HOW TO OBTAIN APPROVAL OF A JOURNAL ENTRY
Any journal entry which debits and/or credits a sponsored research PTAEO account must be forwarded to staff in OSP for prior approval and submission.
There are some exceptions to this policy of Journal Entries:
- Service or recharge centers charging multiple accounts for services and/or merchandise are not required to send those journal entries to the Office of Sponsored Projects for approval prior to processing. The entries may be sent directly to the Controller's Office.
- Those departments that are not service or recharge centers, but do charge out to multiple accounts in multiple departments the costs of services, (such as copying, the cleaning of glassware, or the purchase of merchandise), are not required to send those journal entries to the Office of Sponsored Projects for approval prior to processing.
Cost Transfers: Cost transfers are non-payroll transactions that move funds from one account into another account. They differ from journal entries in that cost transfers may be initiated after the fact, but within 90 days of incurring the expense. The transfer of charges from other projects or programs to sponsored research awards is closely examined by auditors. Frequent, tardy or unexplained (or inadequately explained) transfers can raise serious questions about the propriety of the transfers and our accounting system and internal controls. The cost transfer form and system of approval signatures was developed to avoid audit questions regarding transfers.
DARTMOUTH COLLEGE COST TRANSFER POLICY
It is the policy of Dartmouth College that costs should be charged to the appropriate sponsored award when first incurred. However, there are circumstances where it may be necessary to transfer expenditures to a sponsored award subsequent to the initial recording of the charge.
To comply with allowability and allocability requirements of Office of Management and Budget (OMB) Circular A-21, it is necessary to explain and justify the transfer of charges to federal awards from other federal or non-federal accounts. Timeliness and completeness of transfer explanations are important factors in supporting allowability and allocability in accordance with the principles set forth in the Circular.
A cost transfer is a transfer of an expenditure from one account to another account. The transfer of charges from other projects or programs to sponsored research awards is closely examined by auditors. Frequent, tardy or unexplained (or inadequately explained) transfers can raise serious questions about the propriety of the transfers and the accounting system and internal controls. The cost transfer form and system of approval signatures was developed to avoid audit questions regarding transfers.
Additional Regulatory Requirements:
The NIH Grants Policy Statement (REV. 12/03, pp.83-84) suggests:
“Cost Transfers to NIH grants by grantees…should be accomplished within 90 days…The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee…An explanation merely stating that the transfer was made “to correct error"? to “transfer to correct project�? is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42 (record retention requirements) and must make it available for audit or other review…Frequent errors in recording costs may indicate the need for accounting system improvements and/or enhanced internal controls. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s)."?
How to Initiate a Cost Transfer: All requests for a transfer of costs on Sponsored Research accounts should be on a “Dartmouth College Cost Transfer Request for Sponsored Activities"? form for non-payroll expenses. Transfers involving "accounts" submitted on Journal Entries will be returned to the originator. The general guidelines for initiating a cost transfer are as follows:
Initiate the cost transfer as soon after the original charge was made.
Filling out the Cost Transfer Request for Sponsored Activities form:
Prepared by and Date Prepared:
These sections should reflect the person filling out the form and the date in which the form was filled out.
The transaction line on the cost Transfer Form should include:
- The date of the original transaction (date hit in OGA)
- Account number and expenditure type/natural class originally debited/credited
- Transaction description that appears in OGA for that particular
- Reference number
- Amount
- Account and expenditure type/natural class to be charged
All of the relevant questions on the form must be adequately answered as follows:
- Why was the transaction(s) originally posted to the account from which it is now being transferred?
- Why should the transaction(s) be transferred to the proposed account to be charged? How does this transaction benefit the project?
If transfer request is over 90 days from the date of the original transaction please answer these questions:
- Why is the transaction(s) being transferred more than 90 days after the original date the transaction was recorded?
- What corrective action has been taken to eliminate future need for cost transfers of this type?
The form must be signed and approved by:
- The Principal Investigator (If the transfer involves more than one sponsored research account, Principal Investigator for each sponsored research account must sign the form)
- Dean/Executive Officer
- Office of Sponsored Projects
Attachments: Please attach copies of original transaction documentation (i.e. invoice, procard receipt, etc.)
IMPORTANT NOTE:
Explanations such as "to correct a clerical error" or "to transfer to correct project" are not adequate. Transfers of costs from one budget period to the next solely to cover cost overruns are not acceptable. Generally, the older the charge the more involved the explanation of the transfer should be.
Please inform Procurement Services of any account number changes via Blitzmail or Hinman Mail of any Cost Transfers of equipment purchases (subcodes 260-267).
COST TRANSFER EXAMPLES
Situation #1
During the period of transition between sponsored research awards some charges that should have been placed on the new sponsored research award year ended up being charged to the old sponsored research award year.
Justification
Authorization is requested to transfer the cost of supplies to the appropriate sponsored research award. The transferred supplies were purchased at the end of old sponsored research account but are actually being used on the new sponsored research account. This action will enable the costs to fall on the proper account for the research being performed.
Situation #2
Some telephone charges were placed on a closed sponsored research account.
Justification
Authorization is requested to transfer telephone charges identified above to the appropriate sponsored research account. Ms. Smith's telephone charges were inadvertently placed on a closed sponsored research account instead of to her active sponsored research account.
Situation #3
Confusion over the appropriate sponsored research account to charge by staff.
Justification
Two sponsored research accounts represent two proposals awarded simultaneously to the same Principal Investigator. Both sponsored research accounts share the same support staff; the awards and their respective numbers were inadvertently reversed by staff members. The resulting errors are being corrected by cost transfer.
Cost Transfer Forms to Use: All requests for a transfer of costs on sponsored research accounts should be on the "Cost Transfer Form" for non-payroll expenses.
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