Best Practices for Payroll Redistributions on Sponsored Projects

RAs – please share this blog with your business and/or HR office staff who handle payroll redistributions.

Fiscal Oversight has been experiencing a high volume of requests for payroll redistributions (PRRs). Redistributions raise an audit red flag; therefore, they should be kept to a minimum. Additionally, the Fiscal Oversight Fiscal Compliance Team is having to return a lot of PRRs due to the following issues:

  • PRRs being submitted outside the 90-day window
  • Inadequate responses to the PRR questionnaire
  • Requests to redistribute payroll onto accounts in deficit
  • Requests to redistribute payroll for pay periods outside the approved period of performance

To reduce the number of required payroll redistributions on sponsored projects, and to ensure that any required PRR can be approved, units are encouraged to follow the best practices included below:

Payroll Reconciliation

Units should make every effort to allocate sponsored project costs to the appropriate account(s) at the time costs are initially incurred. To ensure that all payroll is posting to the correct account(s), all payroll expenditures should be reconciled within 30 days of month end close in accordance with ASU FIN 201. Units that do not have an existing process to reconcile payroll expenditures are encouraged to review the Financial Services – Best Practices for Reconciling Payroll Expenses.

Determining 90-Day Window

Requests to redistribute payroll onto a sponsored project should be processed in accordance with the 90-Day Policy. There has been a fairly high volume of PRRs over 90 days, and some confusion about calculating the 90-day window.  As a reminder, the 90 days start from the close date of the month of the accounting date of the Workday payroll journal.  Note that 90-day exceptions are rarely being granted due to the much higher audit risk, and they indicate monthly payroll reconciliations are not being completed in accordance with ASU FIN 201. To determine the month end close date, refer to the FMS Calendars.


Pay Period End Date: 11/17/2019
Date Posted in Workday: 11/21/2019
Month End Close Date: 12/05/2019
90 Day Window: 03/04/2020

Payroll Redistribution Questionnaire

When processing PRRs, units are required to complete a questionnaire that includes four required questions/response requests. A large number of PRRs are being returned by the Fiscal Oversight Fiscal Compliance Team (FCT) because the justifications do not address the actual question/request. Audits, both at ASU and other universities, are driving the need for more comprehensive justifications. When completing the questionnaire:

  • Please read each question/response request carefully.
  • Make sure the justifications are tailored specifically to the employee, the specific circumstances surrounding the cause of the PRR, and the specific tasks the employee performed during the redistribution period. 
  • Each answer box within the questionnaire, defaults to a 255-character limit. If needed, click on the “Addt’l Text” icon next to the appropriate answer box to be allowed to enter an unlimited number of characters.

To better illustrate how the questionnaire should be completed, below are two examples of appropriate responses to each of the four questions/response requets in the questionnaire (note that these are NOT a template to be used repeatedly).

Reason why payroll expenses are being transferred.  Explain how or why the error occurred.

Appropriate ResponseInappropriate Response
The PI notified their administrator that the student was working on a research project after the student changed work priorities.

Employee was working on project when the period of performance terminated due to a delayed response from the sponsor. To continue work on the project the PI used their startup funds to maintain support.
The mention of “effort” in relation to the prior effort reporting system
(effort reporting was discontinued two years ago); the mention of ‘spend down’; No error; N/A; PI wanted to move this charge. Note: do not throw any individual or unit under the bus!

Note that there should still be a brief explanation for moving payroll OFF a grant as auditors tend to ask why the payroll got put on the grant in the first place if it was not supposed to be.

What corrective action will be taken to avoid this type of error in the future?

Appropriate ResponseInappropriate Response

The PI has been notified that administrative staff need to be notified of student mapping changes prior to the fact.

The account has been reactivated. In the future at-risk status will be requested.

No corrective action could have been taken; No error; N/A (except when moving payroll OFF a grant).

Describe why all costs transferred to new accounts are allowable, allocable, and reasonable charges. Additionally, if a sponsored account, describe the tasks performed that were appropriate and necessary to the performance of the sponsored project.

Appropriate ResponseInappropriate Response

A graduate student position was written into the research proposal. This employee has been working on developing an approach to examine the impact of fault induced delayed voltage recovery in the presence of increased penetration of renewable resources.

During this time the employee was working on sample analysis and archival of pertinent data as identified in the SOW.

This redistribution reflects activity on the grant; Allowable because the Post-Doc dedicated 100% of her effort to the grant; N/A (except when moving payroll OFF a grant). 

Note that the tasks performed must be actual tasks performed by the employee whose pay is being redistributed at the time of the pay end date, not a list of tasks listed in the SOW or budget justification.  Allowability and tasks performed are not required if payroll is being moved OFF a grant.  “N/A” is allowable in this situation.

Other Best Practices

  • To avoid delays of PRR approvals due to pending award changes, units are advised to use at-risk accounts as needed, submit requests for award changes early and monitor pending award modifications to ensure Workday/ERA award data is correct. As part of the PRR review process, FOT uses ERA and Workday data to verify 1) account balances and 2) approved project period dates. FOT cannot approve PRRs on accounts that have a deficit (exclusive of encumbrances) until the deficit is cleared. It is similar with grant start/end dates – when there is a pre-award spending or a no-cost extension, the dates need to be updated in Workday or ERA before a PRR can be approved that has a pay end date outside the grant period.
  • System integration issues can impact the PRR review and approval process. While system issues should continue to be reported using the appropriate channels, units planning to submit PRRs  due to known system integration issues should contact so that FOT can coordinate with AMT to process redistributions rather than returning them.