The purpose of a cost transfer is to allocate expenditures from one account to another.  At CSU, a PPDA (Past Period Distribution Adjustment) may be used to correct salary distribution to reflect where the actual effort was expended on a sponsored project (i.e., 53-account).  For all other transactions, a GEC (General Error Correction) is made.

Multiple cost transfers are a clear indication that a budget is not routinely being reviewed or reconciled and can reflect a lack of internal controls as expenditures are posting that are not appropriate for a particular award.  When a cost transfer is required, it should be requested in a timely manner (90 days or less from posting) to expediently correct mistakes.  Cost transfers should only be done for the following reasons:

• When an expense transaction is reallocated to a different account.
• When an expense is unallowable on a sponsored account.
• When the object code is incorrect.

Cost transfers should not be used to move costs for budgetary convenience (e.g., one budget has a larger balance than another) or because a 53 account was not yet available (request an ‘At Risk’ spending request when needed).  Cost transfers between 53 accounts or onto a 53 account are considered high risk and indicate a lack of internal controls and poor project management, therefore they should be adequately justified citing why the transfer is being requested (include who, what, when, where, and why was it charged to the initial account and how it benefits the receiving account).

Justifications

Justifications for cost transfers should detail why the expense was not originally charged to the account to which it is being transferred.  Simply stating that an adjustment is being made to “correct an error” or to “transfer a charge to the correct project” is not sufficient.  Examples of acceptable cost transfer justifications can be found here.  Additionally, cost transfer requests made more than 90 days after the original transaction require a plan of corrective action to prevent this type of transfer from happening in the future.

PPDA Process at CSU

A PPDA- Past Period Distribution Adjustment- is used to correct salary distribution (i.e., correct payroll entries).  Any PPDA that impacts a 53 account must be approved by the Office of Sponsored Programs (OSP).  When OSP approval is needed, the PPDA form should be submitted to the OSP PPDA mailbox (mailto: [email protected]) by emailing it directly or routing it through an electronic signature workflow like DocuSign, eSign, etc.

To appropriately direct the PPDA, the subject line of the email (or name of document if routed through electronic signature workflow) must contain the following:

(OSP Acct Tech Last Name) – PPDA (Name of person PPDA is for)

Example:  Batman – PPDA John Smith

A list of OSP Accounting Techs can be found here.

Avoid Delays!

Because PPDAs should be processed in a timely manner, it is important to avoid common mistakes that may delay PPDA approval.  The information below has been directly sourced from the CSU ecrt (effort certification) website.

Missing 2nd Department Approvals –If the PPDA impacts another department and there are no signatures on the additional department line(s), the PPDA will be returned for the necessary approvals. This will help to reduce situations where an adjustment shows up on a department’s 53 account of which they were unaware.

Inadequate Justification – It’s important to remember that a PPDA is a cost transfer. Cost Transfers are considered high risk transactions as they invite the assumption that the initial transaction was not handled properly and may be an indication of weakness in a department’s internal controls. Adjustments between 53 accounts or adjustments made more than 90 days after the original transaction are generally subject to an even higher level of scrutiny. Please see OSP’s Cost Transfer Justification Guidelines for help with completing the justification field.

Insufficient Funds – Remember to check that there are funds available in the 53 account to absorb the adjustment. OSP is generally unable to approve charges to a fully spent or over spent 53 account.

Project End Date – Adjustments made after a project has ended are also high risk transactions and require a thorough justification. TIP: When processing a PPDA on or after the project end date, don’t forget to check the account’s KFS expiration date. If an account reaches its expiration date while a PPDA is in process, it will cause the transaction to bounce to the continuation account and additional correcting entries will be required. Please contact your OSP Accounting Tech if an account expiration date needs to be extended.

Adjusting a previously certified effort period – Does this adjustment impact a previous quarter that has already been pre-reviewed and certified in ecrt? This raises the question of why the salary was certified previously if it wasn’t correct and why the adjustment was not made earlier. Reopening a previously certified project statement in ecrt should only happen in very rare instances and will require a very thorough justification.

PPDAs requiring review by two or more OSP Acct Techs – If a PPDA impacts accounts that cross OSP teams, the OSP Accounting Tech whose account is being charged will sign the form. However, any other OSP Accounting Techs with accounts impacted by the PPDA will need to review/acknowledge prior to the PPDA being approved and submitted to HR.

Volume – Workloads can fill up quickly from day to day and week to week. OSP Post Award will make every effort to review/approve PPDAs in a timely manner, however, periods with especially high numbers of new awards, federal fiscal year financial reporting periods, etc. may lengthen the PPDA turn- around time occasionally. We appreciate your patience during these stretches and welcome follow up if an adjustment is especially time sensitive.

If you have questions about cost transfers impacting a 53 account at CSU, please contact your OSP accounting tech.