Journal Entry Types

Internal transfers (ITF) are the most common type of journal entries. They are used to allocate revenue and expenses from one ChartString to another and to move fund balances between projects or departments. 

Internal transfers are often made to execute transactions between departments, but they can also be made between projects, initiatives, segments, and sites. 

Examples of when an internal transfer is used: 

• Allocated Revenues: Allocation of revenues from one valid ChartString to another.
• Shared Expenses: More than one department shares in a particular expense, but one unit pays in full and allocates a portion of that expense to the other department, e.g., shared supplies.
• Recharge Centers: Charges for services provided by one department for another department, e.g., phone service provided by CUIT for departments.
• General Funds Transfer: Transfer of funds from one ChartString to another, e.g., to cover overdrafts or overruns.
• Incorrect Posting of a Journal: If a journal is accidentally posted to the wrong project, an intern.

Requirements for an Internal Transfer 

With an internal transfer, either the account is the same for both the credit and debit side of the transaction, or a “matched pair” of accounts is used. A matched pair of accounts is an account pairing that is generated by the system, and is used to maintain the integrity of the transaction. If the user creates an internal transfer where the natural account reflected a debit for “animal care” for example, the natural account on the other side of the transaction would be generated by ARC and would reflect a credit for “animal care.” 

As well, internal transfers must be created on a one-for-one basis. Where general journal entries might include three debits to offset (and equal) one credit, an internal transfer requires that one debit is used to offset one credit. Please see the Matched Pair Accounts spreadhseet for a listing of accounts with their matched pairs. 

Internal Transfers and Sponsored Projects 

Internal transfers are used to move expenses incurred on projects internal to one department in service of sponsored projects belonging to another department. In cases where sponsored projects will be affected, internal transfers on sponsored projects will be routed to SPF for review. They also require a completed Internal Transfer Justification Form as an attachment. 

A sub-set of matched pairs are used to record “Recoveries” and are typically used on service recharge center transactions to credit the department providing the service (natural accounts 690XX). The “Recovery” natural accounts should not be used on a sponsored project account. 

The guidance below serves to clarify the process for internal transfers when they involve matched pair natural accounts: 

Service Recharge Center 

• When making a correction to a service/recharge center transaction, the matched pair must always be used; however, the “Recovery” natural account should always be associated with the service/recharge center project. It should not be used on the sponsored project.
• To correct the initial transaction, reverse the signs of the transaction amount on the original transaction. 

Non-Service Recharge Center 

• Initiate the Internal Transfer Journal Entry in ARC. If the natural account selected has a matched pair the matched pair will automatically populate when the first natural account is entered.
• If the matched pair that auto-populates is a “Recovery” natural account, you can override the natural account and use the same natural account on both the debit and credit side of the transaction. 

For more information please see: the Sponsored Project Transfer Guide.