This dashboard shows information on where a Cost Transfer originated (where the expense moved from). While the expense itself is not high risk for the originating budget (as the expense is being moved from the budget) these transactions can be an indicator for other high risk activities and a lack of internal controls.
Potential High Risk Activities
The expense was originally posted to a budget where the expense did not ultimately belong. This can mean:
- The sponsor of the original budget was charged for an expense that did not ultimately belong on the budget. While the expense is moved (as part of the Cost Transfer) sponsor funds were used to provide funding for the expense until it was moved. This can be perceived as the provision of an interest-free loan to cover the expense until it is moved to the correct budget.
- A high volume of Transfers (on a single Award, within a single unit, or individual PI) is an indicator of lack of Internal Controls within a department or unit.
- Transfers can be viewed as being done for budgetary convenience where expenses are moved off an over-spent Award or moved onto an under-spent Award.
- All Transfers must be documented in MyFD and such documentation is publically available and open to review. Such documentation can indicate a lack of internal controls or exposure of inappropriate financial management practices.
- A delay in transfer (more than 120 days from original posting to move) is in violation of GIM 15 and is an indication of lack of internal controls and a long period where the expense was paid by another award.
High Risk Indicators:
A high volume of Transfers by a single unit, PI, or Budget
A large number of days between expenses’ original posting and posting of Transfer. Transactions with a number of days greater than 120 is in violation of GIM 15 and should be reviewed.
A large Dollar value of an individual transaction can be an issue are large transactions have bigger impacts on budgets and billing to erroneous sponsored awards. An incorrect large transaction posted to an incorrect budget for more than 30 days is an indication of a lack of internal controls.
The following transactions are filtered out (not included) in the Dashboard:
- Transfers from Non-Sponsored Award budgets;
- An absolute value less than $100;
- Transfers between a Parent and Sub-Budget; and
- Transfers between Sub-Budgets with the same Parent.
A Cost/Expense Transfer cannot be removed from the financial system (it can be reversed but not removed) nor can the information provided in MyFD be edited or removed. Given that:
- If a Transfer was done in error or the expense moved to an incorrect budget then the expense should be moved to the correct budget.
- If a Transfer has weak or incomplete supporting information, then additional explanation can be added to the department’s records or expense file to support the Transfer in the event of a review.
- A trend high volume of transactions within a unit, or by an individual PI, or on a single award should be reviewed to determine the cause and if corrective action is needed.
- Sponsored Awards should never be used to “park” costs while waiting for an anticipated Award to be issued by the Sponsor. The Advance Budget mechanism as described in GIM 09 should be used to accommodate any pre-Award expenditures.