Cost Transfers

Revision Date: September, 2019

Responsible Office: URA

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The purpose of this policy is to establish responsibilities for cost transfers involving sponsored awards and ensure compliance with federal regulations and other regulatory policies.

Applicability

This policy applies to all individuals, schools, departments, centers, institutes, and programs ("Departments") that manage sponsored awards

Policy Statement

Cost transfers must comply with sponsor terms and conditions, regulations, and University policies. While every effort should be made to ensure that costs are allocated appropriately in initial transactions, there will be instances when a cost needs to be transferred to a different account.

1. Departments are responsible for ensuring that the cost transferred is of direct benefit to the project, aligns with the terms and conditions of the award, and that it meets the Uniform Guidance requirements, as applicable. Inappropriate transfers will result in expenditures being disallowed.
2. Each financial transaction allocated (charged) entirely or partially to a sponsored award must be evaluated against three concepts:
   1. Reasonableness – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.
   2. Allocability – A cost is allocable to a particular award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.
   3. Consistency – Costs must be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the University.
3. Cost transfers are questionable transactions requiring a greater level of explanation in the supporting documentation. The need for a cost transfer indicates that something went wrong with our internal controls, allowing the original charge to be made to an incorrect account.
4. Departments initiating cost transfers are responsible for providing appropriate support information and maintaining documentation that fully describes the following:
   1. Description of the expense being transferred
   2. Original date of the incurred expense
   3. Explanation of why the charge was originally made to the incorrect account
   4. Explanation of why the charge is allocable to the new account
5. URA is responsible for the review and approval of all cost transfers debiting a sponsored award account.
6. Cost transfers may not be allowed for the following without advance approval from the Associate Vice President for Research Administration:
   1. Late cost transfers initiated at least 90 days after the original transaction date.
   2. Once a Federal Financial Report or Report of Expenditures has been issued to the sponsor.
   3. The accounting unit has been closed.

Revision History

Originally Issued: March 1994
Revised: March 1998, August 2007, February 2010, August 2011, January 2015, September 2019

Key Definitions

 Roles and Responsibilities

Related Information

For the purposes of this policy, please note a general reference to “federal regulations” is being used, in lieu of specific references to 2 CFR Part 200 (Uniform Guidance). Please read the Notice of Award and the agency's terms and conditions regarding the applicability of these federal regulations.

Key Contacts