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FRMS is the online tool we use to move funds around in UT accounts, if allowable. These transfers are known as VTA (non-sponsored funds) and VTC (sponsored funds) documents, a reference to the first three letters of the full transfer document ID. The types of accounts we typically process transfers for are:

• VD/VP (various donor / various purpose) gift accounts (aka 30 accounts)
• State accounts (educational and general funds (14 and 20 accounts)
• Faculty Startup accounts (19 or 30 accounts for new faculty members)
• Designated funds (special purpose 19 accounts)
• Sponsored awards (26 accounts)

 

NOTE: Moving funds around in FRMS has nothing to do with corrections, changing transactions or adjusting salary and fringe costs. This is strictly a way to make changes to budgeted amounts - not transactions. Even if there are corrections or adjustments in the works, FRMS is just a means for getting the funds in the subaccounts you need for any pending actions.
 

There are really specific transfer rules for state funds. Object codes (which are tracking numbers assigned to particlar subaccounts to allow, and track, types of expenses in an account) are scrutinized heavily because it's important to make sure transfers with state funds are allowable in an apples-to-apples kind of way. Texas legislature don't take too kindly to us playing mix-n-match with the specific-intent type o' funds they give us, ya'll!

To learn more about all the types of transfers that occur in FRMS, check out the FRMS Transfer System Guide. State account transfers don't come up too often in research administration, so let's concentrate on sponsored awards.
 

PLEASE NOTE THE FOLLOWING
 

• SPONSORED FUNDS: It is not allowable (or possible) to transfer funds out of or into a sponsored account. Behind each sponsored award is a legally binding contract.
   
• FRINGE BENEFITS: When funds are being transferred into a salary subaccount, the corresponding amount of the fringe benefits estimate needs to either already be in the 14 (fringe) subaccount, or must be included in the same transfer request as the salary. Bottom line: There must be sufficient fringe benefits to cover the amount in the salary sub at all times. It's okay to have too much fringe; it's not okay to have too little. 
   
• NON-TRANSFERRABLE: There are certain subaccounts that cannot be transferred to others via FRMS:
  • NSF participant costs - 37 subaccount
  • 61, 62, 63 subaccounts for subaward recipients
  • 90 subaccount -facilities & Administration costs (unless done with corresponding direct costs being transferred) 
     
• MOVING FUNDS BETWEEN EXEMPT & NON-EXEMPT SUBACCOUNTS: Transferring funds between subaccounts with differing status (think tax bracket) means additional steps need to be taken to fulfil requirements. Head to the F&A tabs for additional information about this.

1. Log into FRMS, step through DUO Authentication
2. Click on Transfer in the nav-bar across the top of the site
3. Click on Create in the sub nav-bar
4. Fill in purpose field
   • For sponsored funds, example: 'Moving funds to cover project-related (or research-related) costs'
      
5. Select which type of transfer: sponsored or non-sponsored
6. Effective date can be changed, though it's rarely used
7. Change Creator Desk available only if assigned to more than one desk in *Define
    
8. The Read & Confirm statement references your understanding and compliance with the university's Direct Cost policy. The link in the transfer process is broken, but if you need to familiarize yourself with the policy, it's here. 
   • Upon selecting 'I agree,' you land on the first of four areas in the transfer document: 
     • General
     • Transfer Groups
     • Transactions
     • Document Review
        
   • At this point, you can see a summary at the top of the document that contains:
     
     Document ID: 90VTC######
     Document Status: CREATED
     Creator: Your Name
     Created: MM/DD/YYYY
     Summary: Moving Funds to cover research-related project costs
     Transfer ID: TRF######
     Creator Desk: Your *Define Desk
     Effective Date: MM/DD/YYY
      
9. The next section is called Transfer Information. It contains the transfer ID (different from the Doc ID), the effective date (which you can still change if needed), the stated purpose, which can also be changed, and then a blank field for comments.
   
   In the comment section, it isn't necessary to go into a great deal of detail, but any extenuating circumstances should be included here, if applicable, and mention of PI approval for the transfer should be stated here. 
   
   Note: If a PI requests the transfer being processed for specific need/purpose, reference that in the comments.
   If the transfer is a result of the admin and PI having an understanding that admin should process transfers as and when needed to keep the account in good health (no negative balances), in concert with any team planning and budget projections being done, then the comment regarding PI approval can be phrased as 'Per PI, transferring funds to ________________.
    
10. At this point, either Save & Verify or Save & Continue. It doesn't matter which, as FRMS WILL fuss at you if you've gotten something wrong. FRMS has hard audits to make sure a document is completed correctly. 
        - Just below this section is a place to upload documents, though it's rarely used.
    Upon hitting Continue, you'll move into the second area of the transfer document: Transfer Groups 
     
11. Don't let the red text put you off. You've done nothing wrong. FRMS just comes with built-in unnecessary fussing capabilities. Like a pre-emptive waggling of its finger at you, for the sake of having something to do. 
    • Add your transfer group by starting off with a description, such as 'Misc sub to Fringe sub' to identify the specific transfer activity happening for this group - you're labelling the subaccounts to keep them straight.  
       
12. Enter the full 10-digit account numbers you're transferring from and to, followed by the amount.
     
13. Hit enter and you'll see details about each of the subaccounts populate inside of that transfer group including the pooled amount, which is the free balance. 
    • If you use dept codes for tracking and reporting, you'll see the hotlink for adding them at this same place. 
    • NOTE: If you are processing a transfer for a non-sponsored account (as mentioned back in step 5), at this same place, you will see an error in red text letting you know to input additional information, at which point, you can select the Additional Information link, select the type of funds you are moving -- which is typically the rollover balance from the previous year that reverted back to the income subaccount and needs to be moved back into an expenditures sub. 
       
14. You can add more transfer groups, if needed. You'll also need to add a transfer group for moving F&A funds, if it's the case that you are transferring funds that have differing exempt and non-exempt status as for as F&A rate goes. --see the formulas tab for more details on that. 
     
15. Once you've entered all the transfer groups needed, manually click on the third area that appears in the left-side panel of the page: Transactions
    • This is where you check your math and make sure everything appears as you need it to. 
    • If all is correct, manually click on the fourth and final area of the transfer document: Document Review
       
16. From the Document Review area, you can review the entire document.
    • Click on the Verify Document button. If the document is correct, a message in green text appears in the top left corner that states, 'The document has been successfully verified.' At which point, you are free and clear to hit the Approve Document button to forward it to its next approver. 
      • You can see the desk and approver information in the router history box, which updates as the document clears each approval level.
         
17. Just under the Verify Document button is a dropdown menu that gives you additional choices, it needed, including:
    • CPY - Copy to a New Document (which is helpful if you are doing multiple similar transfers)
    • FYI - To send an information copy to someone
    • FYA - To approve and route to a specific person
    • DEL - For deleting a document
    • REC - Recall to my inbox
      • Which requires a reason be input into the small box at this option.
         
18. You'll receive an email confirmation once the transfer goes through.
    • Your PI will get this same message
    • Consider proactively forwarding your message to them and letting them know what it is to ensure they remain informed. 
      Example: 'Hi, PI Such-N-Such. There's no action item here for you. I'm moving the funds into the needed subaccounts to handle project-related transactions.'  --this assumes that the PI is exacting you to make these transactions to keep the account healthy and that such transfers are allowable on the account. Always note in the transfer document that what you are doing has PI approval --which assumes that it does. Your PIs should have knowledge of what you are doing, both generally and specifically.

If you've ever been bowling, you may recall that after getting your shoes and ball sorted, the first step to start the game is to stand in front of a screen, punch in your name (then give all your bowling friends hilarious names), and hit a button to start the game. An automatic prompt lets you know when it's your turn, and it also calculates the score. 

• Who among your bowling group would be able to continue the game if the computer suddenly stopped working and you were handed a pencil and a piece of paper to keep score? 
   
• Keeping score is easy, but many people don't know how because they've been given a workaround tool that requires no calculating, and no understanding of the rules.
   

• In recent times central units (OSP, accounting, etc.) have provided work-around tools, including for calculating F&A for FRMS transfers. Nothing against the tools, they are dead-useful. Instead of defaulting to that work-around, let's grab a pencil and a piece of paper!  We're learning how to keep score!

  
  Math Skills Optional
  You do not need to be 'good at math' to understand and work with this concept.

  We're breaking this down into two main areas:
  (feel free to skip ahead to the one you need)

1. How Direct and Indirect costs work
2. Which subaccounts get assessed F&A
    

• Once you get a solid understanding of how F&A works, how it's assessed, elevate your F&A game by heading to the F&A Formulas section to learn how to calculate F&A for yourself. The calculations are actually the end result of super awesome magic spells. (Spoiler alert: It's not magic. It's math. So the end result is always predictable. Sorry about it!)

   

  1. How Direct and Indirect Costs Work

  
  We have one name for direct costs and it's pretty straight forward: Direct Costs (DC)

  And we have three names for indirect costs:

• Indirect Costs (IDC)
• Overhead (OH)
• Facilities and Administrative Costs (F&A)

It's almost like IDC is that misbehaving uncle who shows up to family reunions with a different name each time so no one will recognize him... We know it's you, Uncle Frank Overhead, so stop pretending to be someone you're not, and... get away from that open bar - you're cut off.
 

1. Direct costs are expenses clearly and directly incurred due to research being conducted on a sponsored award, expenses such as project-specific personnel salary and fringe, materials and supplies, travel, equipment, etc. You can read how the federal government describes Direct Costs in that cyclical way they specialize in. And UT provides their own take here. 

2. Indirect costs are the less obvious expenses that are incurred by the university while the research is being done - all the  infrastructure-related costs, like keeping the utilities going, improving buildings, employing staff for custodial services, and also for research administration (that's us). And again, the fed gov has gone above and beyond in putting this concept into words that will leave you speechless (because you'll be asleep faster than you can say 200.414). 

   The university negotiates with the fed gov to determine:

• What types of costs can be included in their total Indirect Cost base.
  That base is used to come up with an appropriate percentage rate that answers the question: How much of the UT's total operating costs are indirect vs. direct when it comes to conducting research at the university.
   
• What percentage rate will be used to calculate indirect costs (assessed against direct costs). That indirect cost rate, called the F&A rate, is detailed for multiple years at a time through the university's Cost Rate Agreement. Those rates are used to develop research proposals that are submitted to sponsors for proposed projects. Which rate used depends on the characteristics of the project and also the sponsor. 
   

• Back in 2005, that percentage rate for indirect costs was 50%. In 2022, it's 58.5%. So for every $1 to be spent directly on research projects, the university charges $0.585 (58.5 cents). So a project that costs $100,000 (directly), will have a total price of $158,500. <-- see that 58.5% shining through? 

  One last important thing about Indirect Costs
  (okay, maybe 3 last important things):

1. When sponsored research funds are put into an account, they are split up into separate pots of money within that account --these are the subaccounts.
2. Each subaccount has its own set of accounting rules, and that plays into how we process our transfers in FRMS -there are hard-stop audits in FRMS that stop us from doing a transfer that isn't allowable.
3. Indirect Cost for entire award is included as part of the award budget, and it gets put into its own pot. So, as things get purchased, the corresponding indirect cost per transaction is charged to that F&A pot. <-- and that's why we also need to transfer associated F&A, when applicable.
    

 

2. Which Categories Get Charged F&A?

 

The terms we throw around to describe costs that do or don't get charged the F&A rate are: Exempt and Non-exempt

 

• When costs are Exempt from F&A costs, they're tax-free (Woohooooo, shopping time!   -No, not really.)
  Costs that are Non-Exempt -means they are charged that big ol' tax we call the F&A rate.
   
• The thing about all this direct and indirect stuff is: It's permanent and consistently applied.
  We can't go back and forth on which types are or aren't exempt, when to include them, when not to include them for calculating indirect charges, etc. It's all carved in stone in the negotiated F&A rate agreement.
  
  Once F&A is established in a contract, that's the end of it. And the university has to make absolutely sure that all these types of costs are being handled appropriately, lawfully, and consistently. 
  Let's leave all this contract stuff behind and jump into identifying F&A status of typical subaccounts.
  
  PRO TIP! You can find the F&A rate applied to each subaccount (cost category) in an account by heading to GB1 in *Define, typing in the full 10-digit account number, then -enter. In the lower right corner, the IDC rate is displayed as a decimal number.  The exempt subs show a zero rate.
   

• Costing categories/subaccounts (subs) are split into three distinctive groups:

  1. Costs/Subs that are assessed F&A, aka Non-Exempt
  2. Costs/Subs that are exempt from F&A, aka Exempt
  3. Costs/Subs with special circumstances, aka Uh... kinda?

  F&A Non-Exempt vs. Exempt Cost Categories

  F&A Non-Exempt	Exempt	Other (you get to ignore for now)
  (9, 10, 12) Salary & Wages	(37) Particpant Support	(60) Subaward Placeholder
  (14) Fringe Benefits	(70) Stipends	(61) Subaward
  (50) Materials & Supplies	(71) Tuition	(62) Subaward
  (51) Misc Expenses	(80) Capital Equipment	(63) Subaward
  (75) U.S. Travel	(83) Equipment Fabrication	Pretty much the entire 60 series
  (76) Int'l Travel	These are your tax-free shopping opportunities	First $25K gets charged F&A, rest is exempt

  Head to the Formulas tab to sort out moving the F&A!

You do not need to be good at math to understand how to move F&A around in transfer requests.
It really just comes down to figuring out when you owe the tax man and when he owes you!

Common Scenarios & Examples
To summarize, the transfer scenarios below consist of: Non-Exempt to Non-Exempt Exempt to Exempt Exempt to Non-Exempt - specific amount Non-Exempt to Exempt - Specific amount Exempt to Non-Exempt - Entire balance Non-Exempt to Exempt - Entire balance
Exempt vs. Non-Exempt, What's the difference? It refers to whether or not the funds in a subaccount are to have the F&A 'tax' applied against them. Exempt means they are 'tax-free.' Non-Exempt means the 'tax' is applied. Feel free to use spreadsheet software, a calculator, or actual paper and pen/pencil to play with these scenarios. Once you understand them, you'll have a much greater understanding of the funds you oversee in sponsored awards. If all this F&A stuff leaves you confused, head here for some help.

Scenario 1

Transferring funds from a Non-Exempt sub to another Non-Exempt sub
Example: Moving some (12) Salary funds into the (75) U.S. Travel sub
Why? Because PI has a project-related trip to make and there's room on the award to handle it.
The transfer amount is $1,500, based on the estimate the PI shared with you.

Just one transfer group is entered into the FRMS document:
$1,500 from the (12) to the (75).
Both subs have the same Non-Exempt status, so you don't mess with F&A.
Total amount transferred: $1,500
 

Scenario 2

Transferring funds from an Exempt sub to another Exempt sub
Example: Moving some (71) Tuition funds into the (80) Capital Equipment sub
Why? Because PI hired one less student than planned, needs to purchase that insanely fast computer with all the bells and whistles specifically for the research being conducted on the project.
The transfer amount is $5,500, based on the quote the PI provided.

Just one transfer group is entered into the FRMS document:
$5,500 from the (71) to the (80).
Both subs have the same Exempt status, so you don't mess with F&A.
Total amount transferred: $5,500
 

Scenario 3

Transferring a specific amount of funds from an Exempt sub to a Non-Exempt sub
Example: Moving some exempt (71) Tuition funds into the non-exempt (50) Materials & Supplies sub
Why? Because PI hired one less student than planned, needs to purchase project-specific reference materials.
The specific transfer amount is $200 based on what the PI provided.

For the FRMS transfer document, you need 2 transfer groups:
The (71) to (50) transaction, and the (71) to (90) transaction.
Why the (90) sub? Because someone owes some taxes, Luuuucy!

The 71 is an Exempt sub, which means it enjoys tax-free status. The 50 didn't get so lucky.
You can't just move the tax-free (71) funds into the taxed (50) and call it a day. You need to determine how much (71) funds to move to cover the amount you need in the (50) and the associated amount of tax to move into the (90) overhead sub.

Your PI needs $200 transferred for the reference material, but you gotta 'pay the tax' - what does that look like?

• Move $200 from the (71) to the (50)
  $200 x .585  = $117   <-- .585 is the F&A % rate expressed as a decimal, learn more about F&A here. 
  Move $117 from the (71) to the (90)
  Total amount transferred: $317

Any time you move funds from the 12, 14, 50, 51, 75, 76 subs into a 70, 71, 80 or 83 sub, you gotta pay the tax.

Scenario 4

Transferring a specific amount of funds from a Non-Exempt sub to an Exempt sub
Example: Moving some Non-Exempt (50) Materials & Supplies funds into the Exempt (71) Tuition sub
Why? Because PI hired an additional student and there's room on the award to handle it
The amount needed is $5,500, based on an estimate of tuition costs and possible fees for a student.

• When funds are moved from a taxed status to a tax-free status, the tax pot owes us money and we need to figure out what combination of taxed money and the tax refund will add up to the total you need ($5500 in this case).
  
  You do this by 'backing into' the number.
  $5500  /  1.585 x .585 = $2029.97  <-- that's the amount of indirect cost (F&A) inside the $5500.
  1.585 consists of the number 1, followed by the F&A rate expressed as a decimal number.

      ---If a different F&A % rate is being used, such as the off-campus research rate of 26%, the formula would be $5500 / 1.26 x .26 = $1134.92
 

• Subtract $2029.97 from $5500 = $3470.03  <-- that's the amount of direct costs within the $5500 number.
  Check your math by adding the indirect cost amount to the direct cost amount.
  If they total the exact number you need, you've done it correctly.
  
  You can also doublecheck your math by multiplying the direct cost of $3470.03 by the F&A rate of 58.5%.
  $3470.03 x 58.5% = $2029.97

• Now you know what the 2 FRMS transfer groups will look like:
  The (50) $3470.03 to the (71), and the (90) $2029.97 to the (71).
  Total amount transferred: $5,500

 

Scenario 5

Transferring total remaining balance of funds from an Exempt sub to a Non-Exempt sub
Example: As an award drawns down to a close, it often becomes necessary to move remaining funds into other subaccounts, which is also known as 'sweeping the account,' or 'sweeping the subs.' 

When you need to move remaining Exempt funds (70, 71, 80) into a Non-Exempt sub (12, 14, 50, 75, 76), you need to back into the Exempt number the same way as in senario 4, except this time we owe the account some tax.

Let's clear out the (71) sub and move it to the (12) salary sub and (14) fringe sub.
Amount remaining in (71) sub: $10,000

$10,000 / 1.585 x .585 = $3690.85 <-- that's the F&A amount inside the $10K number to be moved into the (90) sub
$10,000 - $3690.85 = $6309.15 <-- that's the direct cost, which now needs to be split between salary and fringe

$6309.15 / 1.30 x .30 = $1455.96 <-- that's the 30% fringe
$6309.15 - $1455.96 = $4853.19 <-- that's the salary

For the FRMS transfer document:  You'll need 3 transfer groups:
From (71) Tuition $3690.85 to (90) Overhead
From (71) Tuition $1455.96 to (14) Fringe
From (71) Tuition $4853.19 to (12) Salary
Total amount transferred: $10,000

 

Scenario 6

Transferring total remaining balance of funds from an Non-Exempt sub to Exempt sub
Example: It's near the end of an award, you need to 'Sweep' the (50) Materials & Supplies sub into the (71) Tuition.
Amount remaining in (50) sub: $10,000

This is another instance where the account owes you money. Well, the (90) owes the (71) money, close enough.

All that is needed is to mulitply the total amount in the (50) sub, $10,000 x the IDC rate, 58.5% = $5,850 

For the FRMS transfer document, you'll need 2 transfer groups:
From (50) Materials & Supplies $10,000 to (71) Tuition
From (90) Overhead $5,850 to (71) Tuition
Total amount transferred: $15,850

Breaking Down The Numbers

You do not need to be good at math to understand how to move F&A around in transfer requests.
It really just comes down to figuring out when you owe the tax man and when he owes you!

Common Scenarios & Examples
To summarize, the transfer scenarios below consist of: Non-Exempt to Non-Exempt Exempt to Exempt Exempt to Non-Exempt - specific amount Non-Exempt to Exempt - Specific amount Exempt to Non-Exempt - Entire balance Non-Exempt to Exempt - Entire balance
Exempt vs. Non-Exempt, What's the difference? It refers to whether or not the funds in a subaccount are to have the F&A 'tax' applied against them. Exempt means they are 'tax-free.' Non-Exempt means the 'tax' is applied. Feel free to use spreadsheet software, a calculator, or actual paper and pen/pencil to play with these scenarios. Once you understand them, you'll have a much greater understanding of the funds you oversee in sponsored awards. If all this F&A stuff leaves you confused, head here for some help.

Scenario 1

Transferring funds from a Non-Exempt sub to another Non-Exempt sub
Example: Moving some (12) Salary funds into the (75) U.S. Travel sub
Why? Because PI has a project-related trip to make and there's room on the award to handle it.
The transfer amount is $1,500, based on the estimate the PI shared with you.

Just one transfer group is entered into the FRMS document:
$1,500 from the (12) to the (75).
Both subs have the same Non-Exempt status, so you don't mess with F&A.
Total amount transferred: $1,500
 

Scenario 2

Transferring funds from an Exempt sub to another Exempt sub
Example: Moving some (71) Tuition funds into the (80) Capital Equipment sub
Why? Because PI hired one less student than planned, needs to purchase that insanely fast computer with all the bells and whistles specifically for the research being conducted on the project.
The transfer amount is $5,500, based on the quote the PI provided.

Just one transfer group is entered into the FRMS document:
$5,500 from the (71) to the (80).
Both subs have the same Exempt status, so you don't mess with F&A.
Total amount transferred: $5,500
 

Scenario 3

Transferring a specific amount of funds from an Exempt sub to a Non-Exempt sub
Example: Moving some exempt (71) Tuition funds into the non-exempt (50) Materials & Supplies sub
Why? Because PI hired one less student than planned, needs to purchase project-specific reference materials.
The specific transfer amount is $200 based on what the PI provided.

For the FRMS transfer document, you need 2 transfer groups:
The (71) to (50) transaction, and the (71) to (90) transaction.
Why the (90) sub? Because someone owes some taxes, Luuuucy!

The 71 is an Exempt sub, which means it enjoys tax-free status. The 50 didn't get so lucky.
You can't just move the tax-free (71) funds into the taxed (50) and call it a day. You need to determine how much (71) funds to move to cover the amount you need in the (50) and the associated amount of tax to move into the (90) overhead sub.

Your PI needs $200 transferred for the reference material, but you gotta 'pay the tax' - what does that look like?

• Move $200 from the (71) to the (50)
  $200 x .585  = $117   <-- .585 is the F&A % rate expressed as a decimal, learn more about F&A here. 
  Move $117 from the (71) to the (90)
  Total amount transferred: $317

Any time you move funds from the 12, 14, 50, 51, 75, 76 subs into a 70, 71, 80 or 83 sub, you gotta pay the tax.

Scenario 4

Transferring a specific amount of funds from a Non-Exempt sub to an Exempt sub
Example: Moving some Non-Exempt (50) Materials & Supplies funds into the Exempt (71) Tuition sub
Why? Because PI hired an additional student and there's room on the award to handle it
The amount needed is $5,500, based on an estimate of tuition costs and possible fees for a student.

• When funds are moved from a taxed status to a tax-free status, the tax pot owes us money and we need to figure out what combination of taxed money and the tax refund will add up to the total you need ($5500 in this case).
  
  You do this by 'backing into' the number.
  $5500  /  1.585 x .585 = $2029.97  <-- that's the amount of indirect cost (F&A) inside the $5500.
  1.585 consists of the number 1, followed by the F&A rate expressed as a decimal number.

      ---If a different F&A % rate is being used, such as the off-campus research rate of 26%, the formula would be $5500 / 1.26 x .26 = $1134.92
 

• Subtract $2029.97 from $5500 = $3470.03  <-- that's the amount of direct costs within the $5500 number.
  Check your math by adding the indirect cost amount to the direct cost amount.
  If they total the exact number you need, you've done it correctly.
  
  You can also doublecheck your math by multiplying the direct cost of $3470.03 by the F&A rate of 58.5%.
  $3470.03 x 58.5% = $2029.97

• Now you know what the 2 FRMS transfer groups will look like:
  The (50) $3470.03 to the (71), and the (90) $2029.97 to the (71).
  Total amount transferred: $5,500

 

Scenario 5

Transferring total remaining balance of funds from an Exempt sub to a Non-Exempt sub
Example: As an award drawns down to a close, it often becomes necessary to move remaining funds into other subaccounts, which is also known as 'sweeping the account,' or 'sweeping the subs.' 

When you need to move remaining Exempt funds (70, 71, 80) into a Non-Exempt sub (12, 14, 50, 75, 76), you need to back into the Exempt number the same way as in senario 4, except this time we owe the account some tax.

Let's clear out the (71) sub and move it to the (12) salary sub and (14) fringe sub.
Amount remaining in (71) sub: $10,000

$10,000 / 1.585 x .585 = $3690.85 <-- that's the F&A amount inside the $10K number to be moved into the (90) sub
$10,000 - $3690.85 = $6309.15 <-- that's the direct cost, which now needs to be split between salary and fringe

$6309.15 / 1.30 x .30 = $1455.96 <-- that's the 30% fringe
$6309.15 - $1455.96 = $4853.19 <-- that's the salary

For the FRMS transfer document:  You'll need 3 transfer groups:
From (71) Tuition $3690.85 to (90) Overhead
From (71) Tuition $1455.96 to (14) Fringe
From (71) Tuition $4853.19 to (12) Salary
Total amount transferred: $10,000

 

Scenario 6

Transferring total remaining balance of funds from an Non-Exempt sub to Exempt sub
Example: It's near the end of an award, you need to 'Sweep' the (50) Materials & Supplies sub into the (71) Tuition.
Amount remaining in (50) sub: $10,000

This is another instance where the account owes you money. Well, the (90) owes the (71) money, close enough.

All that is needed is to mulitply the total amount in the (50) sub, $10,000 x the IDC rate, 58.5% = $5,850 

For the FRMS transfer document, you'll need 2 transfer groups:
From (50) Materials & Supplies $10,000 to (71) Tuition
From (90) Overhead $5,850 to (71) Tuition
Total amount transferred: $15,850

Types of accounts impact types of transfers, transfer activity, and also transfer allowability.

For non-sponsored awards, such as 30 accounts, aka gift funds, transfer activity usually takes the form of moving funds around inside of the account - from the 93 income subaccount to a 51 (expenditures) subaccount within the same account. Some people opt to have all the standard subaccounts (salary, fringe, misc, etc.) added to gift fund accounts to make it easier to track types of expenses, others prefer to just run everything through the (usual) catch-all 51 sub. (Take a look at that hotlinked subaccount list-it's helpful) 

Transferring funds into or out of gift accounts is sometimes allowable, if funds are categorized as general (Various Donor/Various Purpose - VD/VP) gifts. When gift funds are designated for a specific intent, such transfers are typically not allowable, as there is often a donor or gift letter associated with these funds specifying the purpose -usually in support of a specific PI's research, or particular area of research. Check with the accounting contact who oversees the funds to make that determination.

Transferring 14 and 20 accounts aka state funds (inter-account and intra-account ? ) is a whole n'other ball game, with object codes under close scrutiny. These are funds given to the university by the State of Texas for educational and instructional purposes, so the concept of mix-n-match gets shut down quickly.

For sponsored awards, it is never allowable (or even possible) to move funds out of an account. And moving additional funds into a sponsored award is always attached to a contract of some type. Behind each sponsored award account is a fully executed, legally binding contract.

• This includes funds designated for subcontracts - they too have a contract, so again, we are required to follow specific guidelines when it comes to moving those funds. Those guidelines include getting what's called a formalized de-obligation confirmation (often called a de-ob) from the subrecipient team's contracting or billing team, or a final invoice clearly marked final for de-ob purposes.
   
• Any subaccounts with subcontract funds in them are required to have a zero or positive balance to move forward with the de-ob requist, which typicaly happens when the PI wants to move funds back out of that subcontract subaccount and into one or more of the others, often when an award is wrapping up and subaccounts need to be 'swept' together to clear out final expenses. 
   

Note: Sponsored funds belong to the sponsor until we (UT) spend them on project-allowable costs <-- They aren't our funds to re-direct to another purpose or to move around without permission, if sponsor has requested to be notified or to give approval prior to such requests. Visit the other links below to learn more about specific transfer policies. 

Let's tackle typical transfer policy for sponsored awards - this is important for grant management.

Sponsors give the university funds for PIs to conduct research meaningful to the sponsor. Some sponsors make madatory that the costs (and types of costs) of the proposed research remain exactly as described in the budget. Others recognize it's tough to keep funds allocated exactly as first described - stuff changes in the course of a project and they allow some flexibility. We need to determine what, if any, restrictions exist before we start moving funds around.

A no-go for transfers: Anything that would change the scope of the project and/or statement of the work. These changes can impact the deliverables or goals of the work - the entire point of the research in the first place. In those cases, sponsor approval is always required. You can read OSP's wording on that here. 

Here are types of transfer restrictions often encountered in sponsored agreements:

• Not allowable
• Allowable only with sponsor approval
• Allowable, but limited to a certain percentage of the entire award
• Only allowable in certain costing categories (subaccounts)
• Allowable, but Limited to a percentage within particular costing categories
   

Check the CA3 screen in *Define where transfer restrictions are usually documented.
Review the award's executed agreement, accessed via RMS or UT-RMS.
Contact your SPAA Analyst in OSP (your accountant).
CoLA's Research Support Office may also have copies of award documents if they helped with submission.

If you're in a hurry, to SUMMARIZE: Confirm allowability of transfers by checking the NSF-maintained matrix that covers many of the fed agencies we do business with - it's informed by § 200.308 in the online Code of Federal Regulations (eCFR), and NSF also published the RTC Overlay, a document that pulls all relevant rules into one place to ensure compliance.

The Rest of the Story

Many federal sponsors do allow What we refer to as transfers between subaccounts (aka costing categories): As long as the transfer doesn't represent a change to the Statement of Work (SOW) of the project, and you're not trying to transfer funds in the typical non-transferrable categories (subawards, participant support, more on this below).

The eCFR) which contains the set of laws that govern federal funds at universities, has a section devoted to what is and isn't allowable, § 200.308. One important detail when taking in the eCFR details is to keep straight that they group sponsored awards 2 ways: Construction-related projects and non-construction Projects. 

• The Principal Investigator determines whether or not the requested budget transfer represents a change to the SOW and the SPAA Analyst (Accountant) has final approval on that determination.
   
  • The subaccounts that aren't available for transfers are the ones that are for subawards (the 60 series of subs) - there's a contract behind those amounts, so to change them, a modification to the contact is needed. Also, funds categorized for participant support costs, typically in the 37 sub (and sometimes in the 70 series of subs) are unable to be transferred.
    
    Here's how the Code of Federal Regulations defines participant support costs:
    'Direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.'
    
    You can find it within a list of CFR definitions here (a helpful list to get to know).

The National Science Foundation (NSF), a federal agency that funds many projects in CoLA, maintains a published matrix of actions that require pre-approval, including transfers. The matrix is in play with many of the main federal agencies that sponsor reseach at UT as outlined on the document. Though the layout is a little tough on the eyes, it's super useful. This document takes away the guesswork on how to handle transfers among fed agencies.

• NOTE: The Reference column indicates the applicable Code of Federal Regulations (eCFR)
• The RTC Overlay column references this document, which is designed to consolidate applicable rules
• Don't let the eCFR and seemingly cyclical nature of these docs discourage you (or cross your eyes)
  Feel free to reach out for clarification or help with parsing the details. (we get it - it's a beastie)

Okay, ya'll, please do listen up! This part about transfers is a little scary and A LOT important.

The federal government regards the following to be indicative of inadequate fiscal monitoring:

• Frequent cost expenditure corrections
• Late expenditure corrections
• Inadequately documented or explained corrections
    -especially on sponsored awards with overruns, unexpended balances and purchases in their last 90 days

 

Expenditure Correction – (the dry toast version) An after-the-fact re-allocation of an expense associated with a sponsored project after the expense was initially charged to another sponsored project or non-sponsored program.
Plain-speak: First you charged an expense to account 1, now you want to move that expense to account 2. 

Late Expenditure Correction – A correction made as described above, but done more than 90 days from the date of the original charge.
Plain-speak: Someone forgot about needing to move something (an oversight), misunderstood and messed something up (an error), or ya'll are treating ya'lls sponsored awards like a bank checking account (not okay)
 

ALL OF US should be aware of, adhering to, and advising our PIs and researchers about, the 3-month transfer rule. This rule applies to salary, fringe, materials and supplies, equipment, travel - any and all categories. Any cost that needs to be moved from one account to another needs to be done within 3 months. 

After-the-fact transfers of costs are mistakes, errors that we're attempting to correct via a transfer of charges. In order to remain compliant with policy concerning timing of transfers, the following is required:

• Appropriately Justified
• Must contain full explanation of how error occurred and/or nature of the error
• Explanations such as 'to correct error' or 'to transfer to correct project' are unacceptable*
• Explanation of why it is appropriate to charge the receiving project
  
  * Explanations such as 'to correct an error' or 'to transfer to correct grant' are not sufficient. The requirement is to explain how the error occurred and/or the nature of the error or how/why the expense was assigned to the wrong project/account. It should also explain the direct benefit to the receiving sponsored project.

What is: Sufficient Documentation?
A full explanation of how/why the error occurred
The relationship of the charge to the project being charged
Steps taken to avoid this in the future (for corrections > 90 days)

When your SPAA Analyst (Accountant) asks you for these things, they're not being difficult. They're following federal law and keeping us from being at risk when the next audit comes around. Audits have real consequences: Disallowed expenses. Don't let your expenses be the ones disallowed. Follow these guidelines!
 

What is: Completed in a Timely Manner?
Non-Salary Corrections (tuition, materials and supplies, equipment, etc.) – Prepared and submitted within 90 days from the date of the original charge
Salary Corrections – Prepared and submitted within 90 days from the date of the original salary charge. Salary corrections made after the effort certification are extremely high risk and should be an exception

 

Expenditure Corrections – Other Considerations
Transfer of costs (HR and non-HR costs) between or to any sponsored project are allowable only when there is a direct benefit to the project being charged

An overdraft or any direct cost item may not be transferred to another sponsored project to resolve the deficit without establishing benefit to the receiving project

UT is obligated to remove unallowable charges made to a sponsored project regardless of timeframe

Expenditure corrections >90 days are considered high risk, subject to increased scrutiny, need to explain steps taken to avoid a reoccurrence
 

Grant Administration Approach to Transfers

Expenditure corrections must not be used as a means of managing cash balances
Project funds are not interchangeable; the integrity of each grant account must be maintained
Costs applicable to several projects cannot be charge solely to a single project
Costs not allocable to a project cannot be charged to that project (even temporarily)

Red Flags:
Frequent expenditure corrections in the same unit (should be rare, not a business process)
High volume of corrections on a specific award (especially near end of project period)
Corrections to corrections
Repeating the same mistake multiple times
 

IN SUMMARY

Any time a transfer is initiated, the assumption is that the transaction was not handled properly initially. If expenses are being transferred to a sponsored project, there will be considerable scrutiny of the reasons for the transfer and of the justification for moving those charges

Frequent and poorly documented expenditure corrections may indicate problems in the management of sponsored projects

Federal auditors more closely scrutinize the allowability, allocability, and reasonableness of expenditure corrections

Federal sponsors are giving increased attention to the reason behind expenditure corrections from and to sponsored projects

There is a significantly increased audit risk for expenditure corrections made beyond the approved guideline

Late salary and non-salary expenditure corrections (>90 days) and salary expenditure corrections made after certification are extremely high risk, should be the exception 

Although the university has not yet set boundaries regarding late transfers of salary and associated fringe, these types of transfers need to be handled with the same approach toward other types of transfers - with a clear understanding that these kinds of late transfers are 'red meat' to auditors --graphic, yes, but also true.

Sponsor audits have become a frequently occuring thing in the world of sponsored research. It's no longer a question of if we get audited, but when we get audited (again!) Disallowance of late transferred charges is something that is occuring with frequency. 

While it's easy to blame the PI for late transfers, and sometimes, that is certainly the case, it usually traces back to lack of oversight --lack of proactive, clear, accountable planning for PI research teams and their active awards. Your failure to properly manage the research accounts in your purview now has very real consequences and a dollar amount assigned to them. 

Even the best admins out there can have some of their transactions disallowed in an audit. But once the investigation is concluded, and more is known about the circumstances, is it going to come down to a questionable choice a PI made of their own volition, or will it become clear that administrative mismanagement was at the heart of the choas and corrections that threw the award into the view of the auditors in the first place?

Now is the time to place emphasis on award projections and project & team budgets
It's not complicated, but it does require due diligence.
Stay on the right side of an audit and help your PIs to do so as well.

If you're in a hurry, to SUMMARIZE: There is no percentage or dollar amount threshold for NSF transfers between subaccounts (that allow transfers in the first place) - honest, promise, pinky swear, it's true!
BUT there is a percentage threshold concerning PI level of effort on the project. PI level of effort can't be reduced (based on what's on the Current and Pending form) by 25% or more without written sponsor approval to do so. 

Common Misconceptions Clarified

There are some misconceptions out there about what is and isn't allowed with NSF transfers. As administrative personnel, we do not limit a Principal Investigator's federal, agency, and university-allowable rights to move funds around within their awards.

Two of the most common misunderstandings revolve around a 25% rule and a $25,000 rule.

1. The '$25,000' threshold rule so frequently misapplied traces back to 2 federal regs: here and  here.
NSF policy makes clear that the rearrangement/reconversion costs they are referring to are specific to physical facilities and construction related costs. They address that threshold because NSF isn't in the business of building research labs, buildings and other infrastructure-related costs. 

• The confusion occurs when we log into research.gov to submit a request, such as a no-cost extension. From a dropdown list, we select which type of request we are sending in. Within that list is the following type of request:
   
  • Rearrangement/Reconversion costs in excess of $25,000.
    Without context from the eCFR § 200.462 rule, this request with unfortunate wording, appears to be all-encompassing and has led to many clarification requests directed at NSF Program Managers, and many instances of misinformation communicated to PIs regarding what they can and can't do in terms of moving funds around within their NSF awards.
    
    Transfers between subaccounts (that allow transfers in the first place) DO NOT fall under this threshold. Please do not tell NSF PIs they have a $25,000 threshold - that is not accurate.
     
    • Here is the exact wording contained in NSF's 2022 proposal guide (and in many previous versions):
      
      'Except under certain programs, NSF does not normally make grants for construction or facility improvements. However, rearrangement and reconversion costs that do not constitute construction (i.e., rearrangement and reconversion costs aggregating $25,000 or less) may be allowable under NSF grants to adapt space or utilities within a completed structure to accomplish the objective of the NSF-supported activity, provided that:'...
      (and it goes from there with specifics that impact this rule) 
       

When it comes to getting the all-clear on intra-subaccount NSF transfers, not only do we have:
1) a matrix that tells us that it's allowable, we also have
2) a clarified policy that rules out the misapplied $25,000 threshold. But if you prefer things in threes
3) here's the final greenlight that should really bring things home:

• During a 2022 NSF Financial Management Update Webinar, an attendee asked a question about rebudget thresholds among salary and fringe, and this is the response provided by Beth Strausser, NSF Senior Policy Specialist, Policy Office, Division of Institution and Award Support: 
  
  6/08/2022: 2:27 PM: 'Unless one has been specified in an NSF award notice, in general NSF does not have a percentage threshold for rebudgeting. Under normal rebudgeting authority, a grantee can rebudget within personnel categories after an award is made and no prior approval from NSF is necessary. The caveat is if the change would cause the objectives or scope of the project to change, then the grantee would have to submit an approval request via Research.gov.'
  
  The question posed was referring to an often-misunderstood 25% threshold (instead of a $25,000 threshold), but the response addresses both misconceptions. And that brings us to the other one...
   

2. The 25% threshold rule. There is indeed an NSF 25% threshold policy, but it has nothing to do with transfers of funding in our sponsored research awards.

It's about the level of PI effort devoted to a project.
That same NSF prior approval matrix addresses the requirement to seek approval if a PI's level of effort is reduced. Here's the exact wording: 'Disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator' (requires prior approval)

UT has adopted and applied that policy across all sponsored awards. Here's the exact wording:

'As a result of the most recent statewide audit and associated corrective action plan principal investigators are reminded that a withdrawal from a sponsored project, an absence from the university of more than three months, or a 25% (or greater) reduction in time devoted to the project on the part of a principal investigator, project director, or other key personnel requires prior approval from the sponsor.'

To clarify what a 25% or more reduction in time devoted to the project looks like:

This is not about the amount of salary the PI charges to the award. It's about the amount of time they have formally declared they'll spend on the project --located on the Current and Pending Support form they included with their proposal (as required by NSF and most federal sponsors). So we can't measure a reduction in effort by looking at the salary amount a PI charges to their award.

But if a PI, for example, tries to lower that declared amount of time on a Current and Pending Support form they plan to submit with another proposal -that's a problem. --and it has been a problem, which is probably why NSF clarified this policy.

A PI would be the only person who knows how much effort they are devoting to a project. If they inform you that they are going on sabbatical, or extended leave from teaching, or leave without pay, any status change should prompt you, the person in charge of award management, to ask them about their effort on their award(s).

Note: NSF only created this policy for decreases in effort, not increases. If a PI wants to devote more time and associated salary coverage to the project, NSF doesn't require any kind of prior approval. But if a PI does increase their time devoted to the project without the associated salary coverage, that opens up another question: Who is paying for that extra time? It can't be paid by another sponsored award so... is UT paying for that time via their instructional funds? If so, welcome to the world of Cost Share. 

NIH spells out in clear terms what their policy is regarding transfers, corrections, etc.

You can read it in its entirety here.

In Summary

• Transfers must be done within 90 days of when error was discovered
   
• Requires supporting documentation to explain how error occured

   --and confirmation of correctness of new charges

• Transfers to cover cost overruns are not allowable
   
• Must have system and process in place to catch errors timely
  Repeated issues with late transfers may indicate improvements needed
   
• Accounting system needs to be transparent and available to sponsors, auditors, etc.
   
• The expectation is that though there is flexibility with adjusting the budget to meet project needs, spending timing should be consistent with how the project was outlined

--Plain-speak: If an award sits laregly unspent for a while and then experiences a fast and significant amount of charges, whether new/original charges or transfers, the auditors will pick up on that and look to find out more about how the award is being managed.

• If there is a significant difference in the way the award's budget was to be spent and the expenditures that are charged, that too may warrant additional scrutiny from sponsors/auditors. 

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