Post Award

Cost Transfers

Although every effort should be made to avoid the need for cost transfers, there are times when a cost transfer is necessary. A cost transfer is defined as “moving a posted expense from one account to another.” To determine whether to submit a cost transfer request, answer the following question:  Has an expense hit an account (including a default account)? If the answer is “no,” there is no need to submit a cost transfer request.

To avoid the need for cost transfers, set up accounts early, following Guarantee Account procedures, and make sure any potential expense is allowable by:

    • Reviewing agency guidelines concerning the account.
    • Reviewing the allowability information on the PAF Team website. 
    • Calling the PAF Team for assistance.

POLICY OVERVIEW

It University policy (HOOP 96) to assure all expenditures are accurately reflected in the accounting records. To accomplish this, cost transfers may be necessary to move expenses to or from any account.

Sponsored Project Accounts and All Other Accounts

Sponsored Project Accounts are those accounts involving sponsored projects, and include grants, contracts, gifts, and endowments. 

All Other Accounts are all accounts other than those defined as Sponsored Project Accounts (e.g., state accounts, designated accounts, service department accounts, etc.).

For the purposes of applying this cost transfer policy, any Sponsored Project Account that does not require external financial reporting will be treated as an All Other Account. Confirmation of external financial reporting requirements is the responsibility of the PAF team.

Established Timeframes

Cost transfers are not allowed to cross fiscal years. This includes processing after fiscal year end.

Cost transfers for Sponsored Project Accounts will only be processed within sixty (60) calendar days from the end of the month when the expense was incurred, unless the cost transfer request is to move the expense from a Sponsored Project Account to an All Other Account.

Any other cost transfer request should be submitted and processed as soon as possible after the need has been identified.

 

Allowability

Cost transfers affecting Sponsored Project Accounts are subject to the following allowability criteria:

  • Complies with the terms and conditions of sponsored research.
  • Supported by accurate Effort Reports in compliance with the Effort Report Policy, when applicable. 
  • Complies with financial reporting requirements (e.g., billings and Financial Status Reports).

 

Accountability

Department personnel and leadership are ultimately responsible for ensuring all cost transfers comply with this policy.

PROCEDURES

Once departments have identified the need for a cost transfer, the procedures below must be followed.

 

Sponsored Project Accounts

For payroll-related cost transfers affecting Sponsored Project Accounts, departments must comply with the Retro PA policy and submit a PA request to the SDR team. In addition, departments must also submit a cost transfer request to PAF.

For non-payroll-related cost transfers affecting Sponsored Project Accounts, departments must submit a cost transfer request to PAF.

A cost transfer request must include the following:

  • Accounts involved.
  • A full audit-supportable justification of how the error occurred. An explanation that states that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient. An additional two or three sentences are needed to define the circumstances that necessitated the cost transfer request. 
  • Must be approved by the PI and department business officer of the appropriate operating unit.
  • If the cost transfer is related to payroll, the cost transfer must then comply with the Effort Report policy.
  • If the cost transfer is not related to payroll, evidence must be provided that the expenditure has occurred (e.g., expense detail from the accounting system).


The PAF team will review those cost transfers requests effecting Sponsored Project Accounts to:

  • Determine with the department if the cost transfer request is the best option.
  • Determine if the cost transfer request is allowable within the rules and institutional policy governing the accounts.
  • Ensure that the cost transfer request is supported by appropriate audit-supportable justification documentation.

The PAF team will review cost transfer requests and recommend approval or disapproval.

 

All Other Accounts

For payroll-related cost transfers affecting All Other Accounts, departments must comply with the Retro PA policy and submit a PA request to the SDR team.

For non-payroll-related cost transfers affecting All Other Accounts, departments must submit the following information to General Accounting:

  • Accounts affected by cost transfer.
  • Amount to be transferred.
  • Date of expense.
  • Expense detail from the accounting system.