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Reallocation of Expenditures

Reallocation of expenditures from one index to another is occasionally necessary to correct bookkeeping or clerical errors in original charges. All such transfers must be made promptly after discovery of the errors.  In the examination of expenditure reallocations, auditors are especially skeptical involving projects in a deficit condition or those having unexpended funds at the expiration date. Any expenditure allocable to a particular sponsored project may not be shifted to other sponsored projects in order to meet deficiencies caused by overruns. If such conditions exist, it is particularly essential to provide convincing evidence that the reallocation is not for reasons of budgetary convenience.

All expenditure reallocations should be made within 90 days of the original charge. Reallocation requests must be presented on the Reallocation of Expenditures form. The Principal Investigator of each index involved in the reallocation is required to sign the form.  If the reallocation is for expenditures that are more than 60 days after the date of the original charge the Department Chair/Director signature for all department affected is required.  If the reallocation is for expenditures that are more than 90 days after the date of the original charge the Dean/VP for all areas affected is required.  Address the form to Accounting Services.  The form must be filled out in its entirety to be approved (see Procedures for the Reallocation of Expenditures Form).  If any portion of the form is incomplete or inaccurate it will be returned to the requestor.

Due to the fact that closely related work may be supported by more than one funding source, the reallocation of expenditures from one source of funding support to another may be allowable.  Provided that:

1. The expenditure is an allowable charge.
2. The initial charge could have been appropriately charged to the other project.
3. The charge is represented in the approved budgets of both projects.
4. The reallocation is clear as to why the particular charge is appropriate to either of the projects.

Reallocations of charges from University indexes to sponsored projects for phone charges, copy charges, mailroom charges, and credit card charges normally charged to a departmental indexes are not required to provide the justification for the reallocation and do not need to obtain the signature of the Principal Investigator. The quantity and dates of the charges must be included in the description. This type of reallocation should be done on a monthly basis or at least within 90 days of the original charge. It is the department’s responsibility to keep complete documentation for this type of reallocation.

The Research Accounting Office is responsible for reviewing and approving all reallocation requests, payroll or non-payroll, before they can be processed into the accounting system. The review is to ensure compliance with these guidelines. The Research Accounting Office may return requests to the departments for additional documentation when necessary.

Frequent or inadequately documented reallocations raise serious questions about the propriety of the reallocations themselves as well as the overall reliability of the University’s accounting system. Auditing agencies will review items of this nature; therefore it is important that departments have procedures in place, which ensure accurate charging of expenditures.