Contracts and Grants Accounting

LATE PAYROLL COST TRANSFERS ONTO FEDERAL FUNDS EXCEPTION REQUEST PROCESSING PROCEDURES

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  1. Overview
  2. Criteria
  3. Requirements and Forms
  4. Responsibilities and Process

1. Overview

Payroll cost transfers onto federal and federal flow-through funds after 120 days* from the ledger month end date are considered untimely and cannot be processed in the campus payroll system (OPTRS). UC Business and Finance Bulletin A-47 (PDF) requires expenses being transferred to federal or federal flow-through funds be recorded in the general ledger within 120 days from the close of the month in which the charge posts to the ledger. Transfers made after the 120 day period could be considered non-compliant with University policy and therefore may be deemed unallowable by federal auditors.

In rare and unusual situations, departments can request an exception for a late payroll cost transfer from the Controller, or authorized designee, who will evaluate the exception request based on established criteria. Exceptions will rarely be granted. Departments must correct any inappropriately recorded charges on federal funds regardless of timeliness.

2. Criteria

Approval of requests for late payroll cost transfers will be rare and only granted in unusual and unique circumstances that result from actions outside the control of the originating department. If granted, this approval does not relieve the originating department from the financial responsibility for the untimely recognition of these expenses. If disallowed by the federal agency, the originating department will be held responsible for any costs and penalties resulting from the disallowance.

In general, the following situations will be considered for an exception:

  • Transfers resulting from late notification of award by the sponsor when a fund advance would not have been possible. Fund advances should be used whenever possible.
  • Transfers resulting from an unanticipated change to the fund number on a multiple year award.
  • Corrections to chartfields other than fund [i.e. Account, Dept, Program, ChartField1, or ChartField2.]

Exceptions will not be granted in the following situations:

  • Failure of staff to prepare transfers in a timely manner.
  • Failure of Principal Investigators to inform department administration of needed transfers.

3. Requirements

To request an exception, the originating department must submit the following:

The exception request must be approved as outlined in the Responsibilities and Process section below. After the required approvals are obtained, submit the scanned packet as an attachment via e-mail to the Compliance Unit of Contracts and Grants Accounting at CGAhelp@berkeley.edu.

4. Responsibilities and Process

The Principal Investigator (PI) and originating department are responsible for actively managing the award, identifying transactions that require correction, executing required cost corrections in a timely manner, and assembling the late payroll cost transfer exception request when necessary. The PI of the fund receiving the debit must approve the exception request.

The expense transfer documentation must contain the reason for the transfer, the benefit to the project being charged, and the reason the expense was not originally charged to the appropriate fund. If the amount was not transferred in its entirety, include a statement explaining the allocation methodology. The originating department is the department of record for the documentation, request, and decision.

The Dean or Vice Chancellor reviews and endorses or denies exception requests prior to routing to CGA. The Dean or Vice Chancellor may delegate this authority to Department Chairs or Unit Directors. This authority may not be redelegated. A copy of the written delegation from the Dean or Vice Chancellor must be submitted to the CGA Compliance Unit. It is suggested that delegations be made to the position (i.e. Chair or Director) rather than the individual holding the position.

Contracts and Grants Accounting is responsible for processing exception requests which includes tracking the request, communicating the decision on the request, and processing payroll transfers for approved requests.

The Controller or designee reviews and approves or denies exception requests. The decision of the Controller or designee is final.

The CGA Compliance Unit will communicate the exception decision via e-mail to the PI and the administrative contact indicated on the request form. The CGA Compliance Unit will process payroll cost transfers for all approved exception requests. Approved exception requests will be processed within 20 business days from receipt of the complete request.

Requests that indicate an expense should be moved off a federal fund are considered a declaration that the expense currently on the federal fund is inappropriate. Therefore, if such a request is denied, CGA will transfer the expense crediting the federal fund and debiting fund sources using the hierarchy of funds detailed in the Campus Policy on Deficit Resolution (PDF) under "Consequences of Not Resolving the Deficit".

As part of normal departmental responsibilities, the originating department reviews and reconciles the approved payroll cost transfer transaction via the ledger once the monthly ledger is final. The originating department is the department of record for all documentation.

The originating department will be held responsible for any disallowance, fine, or penalty resulting from negative audit findings related to any payroll transfers processed as a result of an exception request.

Questions about this process can be addressed to the CGA Help Desk at CGAhelp@berkeley.edu or 643-4246.



*120 days are calculated as calendar days from the close of the month in which the charge posts to the ledger. A July 2010 payroll expense has a ledger date of July 31, 2010 – 120 calendar days from this date is November 28, 2010. Payroll is processed within cycles; therefore, transfers must be completed in a pay cycle that has an end date on or before November 28, 2010 (the SM cycle ending November 15, 2010 in this example). See a Reference Calendar for the 120 Day Calculation.
Effective date: July 1, 2010