate

Cost Transfers - HistoricallyCost Transfers have always been an area of review and

focus by central admin However, proper tools were not always available for proper

recording and tracking of transfers.In the past, cost transfers were typically processed via

J/E General 02 Adjust Previous Transaction or 07 Grant and Contract Adjustment, however there was no validation with respect to timeliness of cost transfer

Annually UPENN would be have an A133 audit conducted and cost transfers would be part of the audit process.

Cost Transfers have been identified as “findings” within prior University A133 audit(s). Details of findings include: lack of documentation, violation of

timeliness per University policy

New Responsibility in BEN

On July, 1, 2010 an additional BEN Financial Journal Entry Responsibility titled Journal Entry – G&C Cost Transfers was introduced to improve monitoring, tracking and compliance with the University's Cost Transfer Policy #2113.

As of July 1, 2010, Journal Entry – General category 02- Correct Previous Transaction & category 07 – G&C adjustment were no longer to be used for sponsored project (5-fund) cost transfers.

New Responsibility – New CategoriesAuthorized users are to prepare cost transfers for

sponsored project account (5 fund activity) using Journal Entry – G&C Cost Transfers under the following categories:15 G&C UN90 – select this when entering C/T within 90

days of the month end of original transaction date and original transaction occurred within BEN system

16 G&C OV90 - select this when entering C/T that exceeds 90 days of the month end of original transaction date and original transaction occurred within BEN system

17 UPHS Gds/Svs – select this when processing a UPHS goods and services transfer to a 5-fund and original transaction occurred within UPHS system

18 UPHS Payroll - select this when processing a payroll transfer to 5-fund and original transaction occurred within UPHS system

Category 16 G&C OV90When using Category 16, the information below must

be submitted to your ORS Desk Accountant via email:Type in Subject line:

Category 16 Cost Transfer : Fund #, PI, Award/Grant Ref #

Include/attach following supporting documentation: Journal Batch Name of Cost Transfer Full explanation of the circumstances under which the error

occurred Reason for the delay in correcting the error Explanation of direct benefit to the new funding source Original/source documentation for the transaction (invoice,c-

368,etc) Documentation of PI approval

Category 16 G&C OV90 cont’dUpon receipt of the email, ORS will review the

supporting documentation and respond within 5-7 business days

If all documentation submitted is completed and adequate ORS will post the appropriate journals(s) For any journal entry which requires additional information or

is deemed inappropriate, ORS will send an email requesting an adjustment or the deletion of the journal entry. Cost transfer journal entries not approved by ORS should be deleted

promptly by the originating Department.

AccessAccess to Journal Entry – G&C Cost Transfers is

granted by completing the following:

BEN Balances – Manual Journal Entry instructor led training

BEN Balances: Journal Entry – Grant and Contract Cost Transfers on-line training curriculum (2 Parts)

G&C Cost Transfers Knowledge Building G&C Cost Transfers Application Training

BEN Financials eForms

Training Requirements

12

Access Requirements

BEN Balances – Manual Journal

Entry

BEN Balances: Journal Entry – Grant and

Contract Cost Transfers

BEN Balances: Journal Entry –

Grant and Contract Cost

Transfers

Instructor Led Training

Knowledge Building

Application Training

New User

Existing Journal Entry - General User

Resources / Help

Office of Research Serviceshttp://www.upenn.edu/researchservices/

Office of Research Support Serviceshttp://www.med.upenn.edu/orss/

Ben Knowshttp://www.finance.upenn.edu/benknows/

Financial Policieshttp://www.finance.upenn.edu/vpfinance/fpm/