Establish procedures and controls for processing cost transfers.
A cost transfer is an after-the-fact reallocation of costs, either labor or non-labor, to a sponsored award, grant or contract. Cost transfers move expenses previously recorded in a project account to another sponsored project account. Sponsor requirements concerning the management of awards limit the circumstances under which cost transfers are allowed.
Cost transfers should occur in a timely manner and be documented with proper supporting justification. Award/grant/contract requirements for cost transfers require that they are reasonable, allocable, and allowable and that project accounts have adequate controls so that transfers can be monitored.
OMB Uniform Guidance
A cost is allocable to a particular cost objective (i.e., a specific function, project, sponsored agreement, department, or the like) if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a sponsored agreement if (1) it is incurred solely to advance the work under the sponsored agreement; (2) it benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods.
Any costs allocable to a particular sponsored agreement under the standards provided in this Circular may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience.
NIH Grants Policy Statement (October 2013) Part II, Subpart A, 7.5:
Cost Transfers, Overruns, and Accelerated and Delayed Expenditures
Cost transfers should be processed 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 grantee, 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.
Grantees must maintain documentation of cost transfers, pursuant to 45 CFR Part 74.53 or 92.42, and must make it available for audit or other review. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both.
In determining the allowability of cost transfers and the allocability of costs, the factors to be considered will be timeliness in the submission of a request for cost transfer and the justification provided to support the cost transfer. Cost transfers will typically involve correction of clerical errors, correction of allocation of personnel cost (employee time and effort), correction of allocation of the cost of goods or services, or to transfer pre-award costs.
All cost transfers shall be thoroughly explained, properly documented and justified. The principal investigator will be responsible for providing documentation and justification. Any requests for costs transfers that lack proper justification or any request for costs transfers not approved by RFCUNY will be returned to the principal investigator (or if necessary, absorbed by the college's Recovery account or the Research Foundation's disallowance account). Questions regarding the cost transfer process should be directed to the RFCUNY project administrator.
No Cost Transfer shall be approved unless it is:
Cost Transfers may be made:
No Cost Transfers will be made:
If the cost transfer is made (transacted) within 90 calendar days that in which the original charge was recorded:
If more than 90 calendar days have passed following when the charge to be transferred was originally recorded in the General Ledger, an explanation for the lateness of the cost transfer is required along with description of the corrective action taken to eliminate such cost transfers. Cost Transfers after the 90-day period will need the additional approval of the Grants and Contracts Assistant Director.
Any supporting documentation justifying the lateness of the cost transfer should be attached to the journal entry.
If a cost transfer is required to correct a previously processed cost transfer journal, the date the transaction originally posted to the General Ledger should be used for timing purposes (not the date of the previous cost transfer).
Any transfer made after this period raises serious questions regarding the propriety of the transfer. Approval for cost transfers submitted later than 90 days will only be granted in extenuating circumstances.
If the cost transfer is made (transacted) after 90 calendar days when the original charge was recorded: