Exceptional Approval for Cost Notes 1 & 2

Typically when you see Cost Note 1 or 2 while reviewing the Preview Screen, it means the issue needs to be corrected by processing a payroll transfer. There are two scenarios when a PCS Report with Cost Note 1 or 2 can be granted exceptional approval by the Central Payroll Certification Administrator (CPCA) in Contracts and Grants Accounting.

Exceptional Approval is only used for processing PCS reports that generate Cost Note 1 which is related to the NSF 2-month salary limitation, or Cost Note 2 programmed to flag salaries that may have exceeded the current DHHS salary cap. In both cases a detailed review of salary entries needs to be performed and salary transfers may be required.

cost note warning messages

Cost Note 1 and 2 Warning Messages

The following error message is displayed in PC Preview screen whenever Cost Note 1 or 2 is generated:

"You must perform salary transfer to eliminate Cost Note 1 or 2. If you want to certify with Cost Note 1 or 2, the document will route to the central CG office for an exceptional approval."

If the payroll expense needs to be corrected to comply with Cost Note 1 or 2, close the PC Preview Screen and process the required corrections. If based on your review corrections are not required because the PI has received an approval from NSF to charge salaries in excess of the 2-month salary restriction, or some other special exceptions exist, the PCS report may move forward to the next step of the certification process. All exceptions have to be well supported with an additional backup and will be reviewed and confirmed by the CPCA.

Updating Notes and Attachments

You should immediately update the Notes and Attachments tab with a note indicating why the payroll expense is allowed and in compliance with Cost Note 1 or 2. The reason can be added to the Note Text field.

You should also attach additional documentation to back up your note in Attachment field. This must be in PDF format.

notes and attachments field

Next, Start Certification button at the bottom of Preview Screen and you will receive a message once again stating that the document will route to the central CG office for exceptional approval if you don’t process a salary transfer. Click Yes to proceed.

start certification and close buttons

The PCS Report will route to the CPCA for review and approval, and you will be directed back to the C&G Certification Tracking Lookup page.

Next Steps

After you add your notes and attachments and submit the PCS Report:

  • The PCS Report will automatically route to the CPCA, instead of to the PI.
  • The CPCA will review the PCS Report and approve it if all exceptions are well justified and can be allowed.
  • The report will route back to you (DPCA) for review and submittal to the PI for certification according to the standard process.