OMB
Circular A-110, Uniform Administrative Requirements for Grants and Agreements
With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations
Contact: Contracts
& Grants Accounting at (949) 824-8190
A. Responsibility and Accountability
The responsibility for compliance with federal costing guidelines and for maintaining
supporting documentation for cost transfers is centered in the originating department/unit.
Principal Investigators, and those to whom authority to approve cost transfers is delegated,
are responsible and accountable for compliance with federal criteria that govern cost transfers:
allowability
allocability
reasonableness
compliance with the general principles and the provsions of the research agreement
Factors also applying to cost transfers (see Section 701-15) include:
timeliness
relatedness
consistency
Responsibility also means that audit-derived disallowed costs (including the transfer and portion of the disallowance extrapolated to the campus) will be borne by the unit(s) that caused them.
B. On-Line Transfer of Expense
Authorized individuals can initiate a non-payroll expenditure adjustment/transfer
of expense for contracts and grants using the on-line Transfer
of Expenditure (TOEB) and electronically approve and send the cost transfer
directly to the Financial System without prior review by Contracts and Grants
Accounting.
C. Delegation and Training
Contract and grant cost transfers must be approved by an employee within
the academic unit who has been delegated such authority. A Delegation
of Authority to electronically approve cost transfers to someone other
than a Principal Investigator, Dean, Director, or Department Chair, must be
in writing. The signed original Delegation of Authority is sent to Contracts
& Grants Accounting.
Individuals preparing and approving on-line transfers of expense for contracts
and grants must attend a training session presented by the Accounting Office
prior to utilization of the on-line Financial
System.
D. Documentation and Retention
Academic departments/schools, rather than Contracts and Grants Accounting,
are the "department of record" for documentation in support of contract and
grant cost transfers. Retention periods are specified in the UC
Records Disposition Schedules Manual for contract and grant records.
All documentation, including justifications and certifications related to
the cost transfer, are maintained by the originating department and must be
made available for post-authorization review. Prior to preparation of an on-line
transfer of expense, written approval by the Principal Investigator and/or
Chair must be obtained for cost transfers that:
involve a change in decision
were not prepared in a timely manner
may be considered suspect in an audit.
This approval is maintained by the originating department as certification
for the cost transfer.
All cost transfers must be supported by documentation that specifically
references the fund that benefited from the goods or services. Examples of
original documentation are:
purchase requisitions
purchase orders
invoices
storehouse orders
travel vouchers
logs or records of high volume low-value charges with an acceptable
distribution method (telephone costs, photocopy charges)
job time and attendance records
personnel activity reports (PAR).
This documentation is maintained in the originating unit.
E. Separation of Control
On-line transfers of expense, submitted for contract and grant funds, require
electronic notification from Contract and Grants Accounting to the Principal Investigator,
Assistant Dean/Business Officer, or designee. This person should be listed on
Table C of Administrative Computing Services' Request for Access
to Financial Systems form.
F. Post Authorization Reviews
At the end of every month, two types of review are performed by Contracts and Grants Accounting. Activity
identified in these two reviews will be assessed as to the appropriateness of the transfer and the adequacy
of the supporting documentation. Blanket recertification of non-payroll expense documents (e.g., correction of a fund number on original documents,
such as a departmental time sheet or purchase requisition) is not acceptable to
Health and Human Services (HHS) officials, when done in an untimely manner and/or at termination of a
fund with an unexpended balance or overdraft. Such documentation appears to support the
original charge rather than the transfer.
The first review will be extensive and will focus on the transactions and
explanations for cost transfers that were:
prepared four or more months after the original ledger date
prepared within two months immediately before the project end date
prepared after the project end date
previously moved as a cost transfer
affecting individual funds with overdrafts
affecting unexpended balances for budget or award periods terminating
within the last two months.
The second review will involve a random sample taken from all other cost
transfers.
Review procedures for selected cost transfers include:
Contracts and Grants Accounting notifies the preparer and/or
approver of the cost transfer that will be reviewed for appropriateness
and/or supporting documentation.
The review is normally completed within 1-2 weeks. Priority
will be given to transfers that occur at or after a project end date.
(Note: Financial status reports are based on information in the
second month's general ledger after the termination date of the award.
It is the responsibility of the department to notify Contracts and Grants
Accounting of cost transfers prepared after the second month's general
ledger.)
The review may involve:
a request to forward a copy of the documentation to Contracts and
Grants Accounting
a visit to review the documentation at the department site
phone conversation
e-mail exchange
any other process that provides sufficient information to validate
the cost transfer.
If the documentation is not submitted or if the cost transfer is judged
on a preliminary basis to be inappropriate under the given circumstances,
and/or is not adequately supported by documentation, Contracts and Grants
Accounting will:
1) Notify the preparer and approver of the cost transfer, the Business
Officer, and/or the Principal Investigator.
2) Provide a rationale for the tentative decision.
3) State a due date for a response that addresses why the cost transfer
should be considered valid. The due date may vary depending on such
variables as project end date and when in the project cycle the cost
transfer review occurs.
After receipt of the response, a final determination will be made on
the appropriateness and adequacy of supporting documentation. Cost transfers
that lack documentation or do not meet the standard for these criteria
will be reversed or transferred to an unrestricted fund source within
the originating unit.
When performing the post-audit reviews, Contracts and Grants Accounting
staff will also conduct random site-visits and review documentation maintained
at the department. The Accounting staff will work with departments to identify
the cause and recommend solutions for areas where accounting practices need
strengthening.