Policies and Procedures

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Senior Associate VP & CFO
Front Desk - (405) 271-2376

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Front Desk - (405) 271-2177

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Front Desk - (405) 271-2118

Salary Cost Transfer

Thursday, September 5, 2019

Sponsored Program Salary Cost Transfer

A. Purpose

OUHSC receives substantial funding from the federal government and other sources in the support of sponsored programs. Office of Management and Budget Uniform Guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires recipients of federal funding to maintain a system that documents and supports individual distribution of activities and associated payroll charges to sponsored agreements. OUHSC applies these standards to all sponsors through the Time and Effort Report system which is driven by salary information recorded in the University’s payroll system.

In accordance with OMB Uniform Guidance, whenever it is apparent that a significant change in work activity that is directly or indirectly charged to sponsored agreements will occur or has occurred, the change will be documented on the Time and Effort Report and a cost transfer will be submitted to correct the payroll in the general ledger.

B. Covered Parties

These guidelines apply to all individuals with salaries and wages supported by sponsored awards.

C. Definitions

Effort: Effort is the time spent on any University activity by an individual, expressed as a percentage of the individual’s Total University Effort (excluding PPP, one-time payments, and administrative supplements).

Effort Certification: Effort Certification is the certified affirmation by the individual completing each Time and Effort Report that the percentages of effort reported on the form are accurate and reasonably reflect their professional activity during the reporting period.

Cost Transfers: Cost transfers are the reassignment of expenses to or from sponsored projects after initially being charged to a separate funding source.

Salary Adjustments: Salary adjustments are the transfer of payroll expenses to or from sponsored projects after initially being charged to a separate funding source.

D. University Guidelines

Principal Investigators and Department Administrators should ensure charges to sponsored projects are accurate and in accordance with direct charging practices described in OMB Uniform Guidance and university policy. On a monthly basis, the Department Administrator should run financial queries and reconcile each sponsored project. The administrator should work with the PI to review these reconciliations to identify legitimate errors.

Salary adjustments are allowable if they are initiated to correct such errors, made on a timely basis and include appropriate justification and supporting documentation. Moreover, the costs being transferred must be allocable to the award the charges are being transferred to, if applicable.

The University’s records must contain appropriate documentation supporting an adequate evaluation of the transfer. The results must be accurate and complete. Frequent, tardy, or inadequately explained transfers, especially when they involve accounts with cost overruns, raise questions about the appropriateness of the transfers themselves, as well as the overall reliability of our accounting system and internal controls. As such, all salary adjustments involving sponsored projects must be reviewed and approved by Grants and Contracts Accounting.

E. Processing Salary Adjustments

When submitting a Salary Cost Transfer in the PeopleSoft bolt-on the following principles must be followed:

  • Exclude the fringe calculation in the adjustment amount
  • Requests for transfers in excess of 90 days from the original transaction date require additional documentation and approval as noted below

All salary transfers must be properly documented in the PeopleSoft Cost Transfer bolt-on and must include the following information:

If within 90 days of the original transaction date:

  • Justification supporting the necessity of the transfer.
  • A detailed explanation of what caused the error and how it was discovered. An explanation that states “to correct a clerical error” or “transfer to correct grant or contract” is not sufficient.

If in excess of 90 days of the original transaction date: In addition to the information listed above, the following is necessary:

  • The reason for the delay in processing the adjustment.
  • Identification of the controls that will be implemented or what action has been taken to ensure the error does not occur again.
  • Approval by the Principal Investigator.

All Salary Cost Transfers are reviewed along with all supporting documentation and may be rejected or approved by Grants and Contracts Accounting on an exception basis. A common exception involves the set-up of a sponsored program source with an award date occurring in the past, also known as a “late award.” When appropriate, the department is encouraged to request an advance account (ECAV) to ensure charging is allocated to the appropriate funding source.

Salary transfers made simply to “spend down” a sponsored project with available funding or to meet deficiencies caused by overruns or other fund considerations will not be approved. Transfers from sponsored program sources to unrestricted accounts (e.g.: departmental budgets) will always be allowed and must be completed in a timely manner to ensure accurate reporting to sponsors.

F. Effort Confirmation

Time and effort confirmation is a requirement for sponsored projects that include salary expenditures.  Salary cost transfers will impact the effort calculation and should be completed in a timely manner.  Salary cost transfers should not be submitted once an effort confirmation has been completed.

G. Related Policies and References

OMB Uniform Guidance
NIH Policy Manual

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