Cost Transfers for Sponsored Projects

Date: April 2017     Revision: 4

A cost transfer is an accounting entry that moves an expense from one account to another. Expenses to sponsored project accounts must be allowable, allocable and provide a direct benefit to the project receiving the expense. 

Types of Cost Transfers

Examples of Cost Transfers

  • Journal Vouchers (JV) - for all non-salary expenditures
  • Payroll Journal Vouchers (PR-45) - for all salary expenditures

Examples that are Not Cost Transfers

  • Charges form a service center to an operating fund (this is a billing for service)
  • Charges processed through a clearing fund such as telephone services, copy services, etc.

When Cost Transfers May or May Not Be Appropriate

Cost Transfers that May Be Appropriate

  1. Correction of technical errors, such as a data entry or transposition error.
  2. Transfer of pre-award costs from a memo account. Use of another sponsored account is strictly prohibited and will result in all pre-award costs being moved permanently to a non-sponsored account. 
  3. Transfers between projects when the work is closely related and the cost is a proper charge to either project. 
  4. Transfers to move unallowable charges to a non-sponsored project account. 

Cost Transfers that are Not Appropriate

  1. Transfers processed solely to move deficit spending from one sponsored project to another unrelated sponsored project.
  2. Transfers that are processed solely to use up an unexpended balance.  
  3. Transfers of expenses that were not incurred during the project period performance, unless specifically allowed in writing by the sponsor. 

Required Documentation

A request to transfer an expense to a sponsored project account should be made in a timely manner. This means that the cost transfer request, whether on a JV or PR-45, should be made:

  • Within 90 days of the posting of the expense.
  • Before the last 45 days of the project or account end date.
  • Prior to effort certification.

A cost transfer request must include an explanation. The explanation must be clearly stated and must be sufficient for an independent reviewer to understand the transfer and conclude that it is appropriate. An explanation that merely states that the transfer is being requested "to correct an error" or "to transfer to correct project" is not sufficient. 

Late Transfers

A cost transfer request is considered "late" if it meets any of the following criteria:

  • The transfer request is made 90 days or more after the posting of the expense. 
  • The transfer request is made within 45 days of the account end date.
  • The transfer request is made after the end date of the award.
  • The transfer request is made after effort certification. 

In addition to the explanation on the JV or PR-45, a late cost transfer request to move an expense to a sponsored project account must include additional justification on a Cost Transfer Justification form (SP-6). Late cost transfer justifications must address the following: 

  • Why the expense was originally charged to the account from which it is being transferred.
  • An action plan to avoid similar late cost transfers in the future. 
  • The Cost Transfer Justification form (SP-6) must be signed by the PI, chair/director, and dean/VP before being submitted to Sponsored Projects.
  • The cost transfer request and the Cost Transfer Justification form (SP-6) should be submitted together. 

Reviewing Authority for Cost Transfers

Review of the transfer and supporting justification is completed by a post-award grant accountant in Sponsored Projects. Additional review is conducted by the research compliance program manager in Sponsored Projects when required. 
Sponsored Projects is authorized to reject cost transfers on sponsored project accounts that do not meet the criteria contained in this policy or would be questionable under federal or other regulations and statutes or by the terms and conditions of a sponsor award.