Welcome to Cost Transfer Policy

1. Welcome toCost TransferPolicy

2. Learning Objectives • Identify the key timing cut offs in the Cost Transfer Policy • Identify special categories of cost transfers • Describe the documentation needed for each timing cut off and for special category cost transfers • Understand acceptable and unacceptable extenuating circumstances as they apply to cost transfers

3. Definition • A Cost Transfer is… • A transfer to a federally funded sponsored account of a charge previously recorded elsewhere

4. Why do we Need a Cost Transfer Policy? • Federal regulations require that transfers to federally funded sponsored accounts be timely and properly documented (see OMB Circular A21 section C 4 (b)) http://www.whitehouse.gov/omb/circulars/a021/a021.html • To demonstrate that adequate financial controls are in place, cost transfers should be kept to a reasonable minimum

5. Why do we Need a Cost Transfer Policy-Cont. • Late, frequent, and inadequately explained cost transfers: • Suggest poor financial management • Lead to questions on the overall reliability of Harvard’s internal controls and accounting systems • Cause audit issues

6. Your Role & Responsibilities • How do you accomplish your responsibilities? • Enter accurate budgets using the Budget Tool • Project expenses • Monitor accounts using CREW to identify incorrectly charged or incorrectly allocated expenses • Read and become familiar with the Cost Transfer Policy http://vpf-web.harvard.edu/osr/managing/man_cos_transfer.shtml#policy

7. Process: The Big Picture Fax to OSR FAS team Fax to OSP Prepare online journal:out of balance Answer 1 and 2 Screenprint journal; saved but not posted Answer1 thru 4 Fax to Alan Long Do not transmit until you have approval OSP Fax Number, 617-496-2524Alan Long Fax Number, 617-496-5300

8. Process: The Big Picture When approved, OSP will send the form back to the department Retrieve saved journal, balance, screenprint, and post to G/L File journal and approved Cost Transfer Form

9. Timing • How to calculate the 90 calendar days • From the 15th of the month following the original transaction • Example: Original charge posted April 8th • 90 days counted from May 15th • Cost Transfer should be transacted on or before August 12th ( Day 90) • When correcting a previous CT • Use the original transaction date to calculate the dates

10. http://vpf-web.harvard.edu/osr/training.shtml

11. Requirements for Cost Transfers Under 90 days • Transferred by journal entry at departmental level • Accompanied by the Cost Transfer Explanation Form with questions 1 and 2 answered and signed as indicated • Journal explanation: “See related Cost Transfer Form” • Documentation sent to OSP for review and approval(detail listing with original transaction) • Returned to originator for posting to GL

12. Under 90 days Exercise 1.1 Would you approve the Cost Transfer handed out? If not, why not?

13. Requirements for Cost TransfersOver 90 days • Transferred by journal entry at departmental level • Accompanied by the Cost Transfer Form with questions 1 thru 4 answered and signedas indicated (Note:additional approvals required) • Attach supporting documentation (detail listings, action memos, award notices, etc.) • Documentation sent to Alan Long for review and approval and then to OSP for review and approval ONLY GRANTED IN EXTENUATING CIRCUMSTANCES

14. Extenuating Circumstances What are some examples?

15. Over 90 days Examples ofextenuating circumstances • Late issuance of an Action Memo (45 day limit!) • Reasons beyond the control of the requestor (supporting documentation required) • Late issuance of a notice of grant award (supporting documentation required) • Failure of another department to take action • e.g., payroll change request (supporting documentation required)

16. Over 90 days NOTextenuatingcircumstances • Absence of • Principal Investigator • Responsible administrator • Shortage of staff • Lack of experience of staff

17. Over 90 days Exercise 1.2 Would you approve the Cost Transfer handed out? If not, why not?

18. When is a Cost Transfer Form not required? • Cost transfersmade within the accounting period of the original charge • Cost transfers to correct transactions to invalid code combinations involving only • Org and/or root segment values • Cost transfers of aggregate expenses totaling less than $500 • No timing cutoff!!!!

19. Sub- activity Activity When is a Cost Transfer Form not Required-Cont. • Cost transfers between subactivities of the same activity having concurrent budget periods • Cost transfers between subactivities of the same activity not having concurrent budget periods as long as the award is under both expanded authorities and SNAP (year logic has been used) • Cost transfersto correct transactions to invalid code combinations • Involving the fund and/or activity and/or sub-activity segments Note: All other circumstances would require a cost transfer form

20. When is a Cost Transfer Form not Required-Cont. • Transfer of pre-award expenses charged to a department account • Routine allocation of service center charges (e.g., animal facility charges) Note: Only a journal is required if transacted within 90 days

21. Special Categories Exercise 1.3 Would you approve the Cost Transfer handed out? If not, why not?

22. Unallowable Cost Transfers Situations that DO NOT allow for Cost Transfers: • “Zeroing Out” accounts • Solve funding problems • Meet deficiencies caused by cost overruns • Balancing the budget • Shifting costs to avoid budget restrictions

23. Departmental Responsibilities Each department should: • Ensure compliance with the University Cost Transfer Policy • Enter cost transfer journals • Retain hard copies of all related documentation in accordance with applicable record retention regulations • Ensure that all personnel engaged in financial administration of federally funded accounts are familiar with the University Cost Transfer Policy http://vpf-web.harvard.edu/osr/managing/man_cos_transfer.shtml

24. OSP Responsibilities OSP will: • Be available to assist in interpretation and implementation of the University Cost Transfer Policy • Train in the application of the Cost Transfer Policy • Reviewcost transfers • Approvecost transfers

25. Questions