Interdepartmental Payroll Transfers (IPT)
In order to
protect the fiscal integrity of research funding at NAU, coupled with the
necessity to reduce the number of payroll expense transfer currently being experienced
on this campus, extra scrutiny must be demonstrated and applied in dealing with
all types of cost transfers (IPT & IDT).
This action is necessary on several levels.
- It is generally accepted by the federal
government, sponsoring agencies, and auditors that if direct costs are “easily
identified and assigned…, with a high degree of accuracy.” As required in OMB Uniform Guidance, the initial charging of the cost to a project constitutes the
proper allocation of that cost.
- Recent audits of large research
universities have revealed that cost transfers justifications were
insufficient, vague or did not meet with
the criteria set forth by the university and therefore were deemed
non-compliant, resulting with the cost transfers being considered unallowable.
These discoveries have resulted in a current audit environment that is
targeting expense transfers on sponsored projects.
will be considered as High Risk by the PAASFC office, in that transferring
costs originally posted to either un-restricted and/or restricted funds from
the onset is the proper allocation of that cost. PAASFC staff will be reviewing the responses
to the questions ensuring that the circumstances creating the need for the cost
transfer is the exception rather than the rule.
Examples of appropriate responses to
the questions on the IPT Justification Form:
explanation that merely states that the adjustment being made is "to
correct an error" or "to transfer to correct project" or
"salaries inadvertently charged to incorrect account" is insufficient.
- How/Why did the error occur?
- The employee's (name the employee effort was not applied to the project (name of the project and project ID#) where the salary was expensed.
- The department continued to charge the employee's (name the employee) salary to an expired project (name the project) inappropriately.
- What is the benefit of moving the effort?
- To properly reflect the effort of the employee (name the employee) in performing the tasks directly associated with the project (name the project).
- What is being done to prevent this type of expense transfer in the future?
- Department did not utilize the appropriate University mechanism (ePAR) in advance to properly identify the project in which the employee (name the employee) was applying their effort to. The department is setting into place more proactive business processes to initiate the ePAR in a timely manner preventing errors of this nature in the future.
- Untimely communication was received by the department regarding the employee's (name the employee) effort being applied to another project enabling the department to react in advance of payroll distribution.
- Why is the expense being moved so late? (Timeliness Calendar, see below)
- Reconciliation of the Distribution of Payroll was not performed within the 60 day allowance and therefore was not discovered until now. To prevent this in the future the department will reconcile within the 45 days of the ledgers close thus ensuring that all errors are realized and adjusted within the time period allowed.
Cost Transfer Calendar
expenditure originally hit:
IPT MUST be processed by ledger close of:
cost transfers must be processed within 30 days of the end date of the grant.
Ways to avoid Cost Transfers:
- If you manage a contract or grant,
anticipate receiving the award. Ahead of
time, complete a Sponsored Project Action Request (SPAR) http://nau.edu/Research/Grants-Contracts/Forms/ requesting an “at-risk” project
to be established within PeopleSoft Financials to avoid any delays of spending
authority for the sponsored project. Use
this form when:
- The funding agency makes a firm
commitment to award the contract or grant.
- It is essential to the project to
- Other funding exists to cover the
risk of the failure of the sponsored project to be awarded.
financial management control procedures:
- Use ePARs pro-actively and timely
upon notification of the project number.
- Use ePARs pro-actively during the 90-day
close out process of a sponsored project.
- Reconcile and review the distribution
of payroll expense reports to ensure that charges are accurate, complete and
- Monitor agency budgets and compare
them to actual expenditures.
- Understand the terms and conditions
of the award so you know what expenses are allowed.
- Monthly reconciliation of ledgers to
ensure that expenditures are hitting the proper account code and funding
- Be familiar with NAU’s Cost Transfer
free to work with your Post Award Administrator in developing the responses to
the questions, ways to avoid cost transfers, 90 day close out process and any
other grant management needs you may have.
Instructions and Form: