Cost Center Reactivation

Cost Center Reactivation Process

There are many circumstances in which it is necessary to reactivate closed/inactivated cost centers. Typical circumstances include:

• Department Need
• Payroll Journal Process
• Grant Clean Up/Close Out

Department Need

The circumstances in which a department may need to reactivate a closed cost center vary. A department may have a renewed need for a cost center that was previously closed due to inactivity or lack of funds. Instead of creating a new cost center which has the same purpose and usage as a previously closed one, the department may opt to reactivate an existing one.

Reactivation Due to Payroll Journals

I. As part of the payroll journal posting process, any cost centers that are inactive will be reactivated so that the journal can post.

The circumstances under which it is necessary to activate cost centers typically fall under a payroll journal scenario where the journal posting cannot be delayed as it affects a large group of activity that must be processed in a timely manner. In such cases, the Budget Office notifies the affected department of the activation (only for non-project and grant cost centers) and provides the journal number so that the department is aware of the occurrence. Further, the cost center cannot be inactivated at that point because as a result of the payroll expense, there is activity on the cost center.

According to DOR, project/grant cost centers dates are extended to allow for the posting of such journals consistent with the circumstances described above.

It is important to recognize that payroll journals are created from the source system HRMS and thus any corrections must originate from the source system. We will continue to work with HR and DOR to try to come up with a solution.

(Reference: Explanation via email from Barbara Duarte, Executive Director, Budget, 1/28/16)

II. The college and/or department administrator will be notified of any cost centers that have been reactivated for purposes of posting a payroll journal. The college will forward the information to the Department Business Administrator (DBA) with instructions to proceed as follows.

III. The department is responsible for reconciling the posted transaction, taking appropriate action to fund or reallocate the transaction, and subsequently process a request to inactivate the cost center again. The department should proceed as follows:

1. Make note of the pending journal and add to your department's financial records as a pending transaction.
2. Determine which of the following actions will be required and plan to proceed accordingly:
   1. additional funds need to be transferred into the cost center to cover the pending payroll transaction(s), or
   2. a reallocation to move to the expense to another cost center will be necessary.
3. Follow up during the next reconciliation period to ensure the journal has posted and any necessary action (fund transfer or reallocation) has posted.
4. Once the journal and any required actions have posted and the cost center is once again at a zero balance, complete a "Cost Center Action Form" to inactivate the cost center.

Grant Clean Up/Close Out

Besides reactivation due to payroll journals as described above, any other reactivation of project/grant cost centers must be coordinated through the Office of Contracts and Grants (OCG). Under certain acceptable circumstances, OCG extends the grant end date to allow for the posting of the transaction. This may be necessary to remove an unallowable expense, correct an account code, or other circumstances in which financial records must be in compliance with sponsor guidelines and/or reporting.

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