Research, Sponsored Program, Technology Transfer and Intellectual Property

Sponsored Projects Cost Transfer Policy

Section: Research, Sponsored Program, Technology Transfer and Intellectual Property Policies
Policy Name: Sponsored Projects Cost Transfer Policy
Policy Owner: Vice President for Research, Scholarship & Innovation
Responsible University Office: Research Office
Origination Date: July 8, 2009
Revisions: July 21, 2015; August 2020
Legacy Policy Number: 6-18
  1. SCOPE OF POLICYThis policy outlines requirements for Cost Transfers to or from an externally-sponsored project.
    1.  “Cost Transfer” – means the reallocation of a cost to or from a sponsored project which must meet the Cost Principles under federal guidelines.
    2. “Untimely Cost Transfer” – means a Cost Transfer that is submitted more than 90 days after the original transaction date.
    3. “Cost Principles” – means the fundamental conditions for ensuring costs are permissible on a sponsored project, including:
      1. Allowability or Allowable – Costs must be permissible under the terms and conditions of the award, including the authorized budget and applicable regulations.
      2. Allocability or Allocable – Costs must provide a sole benefit to the sponsored project or provide proportionately assignable benefits to the sponsored project.
      3. Reasonableness or Reasonable – Both the nature of the goods or services acquired and the amount paid must reflect the action that a prudent person would have taken at the time the decision to incur the cost was made.
      4. Consistency – Application of costs must be given consistent treatment within established University policies and procedures; costs for the same purpose must be treated and classified the same way under like circumstances.
    4. “Principal Investigator” or “PI” – means the individual designated in a grant or contract to be responsible for ensuring compliance with the academic, scientific, technical, financial, and administrative aspects and for day-to-day management of the sponsored project (grant or contract).
    5. Sponsored Projects – means the externally-funded activities in which a formal written agreement (i.e., a grant, contract, or cooperative agreement) is entered between the University and the sponsor.
  3. POLICY STATEMENTThe purpose of this policy is to ensure University compliance with applicable Federal regulations and Cost Principles set forth under Office of Management and Budget (OMB) Circular A-21 and Uniform Guidance 2 CFR 200. Key guidelines under this policy include:
    1. Cost transfers must meet conditions for allocability, allowability, reasonableness and consistency established under Federal guidelines.
    2. It is the primary responsibility of a PI, with support of the department research administrator and the department chair, to determine if all cost transfers are allowable, allocable, reasonable, and applied consistently.
    3. Cost transfers should be submitted within 90 days from the date the transaction is originally charged to the sponsored project and must be fully documented and have appropriate authorization.
    1. Allowability Considerations
      1. The University recognizes that Cost Transfers are sometimes necessary to correct bookkeeping or clerical errors in the original charges and to allocate closely related work that may support more than one project.
      2. Cost Transfers must meet conditions for allocability, allowability, reasonableness, and consistency established under federal guidelines.
      3. It is the primary responsibility of a PI, with support of the department research administrator and the department chair, to determine if all Cost Transfers are allowable, allocable, reasonable, and applied consistently.
      4. Under no circumstances may costs that benefit one sponsored project be charged temporarily on another sponsored project. Failure to adhere to this procedure will result in improper financial reporting and inappropriate reimbursement from the sponsor.
      5. Frequent, late, and inadequately explained Cost Transfers, especially those involving projects with cost overruns or unexpended balances, raise serious questions about the propriety of Cost Transfers and call internal fiduciary controls into question. This may result in audit disallowances and monetary paybacks including penalties and fines.
      6. The table below provides common examples for determining whether a Cost Transfer is generally allowable, questionable, or unallowable:
        Generally Allowable Questionable Generally Unallowable

        ·       Correcting clerical errors or mistyped entries

        ·       Transferring approved pre-award costs from non-sponsored funds to sponsored projects

        ·       Reallocating costs originally charged to a central administrative location, or when multiple projects benefit

        ·       Reallocating salary expenses to match effort distributions

        ·       Transferring between the primary project and subprojects, unless otherwise restricted by the terms and conditions of the award

        ·       Transferring when prior written approval has been received from the sponsor

        ·       Reallocating expenses between sponsored projects when one is in overdraft

        ·       Transferring expenses to bring an available balance to zero

        ·       Correcting salary which has previously been certified in an effort report

        ·       Transferring an expense that has previously been transferred on a separate occasion


        ·       Transferring expenses incurred after the sponsored project end date

        ·       Transferring expenses with insufficient supporting information or justification (“to correct error” or “to transfer to correct project” are not considered sufficient reasons for transfers)

        ·       Transferring split expenses without an adequate basis or insufficient documentation for determining whether the split is appropriate due to insufficient documentation

        ·       Transferring expenses between award project periods

        ·       Untimely cost transfers without justification for the delay and an extraordinary situation adequately documented

    2. Timeliness of Cost Transfers
      1. Original charges should be directed to the appropriate benefiting sponsored project. If it is necessary to process a Cost Transfer that involves a sponsored project, a journal voucher should be initiated promptly and contain sufficient documentation and justification to support the Cost Transfer that would stand the test of a formal audit.
      2. The timeliness of a Cost Transfer is determined based upon a 90-day threshold period, calculated from the last day of the month in which the charge first posted in the general ledger.
        1. For example, a charge first posted in the general ledger with a transaction date of May 2nd would begin its 90-day period on May 31st and end its 90-day period on August 28th.
      3. Untimely Cost Transfers occurring after the 90-day threshold period must document answers to a series of questions to justify the appropriateness of the transfer. These questions include:
        1. What is the oldest original transaction date of the expense being transferred?
        2. Why was the original expense not charged appropriately?
        3. How does this expense benefit the receiving sponsored project?
        4. Why is the cost transfer being requested more than 90 days after the original transaction date?
        5. What steps will be taken to prevent this type of error or situation from occurring in the future?
      4. Cost Transfers to remove charges that do not meet the Cost Principles outlined in Uniform Guidance 2 CFR Part §200, Subpart E must be completed regardless of timing.
    3. Supporting Documentation
      1. Cost Transfer documentation must indicate that the PI has approved or directed the transaction.
      2. Adequate documentation related to the Cost Transfer and original expense must be attached to the journal voucher and kept on file within the department until the record retention requirement has been satisfied.
    4. Cost Transfer Approvals and Authorization
      1. All Cost Transfers will be routed electronically to an administrator other than the originator for approval, and the PI will be copied.
      2. Untimely Cost Transfers will be routed electronically for Research Office review and approval.
    5. PI/Department Responsibilities
      1. Review sponsored research projects on a regular basis (at least monthly) to ensure that all expenditures charged are correct and appropriate.
      2. Submit and approve Cost Transfers in compliance with university policy and procedures.
      3. Retain all supporting documentation of the Cost Transfer in accordance with applicable records retention regulations and University policies.
      4. Ensure that all personnel engaged in financial administration of Federally-funded sponsored projects are familiar with the University Cost Transfer policy.
    6. Research Office Responsibilities
      1. Develop and implement Cost Transfer procedures in accordance with the Cost Principles outlined in Uniform Guidance 2 CFR 200, Subpart E.
      2. Assist in the interpretation and implementation of the Cost Transfer Policy.
      3. Provide final approval for Untimely Cost Transfers.
      4. Periodically review Cost Transfers to ensure compliance with University policy and Federal regulations.