Cost transfers refer to moving expenses (payroll or other costs) from one University funding source to a sponsored award or from one grant/contract chartstring to another. These transfers should be rare and only done to correct errors. Expenses should always be charged to the correct project at the time they are incurred.
When Cost Transfers Are Allowed
Cost transfers may be appropriate when:
- An expense was incorrectly charged to a non-sponsored or incorrect sponsored award.
- Documentation exists to justify the correction.
- The transfer can be completed in a timely manner with proper explanation and certification.
Documentation Requirements
All cost transfers must include:
- Reason for the transfer: Explain why the original charge was incorrect.
- Certification: Confirm the cost is now correctly charged to the appropriate award.
- Audit-ready records: Documentation must be sufficient for internal or external audit review.
Tip: Keep detailed notes and supporting documents when performing a cost transfer; this helps demonstrate compliance with sponsor and University policies.
Preventing Cost Transfers
- Use temporary projects for new awards: Before receiving an award document, request a temporary project so personnel and operating expenses can be charged correctly from the start.
- Charge expenses correctly initially: Proper coding and approval processes minimize the need for transfers.
Federal Guidelines
- NIH Grants Policy: Provides guidance on cost transfers for federal grants.
- Cost transfers that correct clerical or bookkeeping errors should generally be made within 90 days of identifying the error.
- These principles may be applied broadly to other federal awards as a best practice.