Late Cost Transfer Escalation Procedure for Federal and Federal Flow-Through Contracts & Grants
Cost Transfers which occur after 120 days (four general ledger cycles) from the original ledger month end date are considered excessively late. Transfers made after the 120 day period may be considered non-compliant with University policy and therefore deemed unallowable by federal auditors. Departments must assume the risk for these transfers if found unallowable during an audit. The escalation process for cost transfers to a Federal or Federal Flow-Through award will be used strictly for rare and unusual circumstances. In these circumstances, the request will be evaluated based on set criteria and approved by: Principal Investigator, Department Head/Chair, Extramural Funds Accounting Manager, Controller, and Vice Chancellor of Research. Departments must correct any inappropriately recorded charges on federal funds regardless of timeliness.
Approval of requests for late cost transfers to a Federal or Federal-Flow-Through fund source 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 disallowance, fine, or penalty resulting from negative audit findings relating to any cost transfers processed as a result of an escalation request.
In general, the following situation will be considered for an escalation:
Cost transfers resulting from late notification of award by the sponsor when a Request for Approval to Spend Funds (RAS) would not have been possible. A RAS should be used whenever possible.
Transfers with the following situations that do not fall under the escalation requirement:
Cost transfers between Accounts (as long as award # is the same) and Subs within the same Fund.
Cost transfer correcting Object Codes within the same Fund
Transfers from a Fund to a NON-Federal Fund source will be processed even after the 120 day limitation. The reason for the excessive tardiness should be documented, but an Escalation Memo is not required for transfers to a Non-Federal fund source.
Cost transfers resulting from an unanticipated change to the Fund number on a multiple year award. In this case, an Escalation Memo would not be required in order to help reduce the administrative burden of already having to perform numerous cost transfers if a fund number change was necessary during the mid-life of the award.
Transfers labeled as High Risk in the UCPath system because they are beyond 90 days from the End Date of the award are not subject to the Escalation procedures required for transfers over 120 days. These transfers will be evaluated on a case-by-case basis by the EMF Manager.
Escalations will not be granted in the following situations:
Failure of staff to prepare cost transfers in a timely manner. A department being short-staffed is not a valid reason to grant exception to UC policy.
Failure of Principal Investigators to timely inform department administration of needed cost transfers.
As part of normal departmental responsibilities, Principal Investigators and departments are responsible for actively managing awards, which includes reconciling their awards on a monthly basis, identifying transactions that require correction, executing required cost transfers in a timely manner, and assembling the late cost transfer escalation request when necessary. Questions about this process can be addressed to Tyler Clark, Extramural Fund Manager at firstname.lastname@example.org or call extension 3068.
To request an escalation to transfer to a Federal or Federal Flow-Through award after the 120 day (4 ledger cycle) period has passed, the originating department must complete the follow 3 steps:
1. The originating department preparing the Escalation Memo form is responsible to have it signed by the form Preparer, Principal Investigator, and Department Head/Chair (must go through approval process indicated in Sequential Order Section). Download the Escalation Memo
2. For Non-payroll transfers the originating department completes the UFIN form. Download the UFIN form. The TOE system will not process any transfer past 120 days, so any non-payroll cost transfer must be done on a UFIN. For Payroll transfers, the department completes a Direct Retro/Salary Cost Transfer in the UCPath system. Those deemed High Risk because they are transferring to a Federal or Federal-Flow-Through and are past the 120 Day (4 Ledger Cycle) deadline will also need to complete an Escalation Memo. The Escalation Memo can be attached to the document upload section of the Direct Retro or can be emailed to the EMF Manager directly. Please make sure to reference the Direct Retro number(s) on the Escalation Memo as well as a very detailed explanation and attach all relevant backup to the Escalation Memo.
- The originating department preparing the Escalation Form is responsible for obtaining additional signatures if multiple departments are involved in the cost transfer. The department receiving the charge is required to obtain the following signatures: the Principal Investigator, department/chair, or other academic official.
- The questions answered on the Direct Retro and/or UFIN must be a detailed justification for the expense transfer. It must answer ALL of the questions to be accepted for consideration.
3. Supporting Documentation is required and is to be attached to the form.
Sequential Order for Escalation Signature Form
All 120 Day Escalation Forms must be submitted in sequential order as indicated below (Steps 1-4). If the form is submitted out of sequence it will be returned to the originating department and denied. Resubmission will be required for consideration.
Originating department prepares the Escalation Memo and obtains all necessary signatures, which include the form Preparer, Principal Investigator, and Department Head/Chair.
Submit the 120 Day Escalation Form (along with relevant UFIN or Direct Retro) to the Extramural Funds Accounting Manager for review. If approved the escalation form will be routed to the Controller for review and approves or denies escalation requests. The Extramural Funds Accounting Manager is responsible for processing escalation requests which includes tracking the request, communicating the decision on the request, and processing cost transfers for approved requests.
The Controller or designee reviews and approves or denies escalation requests prior to routing to the Vice Chancellor of Research.
Vice Chancellor of Research reviews and endorses or denies escalation requests. The decision of the Vice Chancellor or designee is final.
On-Line Transfer of Expenses (TOE) Over 120 Days Due to Approval Process
If you have submitted a transfer of expense in the on-line TOE system, but it has been delayed in the approval process forcing the processing period past the 120 policy, use the following steps to complete the TOE:
- Do not submit the TOE electronically, it will be rejected.
- Access the original TOE submitted in the online system and print a copy which will reflect the audit trail.
- Prepare a paper UFIN120 and attach a copy of the TOE transfer.
- Submit the paper copy of the TOE to Extramural Fund Accounting for approval.
Note: If the original submission of a TOE is past the required 120 day time period, it is considered excessively delinquent and will NOW need to be escalated for review. Please refer to the procedures as noted in the Cost Transfer 120 Day Escalation Procedures section.