This policy establishes requirements for processing transfers of direct costs to or
from sponsored accounts. Federal regulations, generally accepted accounting principles,
and good management practices require that all costs incurred be appropriate to and
for the direct benefit of the project charged, and that accounting records be maintained
on a timely and accurate basis. Audit reports routinely question or disallow cost
transfers, in particular those that are frequent, tardy, unexplained or inadequately
A Cost Transfer occurs when an expenditure charged to one account is moved to another
account, after the fact.
Although it is preferable to charge costs to the correct account when they are incurred,
cost transfers may occasionally be necessary. These transfers must be properly documented
and processed within a reasonable time (normally within 60 days of the original entry).
The costs being transferred must be allowable and allocable to the receiving account.
- 1.4.2 The transfer must be supported by documentation that clearly explains why the
transfer is being made. The explanation must be sufficient for a reviewer to understand
the transfer and conclude that it is appropriate. A statement that merely says "to
correct error" or "to transfer to correct account" is not sufficient. The transfer
should also have attached the documentation for the original charge that is being
- 1.4.3 Transfer should be submitted as soon as possible after the error is discovered,
and must normally be processed within 60 days of the original entry.
- 1.4.4 Under no circumstances may expenditures be placed on a sponsored account for
reasons of convenience or funding availability with the intention that they will be
moved at a later date.
- 1.4.5 If a cost transfer affects two departments, both departments must approve the
- 1.4.6 Costs will not normally be transferred more than once. Since the transfer has
already been justified, documented and accepted as appropriate, any additional transfer
would be highly suspect.
- 1.4.7 Cost transfers which will affect Resident Instruction accounts must be submitted
to sponsored accounting prior to June 1 of the fiscal year effected by the transfer.
- 1.4.8 If the costs being transferred are for salaries, documentation showing the salary
and fringes for the individual must be attached. Transfers for salary expense of individuals
working on sponsored accounts must be made prior to, or at the time, the Quarterly
Personnel Review sheet is submitted. No transfers of salary may be made after the
Quarterly Personnel Review sheet for that period has been submitted.
Cost Transfer Entry For Sponsored Accounts form must be completely filled out for transfers of non-personnel expenditures and the
Cost Transfer Entry Payroll form filled out for transfers of personnel services expenditures.
These forms should be filled out completely including proper explanation justifying
transfer and certification by PI.