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Important Updates

Last Updated 6/2/2016

Update to the Effort Reporting Policy

The Office of Grants and Contracts has changed the way that bi-weekly, hourly employees certify their time, due to the new electronic web time entry in payroll.  Effective beginning with the certification period of January 2016-May 2016, all bi-weekly, hourly employees will be issued a Personnel Activity Report (PAR).  In the future, the bi-weekly, hourly PAR will be e-mailed to the Effort Coordinator along with the exempt employee PARs.  All PARs are due to OGCA within 30 days of the Effort Coordinator receiving the forms.  Also, if an employee is not available to sign the PAR, the form can be certified by someone who has 100% knowledge of the employee’s actual effort, such as the P.I. or supervisor.  Please see the updated Effort Reporting Policy on the OGCA website.

While it is rare to change effort prior to January 1, 2016 it could be determined that expenditures must be removed from a sponsored fund.  All changes to bi-weekly payroll incurred prior to January 1, 2016 will require amended timesheets.  Because bi-weekly employees certified effort via the timesheet prior to January 1, 2016 any change in that effort requires an updated, certified effort report, i.e. timesheet.  Changes to bi-weekly pay periods after January 1, 2016 can be accomplished via a PA form and if necessary, the effort report corrected according to the USA Effort Reporting Policy. 

Update to the Cost Transfer Policy

The Office of Grants and Contracts has updated the Cost Transfer Policy to include the accounting of cost share funds on sponsored agreements.  Cost accounting standards are applied consistently to project funds and cost share funds.  All Personnel Action Forms (PAs) that include a cost share fund are to be routed through the OGCA, regardless of whether there is a direct charge to the project fund. 

Also, when moving charges to or from a cost share fund, a cost transfer form is required. 

NOTE:  OGCA has updated the cost transfer form and instructions.  Please begin using the new form immediately.  Visit the OGCA website for the updated cost transfer form and policy.

Removing Expenditures from a Sponsored Fund at Closeout

Effective for projects with an end date of June 1, 2016 or after, all expenditures being removed from a sponsored fund during closeout will require a cost transfer request.  This includes:

1. Costs that are unallowable in nature,
2. Costs in excess of the award amount,
3. Costs that are incurred outside of the period of performance.

During the closeout process specific expenditures, or a portion of a single expenditure, must be removed via a cost transfer by the responsible department or college.  The responsible unit must prepare the cost transfer form, along with the PA or Expense Transfer, to obtain appropriate signatures and submit to OGCA for review and processing.  Note in the cost transfer justification whether the cost being removed from the sponsored fund is unallowable, in excess of the award amount (cost overrun), or if the cost was incurred outside the period of performance. 

Unallowable costs must always be removed.  This includes costs that are unallowable per relevant regulations and/or terms of the award.  Refer to 2 CFR 200 Subpart E for guidance on Cost Principles.

Costs exceeding the award amount must be removed from the overspent fund and tracked for F&A proposal purposes per 2 CFR §200.451 (….All losses are not allowable indirect (F&A) costs and are required to be included in the appropriate indirect cost rate base for allocation of indirect costs.)  OGCA will capture these costs using the activity code: CLSOUT on the college/departmental fund side of the entry and adjust our F&A proposals accordingly. 

Costs incurred outside the period of performance must be evaluated for proper treatment.  There are circumstances when the program is continuing to a newly established sponsored fund and transfer of expenditures from the old fund to the new is appropriate.  But, generally costs incurred outside the period of performance are not allowed to be transferred to an unrelated program.

When selecting expenditures to remove from a sponsored fund in an overspent status please take care to evaluate the allowability, reasonableness and allocability of the expenditure to the sponsored fund.  If during your review you determine unallowable costs exist take care to remove those costs in total.  Also remember to allow for the F&A expenditures that will automatically adjust based on direct cost expenditures removed. 

Regularly reviewing expenditures will diminish the need for cost transfers at a project’s end.  Begin planning for closeout of a sponsored fund approximately 90 days before the end of the period of performance.  Review the sponsored fund both for unallowable expenditures and for completeness of expenditures.  Remember that you can allocate expenditures, i.e. direct pays based on availability of funding.  Removing excess costs over authorized funding levels to another sponsored fund is not allowable per 2 CFR §200.451 which reads:

§200.451   Losses on other awards or contracts.
Any excess of costs over income under any other award or contract of any nature is unallowable. This includes, but is not limited to, the non-Federal entity's contributed portion by reason of cost-sharing agreements or any under-recoveries through negotiation of flat amounts for indirect (F&A) costs. Also, any excess of costs over authorized funding levels transferred from any award or contract to another award or contract is unallowable. All losses are not allowable indirect (F&A) costs and are required to be included in the appropriate indirect cost rate base for allocation of indirect costs.

Vacation Payout

Effective immediately vacation pay-outs must not be charged to sponsored funds.  Currently we have no reliable way to allocate vacation earned throughout an employee’s tenure and subsequently paid to an employee upon termination or change in employment status to sponsored funds.  Therefore all vacation pay outs due to a change in employment status must be charged to non-sponsored, departmental and/or college funds.

OGCA will work with the Payroll Office to establish a procedure to avoid charging vacation payouts to sponsored funds.  In the meantime OGCA will monitor this activity on a monthly basis and will notify the college if and when a vacation payout posts to a sponsored fund.

We are considering an approach in allocation of costs that will allow us to routinely charge sponsored funds for this type of expenditure, i.e. fixed fringe benefit rate, composite fringe benefit rate.  We will keep you posted on discussions.