Table of Contents>Budget Reallocation
PURPOSE
· To provide a best practice for determining when sponsored projects should be rebudgeted and how to rebudget them.


POLICY STATEMENT

· Sponsored Project Manual (Research Services) http://www.upenn.edu/researchservices/spmanual/index.html


REASON FOR PROCEDURE

· To bring grant budgets into conformity with revised planned expenditures.


WHO SHOULD BE KNOW THIS PROCEDURE

· Deans
· Center and Institute Directors
· Department Chairs
· School of Medicine Administration
· School of Medicine Faculty/Investigators
· Business Administrators
· Office of Research Support Services
· Penn Research Services


GENERAL INSTRUCTIONS

· Specific circumstances which may require budget reallocations:
1. When the Principal Investigator (PI) determines that expenditures are required for items not anticipated in the proposed budget.
2. When the transaction results in a shift between categories that incur indirect costs, and those that do not. In this case, be sure to rebudget between the direct and indirect costs, as well as between the direct cost categories affected.
3. When costs will be incurred in a category that was not in the original budget. For example, equipment was not included in the budget, but a piece of specialized equipment, necessary to perform the research, is purchased.
4. When an increase in a subcontract/consortium agreement results in the total agreement for the project period exceeding the $25K threshold.
· Budget reallocations involve moving funds from one budget category to another without increasing the total amount of the award. Depending on the sponsor and type of award, the procedure for reallocating budgets will vary.

· Types of Budget Reallocations

1. Federal Grants Awarded under the Federal Demonstration Project
If the budget reallocation constitutes a change in project scope, permission of the sponsor is required for all FDP agencies. For the NIH, significant rebudgeting means that a single direct cost category changes more than 25 percent of the total award or $250,000, whichever is less.
http://www.fdp3.org/
http://www.upenn.edu/researchservices/spmanual/changes.html#fdp-matrix


2. Federal Grants not Awarded under the Federal Demonstration Project but Awarded under Expanded Authorities

Most federal agencies have waived cost-related prior approvals and allow an institution to decide minor budget changes under expanded authorities. Under expanded authorities, significant rebudgeting means that a single direct cost category changes more than 25 percent of the total award or $250,000, whichever is less. These expanded authorities are automatically in force for grants that support research, but they do not apply to contracts.

3. Awards from Private Foundations
Each foundation will have its own rules for rebudgeting. Some will allow rebudgeting within categories up to a certain percentage or dollar limit. Some will allow rebudgeting within categories so long as particular categories are not increased. Most will require the written permission of the sponsor outside the stated limits.

4. Contracts
Conform to the specific language of the contract.

PROCEDURES
· Consult with the PI to determine if rebudgeting is needed. Write a brief summary explaining why this rebudgeting action is needed and how it will benefit the grant.
· Refer to the terms and conditions of the award, the original budget and the sponsor's guidelines to determine if the proposed rebudgeting action is allowable. If under FDP, verify that the rebudgeting does not exceed 25% of the original budget.
· If the proposed budget reallocation is allowable, determine whether it is within the institution's authority or if the permission of the sponsor is required.
· If the proposed budget reallocation is within the institution's authority, initiate a FinMIS budget journal.
· If the proposed budget reallocation requires the permission of the sponsor, the principal investigator must write a letter to the sponsor stating clearly what budget reallocation is proposed and how that reallocation will benefit the project. This letter should be countersigned by Research Services. Select sponsors require institutional approval.
· When the sponsor's permission is obtained, initiate a FinMIS budget journal.
· In all cases, retain the original authorization from the sponsor or the PI's justification for the department grant file. Forward a copy of the sponsor's authorization of PI's request to Research Services for inclusion in the grant file. This will avoid many problems when it is time to close out the grant.
· Print the budget journal worksheet and have PI sign.
· Verify the budget, either online or by printing off a report.

· Entering the journal entry into FinMIS
1. Go to https://titan.isc-seo.upenn.edu:8001/OA_HTML/US/ICXINDEX.htm
2. Click to Enter the Business Enterprise Network
3. Enter your username and password, then [Connect]
4. Choose the GL Budget Entry (Secured) GUI responsibility
5. Double click on Budget Journal
6. Enter Batch Name using the batch naming convention (xxxx.zzz.mm/dd/yy.nn)
7. Balance Type should be "B," display only
8. Budget defaults to "Operating"
9. Fiscal Year defaults to current fiscal year (may need to change fiscal year; enter budget for grant/contract into first full accounting period of the award)
10. Period defaults to the current open period (enter budget for grant/contract into first full accounting period of the award)
11. Select appropriate category (Click on Edit>LOV or LOV Toolbar icon, or type in 20 Budget New Account, 21 Budget Increase, 22 Budget Reallocation, or 23 Budget Decrease)
12. Source, display only
13. Posting Status, display only
14. Funds Status, display only
15. Enter a description for the journal entry
16. Enter a control total (if the control total matches the greater of total debits or total credits entered, the journal will post automatically)
17. Select a line description default (selecting 'Object Code' will populate the line description field with the Object Code description; selecting 'Description' will populate the line description field with the description for the JE; selecting 'Both' will populate the line description field with the object code description AND the description of the JE)
18. Click on [Find Accounts] and enter a fund number. Enter an ORG ONLY when the fund number begins with zero. Other segments are optional; when used, enter all digits of the segment(s) (no wildcards).
19. After completing the search parameter(s), click [OK].
20. Click on [Find] in the Find Accounts window.
21. The lines will automatically be populated in your batch with the account numbers that match the search criteria.
22. Complete the debit/credit amount for each line that you want to budget. Be sure to tab out of the amount fields to update the journal. You won't need to delete lines that you don't want to budget.
23. Click on [Recalculate] to make sure that the Total Budget amount displayed is correct for each occurrence of the account combination in the batch.
24. Click on Action>Save, or the save button on the toolbar.
25. Click on Check Funds
26. Click on Reserve Funds

CONTACTS
· Departmental Business Administrators
· Department Chair
· Office of Research Support Services
· Research Services


FORMS AND ATTACHMENTS

· Website for Budget Journal Entry Form: (ORSS)
http://www.med.upenn.edu/research/penn/documents/budgetjl.xls

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