Contact

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.