A direct retro transaction in UCPath is considered high risk and subject to additional, conditional workflow routing if it meets one or both of the following conditions:
- Violates the 120 Day Rule
- Increases the expense on a federal or federal flow-through fund where the original Pay End date on a payroll transaction is prior to [SysDate - 120]
- Violates the 90 Day Rule
- Increases the expense on a federal or federal flow-through fund where the fund or Grant End date is prior to [SysDate - 90]
- SysDate is the date and time the salary cost transfer is processed
To comply with UC Business and Finance Bulletin A-47, OMB Uniform Guidance, and sponsor policies, cost transfers to federal or federal flow-through funds should be made within 120 days after the original transaction posts to the ledger. Transfers made after the 120 day period could be considered non-compliant 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. The exception request will be evaluated against established criteria. Approval of exceptional requests is not automatic. Departments must correct any inappropriately recorded charges on federal funds regardless of timeliness.
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 ID, Program, ChartField1, or ChartField2)
Exceptions should not generally be due to the following situations:
- Failure of staff to prepare transfers in a timely manner
- Failure of Principal Investigators to inform department administration of needed transfers
The UCPath direct retro process will automatically calculate when a transaction violates one of the two date-based rules and will require the user to complete a series of questions to justify the late transfer. The following justification methods may be used:
- Response to the UCPath questions on the direct retro page and inclusion of the PI’s approval specific to the cost transfer transaction
- Other departmental late payroll cost transfer justification form with PI approval specific to the cost transfer transaction
- Any communication and/or emails related to the departmental late payroll cost transfer uploaded along with the PI's approval specific to the cost transfer transaction
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 providing the late payroll cost transfer justification when necessary. The award PI of the fund receiving the debit must approve the exception request, the approval cannot be delegated, and the approval must also be specific to the cost transfer transaction.
The expense transfer justification 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, please include a statement explaining the allocation methodology. The originating department is the department of record for the documentation, request, and decision.
Contracts and Grants Accounting is responsible for processing high risk direct retro transactions in UCPath, which includes reviewing the request, ensuring appropriate justification and approval is provided, and approving the transaction in the system.
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 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 510-643-4246.