The setting is in: Administration Center > Features > Projects.
Use hours reported in deal time sheets to calculate project fields Actual Hours and Actual People Costs gives you the opportunity to set that the time sheets related to the deal will be converted to people costs of a project when the deal is converted to project. More information can be found in the chapter: Projects Module Introduction.
Click Add Time Sheets From Deals to Calculation of People Costs and Worked Hours on Project to turn the setting on/off.
If the function is turned on, timesheets from the deal will become people costs of the project the deal was converted to.
If the function is turned off, the automatic addition of timesheets from the deal to a project is deactivated.
When you change the settings, be sure to click Save. For more information, go to Features.