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Policy statement and procedures Adopted August 2008
Gallaudet University has established the following policy and procedures for the processing of cost transfers to comply with the requirements of the of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) and federal agency policies and procedures.
A cost transfer (CT) is a journal entry that transfers an expense onto/off a federally-funded sponsored award that was previously recorded elsewhere on Gallaudet's General Ledger (GL) and requires institutional approval before it can be posted to the GL. All errors in the allocation of direct costs to sponsored agreements must be identified, corrected and documented in a timely manner.
Reason for Policy
As a recipient of federal funding, the University is responsible for establishing policies that ensure compliance with the requirements of OMB Uniform Administrative Requirements and the terms and conditions of federal sponsors. This cost transfers policy ensures transfers of expenses to/off sponsored projects conform with federal policies and guidelines.
In accordance with OMB, it is necessary to explain and justify transfers of charges onto federally funded sponsored awards, when the original charge was previously recorded elsewhere on Gallaudet's GL. Timeliness and completeness of the explanation of the transfer are important factors in supporting allowability and allocability in accordance with federal requirements.
The Uniform Guidance states, "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" (Sec. C-4). To meet allowability and allocability requirements of the Uniform Guidance, timely and complete justification is required.
In addition, the National Institutes of Health (NIH) Grants Policy Statement says:
Cost transfers to NIH grants by grantees…should be accomplished within 90 days…. [T]ransfers 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…. 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 the next solely to cover cost overruns are not allowable.
Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42, and must make it available for audit or other review. The grantee should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both.
Roles and Responsibilities
Principal Investigators (PIs) take primary responsibility for ensuring compliance with federal regulations as well as the monitoring of expenditures, timely correction of errors, and proper allocation of expenses.
Departmental and Research Administrators (individuals responsible for account monitoring/management) assist PIs in the timely review and reconciliation of expenditures, prepare cost transfers and maintain adequate documentation of questionable costs, and ensure that all personnel engaged in the financial administration of federally funded sponsored awards are familiar with this policy; ensure that the costs transferred are allocable, allowable, and reasonable, prepare and submit timely approved cost transfer form, and retain copies of all related supporting documentation in accordance with the University record retention regulations; responsible for obtaining “authorized approver ” signature for all expenses under 90 day cost transfer if granted. If a cost transfer is rejected, it is the responsibility of the Departmental and Research Administrator to ensure that the cost is removed and assigned to a non-sponsored account in a timely manner.
Authorized approver(s) have the authority to sign under 90 day cost transfers. These individuals are the PI and Co-PI. In the absence of a PI authorized approver, this responsibility shifts to the PI’s dean/chair.
Post Award officials provide oversight and are responsible for ensuring that PIs, Research and Departmental Administrators abide by this policy and accompanying procedures when processing cost transfers. University Controller is responsible for the approval of all over 90 day cost transfers before submission to Post Awards.
Finance Office (Post Awards) is responsible for maintaining the policy and accompanying procedures, addressing questions regarding the policy, approving over 90 day cost transfers, and approving under 90 day cost transfers.
Individuals preparing cost transfers should first contact their Departmental or Research Administrator with any questions regarding this policy or its application. This will ensure that administrators are aware of cost transfer questions and consistent guidance is provided.
The University will identify and correct errors in allocating direct charges to sponsored agreements in a timely and consistent manner as well as provide proper documentation of these transfers.
To be transferred to a sponsored agreement, a cost must be allowable and directly related to that sponsored agreement. Transfers based on funding considerations (i.e., funds remaining at the close of the agreement) are prohibited. In the event an expense is determined to be unallowable or unallocable to the project, the expense must be transferred to a non-sponsored account immediately.
For further information on determining allowable and unallowable costs, see the Direct/Indirect Charging policy.
The classifications of post-award cost transfers and their procedures are as follows:
Cost Transfer Form Not Required
Cost Transfer Form Required
Requests to process cost transfers over 90 calendar days from the date of the original charge will be approved only in extenuating circumstances. These circumstances do not include administrative oversight, staff shortages, PI unavailable, etc. These transfers will be reviewed and decided on a case by case basis.
For further information on salary cost transfers, see the Effort Certification policy.
Origination date: August 2008 Last amended date: May 2020Next review date:
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