Cost Transfers for Sponsored Projects
Policy Date: March 2019 Revision: 5 Last Review: March 2019
A cost transfer is an accounting entry in Workday that transfers an expense from one worktag to another. Expenses transferred to sponsored project worktags must be allowable, reasonable, properly allocated, and provide a direct benefit to the project receiving the expense.
Types of Cost Transfers
- Financial Accounting Adjustment - non-payroll expenditures from supplier invoices, expense reports, and purchasing card expenses.
- Journal Vouchers - all other types of non-payroll expenses or anytime a non-payroll epxense needs to be transferred to more than one worktag.
- Payroll Accounting Adjustment - payroll expenditures such as salaries, wages, and fringe benefits.
Cost Transfers that May Be Allowable
- Correction of technical errors, such as a data entry or transposition error.
- Transfers between projects when the work is closely related and the cost is a proper charge to either project.
- Transfers to move unallowable charges to a non-sponsored project worktag.
- Transfers to assign a cost share worktag to an expense. In this case, the cost transfer does not move the expense from one worktag to another; it assigns a cost share worktag to an expense without moving it. Note: grant-to-grant cost share cannot be accomplished through a cost transfer in Workday.
Cost Transfers that Are Not Allowable
- Transfers processed solely to move deficit spending from one sponsored project to another unrelated sponsored project.
- Transfers that are processed solely to use up an unexpended balance.
- Transfers of expenses incurred before the project start date or after the project end date, unless specifically allowed in writing by the sponsor.
Timeliness of Cost Transfers
Cost transfers should be entered as soon as an error is discovered. For a cost transfer entry to be considered timely, it must meet all of the following conditions:
- Within 90 days of the posting of the expense.
- Before the last 45 days of an account end date.
- Before an award ends.
- Prior to effort certification.
Cost Transfer Justification (SP-6) Form
A Cost Transfer Justification (SP-6) form must be attached to any cost transfer moving an expense to a sponsored project worktag. The SP-6 form should be uploaded as an attachment in Workday. The purpose of the form is to provide documentation fully explaining how the error occurred and a certification of the correctness of the new charge. The documentation must be clear and sufficient for an independent reviewer to understand the transfer and conclude that it is appropriate. A justification that merely states the transfer is being requested "to correct an error" or "to transfer to correct project" is not sufficient. The justification must address all of the following:
- Why the expense was originally charged to the worktag from which it is being transferred.
- How the expense benefits the award to which it is being transferred.
- Action that has been taken to eliminate the need for similar cost transfers in the future.
Cost transfer requests that do not include an SP-6 form will be returned to the department for correction.
An SP-6 form is not required for a Payroll Accounting Adjustment that only assigns a cost share worktag since the expense is not being moved to a sponsored project account.
Signature Requirement for Untimely Cost Transfers
A cost transfer request is considered untimely if it is entered as follows:
- More than 90 day after the original posting of the expense.
- Within 45 days of the end date of the account to which the expense is being transferred.
- After the award has ended.
- After effort certification.
Cost Transfer Justification (SP-6) forms for untimely cost transfers must be signed by the principal investigator and the chair/director before being attached to a cost transfer in Workday. Unsigned forms for untimely cost transfers will be returned to the department for correction.
Reviewing Authority for Cost Transfers Involving Sponsored Projects
Review of cost transfers involving sponsored project worktags 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 involving sponsored project worktags 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.