ORS Brown Bag Sessions

1. ORS Brown Bag Sessions Journal Entry – G&C Cost Transfers

2. 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

3. Cost Transfers & Timeliness • Penn 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.

4. Documentation of Cost Transfers • All 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

5. Cost Transfers - Historically • Cost 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

6. 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.

7. New Responsibility – New Categories • Authorized 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

9. Category 16 G&C OV90 • When 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

10. Category 16 G&C OV90 cont’d • Upon 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.

11. Access • Access 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

12. Training Requirements

13. Resources / Help • Office of Research Services • http://www.upenn.edu/researchservices/ • Office of Research Support Services • http://www.med.upenn.edu/orss/ • Ben Knows • http://www.finance.upenn.edu/benknows/ • Financial Policies • http://www.finance.upenn.edu/vpfinance/fpm/