Cost Transfer Form (.xls Spreadsheet)
This policy establishes requirements for processing cost transfers of direct costs to/from sponsored program accounts. Federal regulations, generally accepted accounting principles, and good management practices require that all costs incurred be appropriate to and for the direct benefit of the project charged, and that accounting records be maintained in a timely and accurate basis.
A cost transfer is simply moving an item of cost from one account to another. Cost transfers are occasionally necessary and may be required for various reasons.
II. GENERAL INFORMATION:
OMB Circular A-21 http://www.whitehouse.gov/OMB/circulars/a021/a21_2004.html), the federal regulations governing cost principles for federal awards, requires that sponsored program costs must conform to the following criteria. Costs must be:
a. Allowable—this cost is permitted to be charged under the terms and conditions of the sponsored award.
b. Allocable—a cost incurred to benefit a particular project or activity in a proportion that can be determined without undue effort or cost, should be allocated to the project based on the proportional benefit.
c. Reasonable—costs may be considered reasonable if the nature of the goods or services acquired or applied, and the amount involved reflects the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made.
d. Consistent—if an item is charged as a direct cost in one instance, it will be charged similarly in a different instance.
e. Costs 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.
It is the responsibility of the Principal Investigator to ensure that only allowable, allocable, reasonable and consistent costs are expensed against a sponsored project account.
a. Cost transfers described as bookkeeping or clerical errors must occur within thirty (30) days of the occurrence.
b. Cost transfers necessary to correct other types of errors should occur within sixty (60) days of the discovery of the need for a cost transfer—and in all cases must be within the sponsoring agency’s guidelines.
c. Exceptions to the above circumstances require full documentation plus a justification detailing the reason for the delay in the transfer.
All requests for a cost transfer must be supported by the following documentation:
a. A full explanation which must contain pertinent information regarding: WHAT the item is; WHEN the item was expensed on the project; WHERE—(what project accounts) the item is to be transferred to and from; a technical justification that addresses HOW the item is used or pertains to the project receiving the expense.
b. Account numbers to be used in the transfer, a dollar amount to be transferred, and copies of the ledger (GLBS) that specifically shows the item in question and the amount charged.
c. Certification by the Principal Investigator of the appropriateness of the new charge.
d. If this is a salary expense that is being moved, a revised Time & Effort form, with the change approved by the Principal Investigator, and a justification for the cost transfer in the comment box on the form. The Time & Effort form may be used in place of the cost transfer form.
Please use the Cost Transfer Form available on the ORSP website.