9.8 Cost Transfers
A cost transfer is the reassignment of an expense to a sponsored project after the expense was initially charged to another sponsored or non-sponsored project. The University expects that all costs are charged to a sponsored project correctly at the outset. However, the PI/PD and departmental administrator should review sponsored project reports on a monthly basis to identify legitimate errors in a timely manner. When errors are discovered, the University is committed to ensuring that all cost transfers (either in the form of a labor distribution adjustment or non-salary journal entry) are legitimate and are conducted in accordance with sponsor terms and conditions, regulations, and University policy. Frequent, late (greater than 90 days old), or poorly explained transfers raise serious questions about the propriety of the transfers, the accounting system, and internal financial controls. All PI/PDs and their departmental administrators are responsible for ensuring that transfers of costs to sponsored projects represent corrections of errors and are made promptly.
Cost transfers must be supported by documentation that contains a full explanation of how the error occurred and a correlation of the charge to the project to which the transfer is being made. Explanations such as “to correct an error” or “to transfer to correct project” are unacceptable. Transfers of costs to any sponsored project account are allowable only where there is direct benefit to the project account that is being charged. An overdraft or any direct cost item incurred in the conduct of one sponsored project may not be transferred to another sponsored project account merely for the sake of resolving a deficit or an allowability issue. Cost transfers should not be used as a means of managing awards. Cost transfers must be prepared and submitted within 90 days from the date the original charge was posted to the project. Cost transfers made after this period require prior PAFO approval and will only be permitted under extenuating circumstances. Cost transfers to correct an error must be completed regardless of timeframe if the correction benefits the sponsor.
For Additional Information see: Cost Transfers