About Cost Transfers
Cost transfers are the reassignment of expenses to or from sponsored projects after initially being charged to a separate funding source. This is accomplished by processing payroll adjustments and journal entries that involve sponsored projects.
There are two types of cost transfers processed by Research Accounting, salary transfers and general expense (non-salary) transfers. Initial charges by Service Centers are not considered cost transfers.
Principal Investigators and Department Administrators should ensure charges to sponsored projects are accurate and in accordance with direct charging practices described in OMB Circular A-21 and university policy. On a monthly basis, the Department Administrator should run financial reports for each sponsored project using Boston University’s Grants Management (Distributed) Reports, which are found in the “Reporting” tab of the BUWorks Central Portal. The administrator should work with the PI to review these reports to identify legitimate errors.
Salary adjustments and non salary cost transfers are allowable if they are initiated to correct such errors, made on a timely basis and include appropriate justification and supporting documentation. Moreover, the costs being transferred must be allocable to the award the charges are being transferred to, if applicable.
The University’s records must contain appropriate documentation supporting an adequate evaluation of the transfer. The results must be accurate and complete. Frequent, tardy, or inadequately explained transfers, especially when they involve accounts with cost overruns, raise questions about the appropriateness of the transfers themselves, as well as the overall reliability of our accounting system and internal controls. As such, all cost transfers involving sponsored projects must be reviewed and approved by Research Accounting within Post Award Financial Operations.
Retroactive payroll adjustments that involve Sponsored Programs are submitted to Research Accounting for approval and processing using a Salary Adjustment Request Form. This form must be attached to salary adjustments in SAP. Salary transfers involving costs originally recorded in Walker (prior to July 1, 2011) must be requested in SAP using FV50 “PARK G/L Account Document: Company Code TRBU”. Salary transfers involving costs originally recorded in SAP must be requested in SAP using the “Personnel Actions” option.
Retroactive non payroll adjustments that involve Sponsored Programs are submitted to Research Accounting for approval and processing using a Non Salary Cost Transfer Request Form. This form must be attached to the general expense (non-salary) transfers that are processed using SAP function FV50 “PARK G/L Account Document: Company Code TRBU”.
- Whether submitting Salary Adjustment Request Forms or Non Salary Cost Transfer Request Forms, the following principles must be followed:
- Complete the forms accurately and in their entirety
- Include all necessary supporting documentation
- The date of the original charge must fall within the effective dates / period of
performance of the sponsored project.
- Requests for transfers in excess of 90 days from the original transaction date require additional documentation and approval as noted below.
All cost transfers must be properly documented on the appropriate form and must include the following information:
- ➢ If within 90 days of the original transaction date:
- Justification supporting the necessity of the transfer.
- A detailed explanation of what caused the error and how it was discovered. An explanation that states to “correct a clerical error” or “transfer to correct grant or contract” is not sufficient.
- ➢ If in excess of 90 days of the original transaction date: In addition to the information listed above, the following is necessary:
- The reason for the delay in processing the adjustment
- Identification of the controls that will be implemented or what action has been taken to ensure the error does not occur again.
- Signature of Principal Investigator. In the instances where signatures are not available, emails evidencing the PIs approval are adequate.
- Additional Requirements for Salary Adjustments:
- Exclude the fringe calculation in the adjustment amount
- For CRC faculty on accrual, adjustments must include all original salary and accrual charges
- Consideration of effort certification. Please see section B below.
- Additional Requirements for Non Salary Cost Transfers:
- Identification of a cost transfer entry using SAP is made by selection the “ZK” as the document type in SAP. If cost transfer entries are not properly coded, the originator will be asked to recode. This is necessary because the individual creating an online entry is the only one authorized to make any changes to the entry.
- The date of the original charge and the transaction ID must be recorded in the Text field on the SAP FV50 screen or on the Non Salary Cost Transfer Request Form.
- For entries containing equipment sponsored classes, the property tag number (or requisition number if a property number has not been assigned) should be included in the explanation supporting the entry.
- In the case of a travel transfer, the effective date of the original charge, reference number, and traveler’s name should be entered. The explanation must include the business purpose, location, dates of travel, and the reason for the transfer.
All Salary Adjust Request Forms and Non Salary Cost Transfer Request Forms are reviewed along with all supporting documentation and may be rejected or approved by Research Accounting on an exception basis. A common exception involves the set up of a sponsored program source with an award date occurring in the past, also known as a “late award”. When appropriate, the department is encouraged to request a pre-award account to ensure charging is allocated to the appropriate funding source.
Cost transfers made simply to “spend down” a sponsored project with available funding or to meet deficiencies caused by overruns or other fund considerations will not be approved. Transfers from sponsored program sources to unrestricted accounts (e.g.: departmental budgets) will always be allowed and should be completed in a timely manner to ensure accurate reporting to sponsors.
Requests not approved by Research Accounting will be returned to the individual who initiated the cost transfer.
B. Effort Certification
Salary payments from sponsored projects require certification of Personnel Activity Reports (PARs) that the salaries and wages charged to sponsored projects are consistent, fair, and timely with the effort contributed. In accordance with federal regulations, the PAR must be updated to reflect the accurate salary distribution corresponding to the expended effort. If the percentages on the PAR do not reflect the true level of effort, a salary adjustment must be performed.
- If the salary adjustment being requested affects an original transaction date for which a PAR has been printed and distributed, the employee’s PAR must be corrected to reflect the accurate salary distribution corresponding to the effort expended and it must be submitted with the Salary Adjustment Request form.
- If the PAR has already been certified and submitted to Post Award Financial Operations (PAFO), provide a copy of the certified PAR with your Salary Adjustment Request form. Per BU’s Effort Certification Policy, the salary adjustment must be reviewed and approved by the Assistant Vice President for Post Award Financial Operations. If approved, a revised and re‐certified PAR will be required. PAFO’s Effort Reporting Analyst will request the completion of the revised PAR from the contact person designated on the applicable Salary Adjustment Request form. Note that a salary reallocation that benefits the sponsor will always be approved.
The University will not accept salary adjustments that will increase the level of effort on a sponsored project beyond the level certified on the personnel activity report.
Please address salary adjustment and non salary cost transfer inquiries to your assigned Research Administrator at 617-353-4555. Please address effort reporting inquiries to PAFO’s Effort Reporting Analysts at 617-353-0883.
For additional guidance please see the Cost Transfer Checklist.