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Office of Research and Innovation
Research Administration and Compliance

Cost Transfers

A cost transfer is an expense that is transferred from one account to another after the expense was initially recorded in the financial accounting (FIN) system. When cost transfers to move expenses involve sponsored projects, it is critical that the transfer meets the rules for allowability, allocability, reasonableness and consistency.

Guidelines

Cost transfers by recipients, consortium participants or contractors under grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the recipient, consortium participant, or contractor. An explanation merely stating that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. Transfer of costs related to payroll (i.e., earnings, benefits and taxes), referred to as payroll redistributions, are processed via the Distribution Setup component of the HR System in MyPack Portal. Transfer of nonpayroll-related costs (e.g., student aid or graduate student health insurance), referred to as journal vouchers, are processed as Financial (FIN) System transactions.

Types of Cost Transfers

Principal Investigator/Employee Responsibilities

  • Communicating salary distribution information to department/college personnel so appropriate payroll distribution actions can be entered in a timely manner.
  • Communicating salary distribution changes to department/college personnel as soon as they are known so appropriate distribution adjustments can be entered in within 90 days.
  • Ensuring appropriateness and accuracy of all salary charged to their sponsored projects.

College/Department Responsibilities

  • Creating and maintaining documented policies and procedures for processing payroll actions, including salary distributions and redistributions.
  • Establishing personnel actions for employees paid monthly, graduate-student employees, and temporary employees in the university payroll system on a timely basis to ensure accurate payroll charges to sponsored projects.
  • Coordinating retroactive payroll adjustments (i.e., redistributions) affecting sponsored projects or other pay sources to ensure that all adjustments to payroll charges are completed within the 90-day period allowed for cost transfers.
  • During the monthly project reconciliation process, reviewing salary distributions for appropriateness and accuracy of actual work activities and making any necessary adjustments.
  • Completing the out-of-compliance justification form for all redistributions affecting sponsored projects not processed within the 90-day period allowed for changes. The form and a copy of all monthly project reconciliations for the projects included in the redistribution must be submitted to Contracts and Grants for approval.
  • Attaching and submitting the completed redistribution package to Contracts and Grants for approval via the Electronic Retroactive Adjustment Form (E-RAF).

Office of Contracts and Grants Responsibilities

  • Establishing internal and campus procedures for payroll redistributions that are consistent with the requirements of OMB Uniform Guidance (UG).
  • Monitoring college responsibilities related to payroll redistributions in order to ensure university compliance.
  • Reviewing and approving out-of-compliance justification forms submitted for payroll redistributions not processed within the 90-day period allowed for cost transfers.
  • Providing assistance to college/departmental payroll coordinators.
  • Ensuring that the payroll redistribution system is functioning in accordance with established university policies and procedures.

Principal Investigator/Employee Responsibilities

  • Communicating direct charge allocation information to department/college personnel so appropriate Accounts Payable (AP) Vouchers can be entered in a timely manner.
  • Communicating information related to necessary cost transfers to department/college personnel so that required journal entries can be entered in a timely manner (within 90 days).
  • Ensuring appropriateness and accuracy of all direct charges to sponsored projects.

College/Department Responsibilities

  • Creating and maintaining documented policies and procedures for processing journal entries.
  • Coordinating journal entries affecting sponsored projects or other pay sources to ensure that all adjustments to direct charges are completed within the 90-day period allowed for cost transfers.
  • During the monthly project reconciliation process, reviewing journal entry actions for appropriateness and accuracy.
  • Maintaining justification documentation for all journal entries affecting sponsored projects not processed within the 90-day period allowed for cost transfers.

Office of Contracts and Grants Responsibilities

  • Establishing internal and campus procedures related to journal entries affecting sponsored projects which are consistent with the requirements of OMB Uniform Guidance (UG).
  • Monitoring college responsibilities related to journal entries in order to ensure university compliance.
  • Reviewing and approving journal entries which include expenditures related to payroll, graduate student health insurance (GSHI) and student aid.
  • Providing assistance to college/departmental administrators.