Category Archives: Announcements

Introducing TRACE: AI support for Non-Labor Cost Transfer Compliance

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Embracing Innovation: AI-Powered Support at Rice

Rice University is leaning into the future of research administration. Staff at Rice have been issued licensed access to advanced AI tools.

“…We’re excited to see how these tools will support the collective work of the campus community and how they might inspire new ways to collaborate and innovate,” said Kelly Fox, executive vice president for operations, finance and support. “This initiative reflects Rice’s commitment to integrating cutting-edge technology to empower our campus with advanced AI capabilities across teaching, research and administrative work.”

Research and Cost Accounting (RCA) has been highly engaged in exploring ways to leverage these exciting new tools to streamline operations and ensure compliance, while also strictly adhering to Rice’s guidelines for responsible use, data privacy, and attribution.

One of the standout tools available to Rice staff to support administrative work is NotebookLM. This isn’t your average chatbot; it creates a bounded, secure environment configured to minimize “hallucinations” (AI guessing). By grounding its advice in a vast library of specific source documents – including Uniform Guidance, funder requirements, and Rice policies -NotebookLM offers expert-level guidance backed by direct citations. It is designed to deliver highly accurate, compliant, day-to-day advice you can trust.

Meet TRACE: Your Partner for Non-Labor Cost Transfers

Navigating the rules for Cost Transfers – especially involving federal funds – can be complex. To transform this process, RCA is pleased to introduce TRACE (Transfer Review and Compliance Expert).

TRACE is designed to do the heavy lifting: minimizing the risk of rejected transfers, accelerating processing times, and preventing compliance delays on your research projects.

TRACE. What is it?

What is TRACE (Beta v0.3)?

Currently in an opt-in beta phase, TRACE is an intelligent assistant designed to support submitters with two critical functions of the Non-Labor Cost Transfer (NLCT) process.

What TRACE is not

TRACE is a support tool and is not a final authority. Responsibility for the final content of submitted cost transfers (and their justification) remains that of the submitter.

Function 1: Crafting Stronger Justifications

Transactions involving federal funds are subject to strict scrutiny. TRACE empowers you to evaluate and articulate the three pillars of a strong justification – essential for RCA approval:

  1. Root Cause: Accurately identifying why the error occurred.

  2. Prevention: Articulating the corrective actions to stop recurrence.

  3. Allocability: Proving the expense directly benefits the destination project.

> Note: TRACE is particularly powerful at helping you substantiate allocability, often the most challenging part of the justification.

Function 2: Step-by-Step Process Guidance

Beyond compliance rules, TRACE acts as your navigational guide. It provides clear, step-by-step instructions on preparing and submitting an NLCT at Rice. Whether you are posting to the Project Portfolio Management (PPM) subledger or the General Ledger (COA), TRACE ensures you capture the right data correctly from the start.

How to Access TRACE

Ready to streamline your workflow? TRACE is integrated directly into your existing tools.

  • Via Templates: You will find a direct access link on the current versions of the Non-Labor Cost Transfer templates (located towards the middle right of the cover page).

  • The tool can also be accessed directly here.

  • Guidance on how to use the tool can be found here.

Secure and Private

We take security seriously. While the guidance documentation is open to all, access to TRACE is strictly controlled via your Rice NetID.

  • Requesting Access: When you click the link for the first time, you will be prompted to submit an access request. This is specific to you and non-transferable.

  • Your Data is Yours: Each user has a persistent, private chat history. Your queries and findings are visible only to you; there is no “cross-pollination” of data between users of the tool.

Next Steps

Currently TRACE is a beta tool (i.e. it is in development with refinements to it expected over time). Feedback will lead to updates to its core logic and how its source documents are structured and selected for inclusion.

Your feedback on this beta tool is highly valuable.  Identifying the need for improvements will help drive those forward. Please provide feedback (positive and negative please!) via this google form.

Residual Balance Roadmap: Choosing Your Fixed Cost Project Transfer Pathway

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When a fixed price sponsored project wraps up with a residual balance, the transfer process is changing. Previously, we relied on a general, COA-level balance transfer, which lacked the PPM specificity needed for clear management and accounting control. With technical support from FIS, RCA has improved this process.

As of November 2025, when a fixed price sponsored project concludes with a residual balance that residual will be addressed through the generation of a non-billable cost that will post both to the sponsored project (debit) and to the destination location that the residual balance is being transferred to (credit).

What this means for a PI or Project Manager is that when interacting with RCA Grant Specialists during the closeout phase of such a fixed price award, the destination for the residual balance needs to be stated in the following ways to RCA.

  • Destination: Faculty Fund (PPM Project)

    • Required Data: The Faculty Fund Project Number and the Task Number.
    • Condition: Department must ensure the Faculty Fund destination is active prior to submitting the request.

  • Destination: General Ledger (COA String)

    • Required Data: The full COA string.
    • Condition: The Account segment (the fifth segment) must be 6800.

If the destination for the residual is a Faculty Fund, a negative expense (credit) will be posted there (Expenditure Type: TXF: Transfers – Inter / Intra Departmental)

If the destination for the residual is a COA, a negative expense (credit) will post to account code 6800. 

In either destination case, the negative expense will increase the balance there correspondingly.

Customization Option for Budget to Actuals Detail SPFF (for viewing Faculty Funds)

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OTBI dashboards (ROBI) developed in 2021 had the capacity to review Faculty Fund balances by task line. For those users who continue to use ROBI because of this view, and worry that this view will be lost to them when the tool is ultimately decommissioned, we have good news.

Faculty Fund balances by task line can be replicated exactly in iO using the SPFF Budget to Actuals Dashboard.

To replicate the view, search for the faculty fund by project number.
Once the results of the analysis load, simply right click on the ‘Expenditure Category’ column and click ‘exclude’.

Non Labor Cost Transfers. The Basics, an Update, and a Reminder

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Processing NLCTs (The Basics)

When processing Non Labor Cost Transfers, the template you use to submit the transfer depends on the origin data.

When the origin data is a cost on a project, use the PPM template.

When the origin data is a cost that is not on a project, use the COA template.

Both templates have a similar appearance, and they operate very similarly, but their internal workings are different and are thus not interchangeable. For full step-by-step guidance use this guide.

COA Template. Version 1.12. (An Update)

Several submitters noticed a bug within earlier versions where uploaded lines to the ‘TNC2 data’ tab were not appearing in the ‘TNC2’ tab upon refresh. The cause of this rare issue has been identified and the template has now been fixed in version 1.12.

Cost Transfer Compliance (A Reminder)

Approvals for NLCTs MUST ALWAYS be added to iO tickets prior to submission (unless the submitter is also both the origin and destination approver in which case no approval is needed). The approvals should take the form of the adobe sign PDF, signed by both origin and destination approvers, as indicated in the instructions within in the templates.

As detailed in box 2 of the cover page of each of the templates, and in Rice policy 302, there are some clear compliance expectations that MUST ALWAYS be met by cost transfer submitters when justifying a cost transfer in box 3 of the cover page.

PPM Template (excerpts from cover page):

1) How were the original costs miscategorized, charged to the wrong project(s), or allocated to the wrong task(s)?

2) If type is PPM-PPM, are the costs allowable and allocable to the receiving project(s)? (i.e does each line of the transfer meet cost principles, funder rules, and is within bounds of funder approved budget categories)?

3) What steps will be taken to prevent recurrence?

COA Template (excerpts from cover page):

1) Why were the original costs mischarged?

2) Are the costs allowable and allocable to the receiving project(s) and/or COA string locations? Does each line of the transfer that has a PPM destination meet corresponding cost principles, funder rules, and remain within bounds of funder approved budget categories)?

3) What steps will be taken to prevent recurrence?

Policy 302 (excerpts from policy page)

“Unallowable or inappropriate charges that appear on a sponsored project fund must be moved promptly to an appropriate fund. Cost transfers must be timely, well-documented and properly approved.”

“Charges to a sponsored project fund should be reviewed periodically by the PI and reconciled regularly by staff within each department or school so that erroneous charges may be identified and corrected promptly. Timely means that a transfer should be initiated as soon as an error is detected but normally within 90 days following the last day of the month in which the charge first appears on the fund.”

Net Zero Costs in PPM. What They Are & Why They Matter?

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Cost Transfers 101 and Net Zero Costs. Summary

  • A cost transfer is the process of moving a transaction (the financial record) from one funding source (e.g., a specific grant (PPM) or departmental account (COA) to another after the initial transaction has been recorded.
  • When you initiate a cost transfer, you are creating an offset transaction in the original location (zeroing out the expense) and generating a corresponding, consistent transaction in the destination location, effectively relocating the expense’s financial record.
  • Before transferring a cost check to see if there’s an equivalent opposite polarity cost (either negative or positive) that has the same Expenditure Type and Item Date. If such a cost exists, it might be a Net Zero transaction and thus not transferrable. See the ‘Identification of Net Zero Costs’ below on how to confirm for sure if it is or is not?

Maintaining Financial Compliance

Administrative staff engaged in project financial management occasionally need to adjust and transfer project costs. However, a specific transaction type—the Net Zero Cost—is systematically restricted from further transfers or manipulation.

This restriction is not a system error; it is a critical automated safeguard. The principle of the Net Zero Cost ensures that the Project Portfolio Management (PPM) subledger maintains absolute synchronization and balance with the General Ledger (GL). Identifying the Net Zero Item flag is essential for administrative efficiency, as attempting to adjust these items will result in immediate system rejection, confirming that the transaction’s accounting role has already been fulfilled as a cancellation record

The Three Part Transaction Model

A Net Zero Cost transaction is a specialized, negative accounting entry generated automatically by the system to execute the formal reversal of a prior expenditure item. Its function is cancellation; it does not represent an actual, allocable expense.

Cost corrections in PPM always utilize a three-part transaction model :

  • Original Cost: The initial expense containing the incorrect allocation.

  • Reversal Cost (The Net Zero Item): The negative entry that mathematically and functionally cancels the Original Cost.
  • New Cost: The corrected charge applied to the appropriate project elements.

The Net Zero Item attribute is the field that explicitly identifies the Reversal Cost as True. This confirms that the transaction is the necessary offset, designed to create a zero balance for the pair.

Net Zero Costs cannot be transferred because they are defined as reversed expenditure items and are explicitly disallowed from further adjustment.

Protecting the Audit Trail

The Net Zero transaction’s sole purpose is cancellation. If a transfer were permitted on the Net Zero transaction, the original charge would become effectively uncanceled at its source. The transfer is rejected to maintain the integrity of the audit sequence, as the Net Zero entry is the immutable record linking the cancellation back to the original source charge. Disruption of this linkage results in the system issuing a mandatory rejection message stating that adjustments are not allowed on a reversed expenditure item.

Identification of Net Zero Costs

Right now, there’s only one place in iO where you can confirm the status of a transaction relative to it being part of a net zero pair.

Go to Grants Management/Awards

Click on the Page icon on the right of the page

Search for the award that contains the project that contains the cost. Click on the drop down next to the project that contains the cost. Select Manage Project Costs

If this is the first time that you’ve ever looked at this Project Costs view, you may need to ensure that the net zero column is selected.

When examining the row with the cost that you are considering transferring, you can see the net zero column that indicates if it is or isn’t a net zero transaction.

When you see an x, it is not a net zero transaction and is transferrable. If you see a tick mark, it is a net zero transaction and it is not transferrable.

What’s Next?

The Non Labor Cost Transfer method will not process transfers based on net zero transactions at the point of processing.

Currently, SPFF Expense Detail does not contain the net zero field, meaning that the submission template cannot filter these costs out automatically at the start. This means it is possible for people to attempt to instruct transfers that contain net zero transactions even though those transfers cannot and will not ultimately process to iO.

To avoid the frustration, confusion, and misinterpretation that might arise surrounding such submissions that cannot complete, FIS intend to add the net zero field as a column to SPFF Expense Detail (planned implementation is during calendar year 2025).

Once implemented, it will enable all the relevant cost information relating to the potential for a cost to be transferrable to exist in one (SPFF Expense Detail) dashboard, and for the NLCT tool to filter out such costs prior to submission (as it already does with other ineligible costs like F&A and labor).

Enhancement to Project Cost and Revenue Accounting at Rice (for Service Centers and Auxiliaries)

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RCA are rolling out important, mandatory updates to how service centers and auxiliary units charge costs to sponsored projects and faculty funds, and how the corresponding revenue is recorded. These changes are the result of work by the Service Center Task Force and are designed to prevent transaction errors, eliminate duplicate entries, and significantly simplify your monthly and period-end reconciliation processes.

Please read this communication carefully, as these new protocols are effective immediately.

1. The Core Change: Two Distinct Accounting Paths

The biggest change involves separating transactions into two distinct methods based on where the cost is being charged (the destination).

Scenario A: Cost to a COA (General Ledger) String

  • Destination: General Ledger (Chart of Accounts – COA)
  • Method: FBDI (File-Based Data Import)
  • Rule: The FBDI template must only be used for COA-COA transactions. This includes both cost transfers and the traditional cost/revenue accounting where the cost and the corresponding revenue are recorded as two separate lines within the COA.

Scenario B: Cost to a Project/Task (Sponsored Project or Faculty Fund)

  • Destination: Project Portfolio Management (PPM – Project/Task)
  • Method: New ADFdi (Application Desktop Integrator) Tool
  • Rule: This is the new, all-in-one method. Using the dedicated ADFdi tool will now automatically:
    1. Generate the cost to the specified Project/Task.
    2. Simultaneously and automatically record the corresponding revenue to your service center or auxiliary unit.
  • Crucial Note: FBDI templates can no longer be used to create GL costs or revenue relative to any PPM/Project transactions created (using 1087 account code). Any FBDI submission that attempts to record revenue or a cost transfer to a Project/Task (1087 account code) will be rejected by General Accounting.

The ADFdi method ensures that the cost and its corresponding revenue are successfully linked and posted together, which is the key to accurate and easy reconciliation.

2. Introducing the Pre-Submission Validation Tool

To ensure a smooth transition to the new ADFdi process (Scenario B), we’ve incorporated a powerful pre-submission validation tool directly into the template. Before you attempt to post a transaction, the tool will perform critical checks, including:

  • Period of Performance: Verifies the transaction date is within the eligible project period.
  • Task Number Viability: Confirms the Task number is valid for the selected Project or Faculty Fund.
  • Project Status: Checks that the Project is Active and not Closed.

This validation will save your teams significant time by catching common errors before a failed posting attempt, allowing you to quickly communicate accurate information to your customers.

3. Training and Next Steps

We understand these are significant procedural changes.

An introductory training session will take place via zoom on October 15th at 11am.

[EDIT – see video recording of this session]

This change is going to primarily impact Service Centers (SEA, Chem Stockroom etc.) and Auxiliaries (Housing & Dining, Post Office etc.) but attendance is not limited. All are welcome.

Link for 27th at 11.30

Following this zoom training, there will also be an in person training session in Moody 205 (11.30-13.00) where we will do a walk through of the new ADFdi template, submission process, and validation tool. Details on this training will be added to this post, and communicated via the research-l listserve as soon as they are known.

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If you have an urgent need to use the new ADFdi template to generate a cost/revenue transaction in the next two weeks, please reach out to James Hayward (jth6) in the Controller’s Office for assistance. Otherwise, please save your questions for the scheduled training session.

Thank you for your cooperation as we implement these necessary controls for more accurate and efficient accounting at Rice.

Upcoming Changes to Internally Funded Projects (Cost Share)

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Overview of Changes

Effective July 1, 2025 (FY26), we’re changing how we account for certain research awards to improve tracking. Instead of using the single 012000 (Internal Projects) fund source, new projects will use specific, dedicated fund sources that better reflect their purpose.

Here are the new fund sources:

  • 012100 for Cost Share projects
  • 012110 for Deficit Projects
  • 012120 for Salary Cap Projects
  • 012130 for Interest Earned Projects

This means that a new Cost Share project, for example, will now be set up with its own fund source: 012100.

Impact on Current Projects

The new fund sources apply only to projects with a start date of July 1, 2025, or later. Projects created before this date cannot be converted.

To ensure consistency, Research and Cost Accounting will take the following steps for all 59 active awards with an existing cost share component:

  1. A new project with the 012100 fund source will be created for each affected award.
  2. The project number for this new project will be communicated to the Project Manager (PM) and the Principal Investigator (PI).
  3. Any costs posted to the old project on or after July 1, 2025, will be transferred to the new project.
  4. The old project will be closed.

It’s important to remember that for reporting purposes, you will need to consider the budgets and costs of both the old and new projects together. Both projects will be accessible within the same award for easy data retrieval.

Project Transition & Budget Management

The old “Internal” cost share project will remain open until its award closes or until September 30, 2025, whichever comes first.

  • All cost transfers related to the old project must be completed and posted in iO before the project closes.
  • Once the old project is closed, its budget balance will be calculated. If the balance is negative, the project will be closed, and the PI and department will need to communicate a management plan to Research and Cost Accounting before it can be reopened.
  • If the balance is positive, the remaining budget will be transferred to the new “Cost Share” project.

For active labor distributions on old projects, Payroll will automatically update them to apply to the new “Cost Share” project starting July 1, 2025.

Project Managers for impacted awards have been contacted directly by e-mail with the above message. If you have any questions, please feel free to respond to that e-mail or to contact Research and Cost Accounting (rchacctg@rice.edu).

OAC Dashboards (Finance Dashboard and Sponsored Projects and Faculty Funds Dashboard)

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EDIT (8/19/25. 3.14PM) While the dashboards have returned and can be used, we are aware that there are issues across SPFF with dashboard prompts not running analyses in the way they should. The cause of this issue has been diagnosed and the team is on it. It will very likely not be before tomorrow (8/20/25) that we are able to say how long this will take to fix. I will update this post with information as it becomes available.

EDIT (8/20/25. 8.59 AM) Dashboards are now operational.