UC Santa Barbara Policy 5115
Policies
Issuing Unit: Administrative Services Date: January 1, 1986
ADJUSTING EXPENDITURES
I. PURPOSE AND SCOPE:
Direct costs or expenses are recorded in the University general
ledger by means of initial payments (e.g., invoices, payrolls), by
recharges from University service units, and by adjustments of
expenditures (cost transfers). This procedure, in accordance with
UCSB Policy 5110, provides guidelines for adjustments of
expenditures, i.e., when charges recorded in the general ledger
should have been reported in a different account/fund/sub/object
code category.
II. REFERENCES:
A. UCSB Policies Manual, Policy 5110, Policy on Expenditure
Adjustments (Cost Transfers).
B. University of California Payroll/Personnel System Departmental
Procedures Manual.
III. PROCEDURE:
A. Adjusting Expenditures Not Involving Federal Funds:
1. Payroll Expenditures (Non-Federal Funds):
To request payroll expenditure adjustments not involving
federal funds, and for certain types of adjustments
involving federal funds as specified in III. B. below the
department shall:
a. Complete the Payroll Expenditure Transfer Form (UPAY
646, available from Central Stores) to adjust payroll
expenditures between or among accounts/
funds/subaccounts. Instructions for completing the
form are outlined in the Payroll/Personnel
Departmental Procedures Manual, Section V-A.
(1) Each item of information requested on this form
is available from the Distribution of Payroll
Expense Report, distributed monthly by the
Accounting Office.
(2) The reason for the adjustment must be fully
explained. Reason codes are printed on the form.
If additional space for comments is needed, a
separate sheet may be attached.
(a) For Reason code A or B, explain what
information was not received in time and
why it was late.
(b) If Reason Code B is indicated, a photocopy
of the pertinent Personnel Action Form
(PAF; UPAY 560) must be attached.
(c) For Reason Code D, a full explanation
justifying the cost transfer must be made.
If the employee is expected to perform
services again under this account/fund, a
photocopy of the pertinent PAF must be
attached.
b. Annotate corrections on the departmental payroll,
Personnel Activity Report, time records and other
records necessary to support and justify the cost
transfers requested on the UPAY 646 form.
c. Obtain the appropriate approval signatures:
(1) If Reason Code A is indicated, the form must be
approved by the person(s) authorized to approve
personnel transactions (PAFs) and by the
person(s) authorized to approve payroll
transactions (payroll time sheets, special pay
rolls, etc.).
(2) If Reason Code B, C, or D is indicated, the form
must be approved by the person(s) authorized to
approve payroll transactions.
d. Forward the form (including supporting documentation)
to the campus Accounting Office for review and
approval for recording. The form may be returned by
Accounting to the department for correction or for
further justification or clarification.
e. Retain departmental records for five years.
2. Non-Payroll Expenditures (Non-Federal Funds):
To request nonpayroll expenditure adjustments not
involving federal funds, and for certain types of
adjustments involving federal funds as specified in
III.B.2. below the department shall:
a. Complete the Nonpayroll Expenditure Adjustment
Request (UFIN 120) to adjust nonpayroll expenditures
between or among accounts/funds/subaccounts/objects.
(1) Each item of information requested on this form
is contained in the Departmental Report of
Appropriations and Expenditures (GL060),
distributed monthly by the Accounting Office.
General ledger entries in
account/funds/subs/objects labeled "no title"
will be adjusted by the Accounting Office.
(2) The reasons for the adjustments must be fully
explained. Reason codes are printed on the form.
If additional space is needed, a separate sheet
can be attached.
(a) If Reason Code A or B is indicated, a
reference must be made to the object code,
voucher number, and ledger date. Also,
explain what caused the incorrect
recording, or why the cost of these goods
or services is being transferred.
(b) If Reason Code C is indicated, and is
identifiable to GL060, reference to the
original object code, ledger date, and
description must be entered. If not
identifiable, departments must maintain
internal records/logs to support these cost
transfers. (If xerox charges, use object
code 5505.)
(c) If Reason Code D is indicated, a full
explanation justifying the transfer must be
made.
b. Obtain the signatures of authorized officials for all
accounts/funds cited on the form.
c. Forward the form (including supporting documentation)
to the campus Accounting Office for review and
approval for recording.
d. Retain departmental records for five years.
B. Adjusting Expenditures Involving Federal Funds (Fund Range
21000-33999) Including Federal Flow-Through Funds Awarded by
Non-Federal Agencies (Sub-Contracts):
1. Payroll Expenditures (Federal Funds):
a. If expenditure adjustments consist of the types of
transfers listed below, departments shall proceed as
in paragraph III.A.I. above (page 1).
(1) Transfer from federal funds to departmental
operating funds (e.g., to 19900).
(2) Transfer between sub-budget codes within the
same account/fund.
(3) Transfer between budget years but within the
same project period where the agency award
document contains financial commitment for more
than one budget year (e.g., transfer between 01
& 02 budget years for an N.I.H. grant).
(4) Transfer within core funds: i.e., any fund with
multiple accounts, such as Biomedical Research
support grants.
b. For all other payroll expenditure adjustments
involving federal funds, the department shall (within
120 days of the original transaction):
(1) Complete the Payroll Expenditure Transfer, from
information available on the Monthly
Distribution of Payroll Expense Report. If an
employee is expected to perform services again
under the account/fund to which the expense is
being transferred, a copy of the PAF must be
attached, even if processing has not been
completed through administrative offices.
(2) The reason for the adjustment must be fully
explained. Reason codes are printed on the form.
If additional space for comments is needed, a
separate sheet can be attached.
(a) For Reason code A or B, explain what
information was not received in time and
why it was late.
(b) If Reason Code B is indicated, a photocopy
of the pertinent Personnel Action Form
(PAF; UPAY 560) must be attached.
(c) For Reason Code D, a full explanation
justifying the cost transfer must be made.
If the employee is expected to perform
services again under this account/fund, a
photocopy of the pertinent PAF must be
attached.
(3) Annotate corrections on the departmental
payroll, Personnel Activity Report, time records
and other records necessary to support and
justify the cost transfers requested on the UPAY
646 form.
(4) Obtain signatures of the principal investigator
or the department chair for each agreement
involved.
(5) Forward the form (including supporting
documentation) to the campus Accounting Office
for review and approval for recording.
(6) Retain department records for five years after
close of award.
c. If the transfer is to a federal contract or grant
from an overdrawn account/fund, or to a terminated
(past agreement end date) federal contract/grant with
unexpended funds, the following additional
documentation is required:
(l) A dated statement, signed by the employee and
principal investigator, indicating the specific
task(s) performed during the period covered by
the salary cost being transferred, which clearly
documents the benefit derived by the
contract/grant being charged.
(2) A copy of employee's properly annotated daily
attendance record for the period covered by the
salary cost being transferred with a signed
certification by the employee as to the
correctness of the revised record (pertains to
staff personnel only).
(3) A dated statement signed by the employee listing
specific dates (month, day and year) worked
during the period covered by the salary cost
being transferred (pertains to academic
personnel only).
(4) A dated statement signed by the principal
investigator, explaining why salary was not
charged initially to contract/grant that
received the benefit from employee's effort.
(5) If Personnel Activity Reports (PARs) have been
produced and distributed by the Accounting
Office for the reporting period that includes
the month covered by the salary being
transferred, revised PAR forms are required as
follows:
(a) If a PAR form was previously received and
completed, the original PAR should be
annotated by the department to reflect the
revised payroll and effort distribution
percentages. These revisions should be
initialed by the original PAR signatory and
a copy of the annotated original PAR
(marked REVISED) should be attached to the
UPAY 646 form.
(b) If a PAR has not previously been received,
the department should request Accounting
provide a PAR reflecting the employee's
entire payroll distribution for the PAR
reporting period. This PAR should contain
the entry "Late PAR" below the "PAR No."
block, in the upper right corner. The data
processing copy of the departmentcompleted
PAR must be attached to the UPAY 646. The
original of the PAR is to be retained in
the department.
2. Non-Payroll Expenditures (Federal Funds):
a. If expenditure adjustment consists of the types of
transfers listed below, departments shall proceed as
in paragraph III.A.2. above.
(1) Transfer from federal funds to departmental
operating funds (e.g., to 19900).
(2) Transfer between sub-budget or object codes
within the same account/fund.
(3) Transfer between budget years but within the
same project period where the agency award
document contains financial commitment for more
than one budget year (e.g., transfer between 01
and 02 budget year periods of an N.I.H. grant
project period).
(4) Transfer within core funds: i.e., any fund with
multiple accounts such as Biomedical Research
Support Grants, etc.
b. For all expenditure adjustments consisting of other
types of transfers involving federal funds, the
department shall (within 120 days of the original
transaction):
(1) Complete the Nonpayroll Expenditure Adjustment
Request (UFIN 120) from information available on
the Monthly Departmental Report of
Appropriations and Expenditures (GL060),
including the following special instructions:
(a) If Reason Code A or B, a reference must be
made to the object code, voucher number,
and ledger date. Also, explain what caused
the incorrect recording, or why the cost of
these goods or services are being
transferred.
(b) Reason Code C may be used to redistribute
certain high numerical but small individual
and/or minor charges. If identifiable to
GL060 then reference to the original object
code, ledger date, and description must be
entered. If not identifiable then logs or
other cost substantiation records must be
retained in the department (if xerox
charges, use object code 5505).
(c) If Reason Code D is indicated, a full
explanation justifying the transfer must be
made.
(2) Obtain signatures of the principal investigator
or the department chair for each agreement
involved.
(3) Forward the form (including supporting
documentation) to the campus Accounting Office
for review and approval for recording.
c. If the transfer is to a federal contract or grant
from an overdrawn account/fund, or to a terminated
(past agreement end date) federal contract/grant with
unexpended funds, the following additional
documentation is required (except for redistribution
of minor charges):
(1) A copy of document supporting the original
charge, e.g., vendor's invoice, Form 5, recharge
statement, travel voucher, purchase order, etc.
(2) A dated statement, signed by the principal
investigator, and indicating the quantities and
the specific goods or services being transferred
and also explaining why cost was not charged
initially to the contract/grant that used the
goods or services. If the amount originally
recorded in the ledger was not transferred in
its entirety the goods or services are not
quantifiable, include a statement explaining the
method of cost allocation.
(3) For redistribution of high numerical, but small
individual charges such as copy machine rental
and paper costs, telephone charges, mailing
charges, or office supplies, which are charged
to a departmental account/fund, but a portion of
which may apply to federal contracts or grants
of the unit:
(a) Copy of internal records/logs of usage to
support the redistribution, and
(b) A statement signed by the unit business
officer explaining the pricing methodology.
Price must not include any departmental
markup.
d. Retain departmental records for five years after
close of award.
C. Availability of Assistance:
Accounting Office personnel are available for consultation
concerning cost transfers.
For questions or comments regarding the format of the above information, please contact webcontact@ucsbuxa.ucsb.edu.
Last Modified By: HMW, 5/21/97
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