[ Financial Policy Manual ]
2113 Cost Transfers and Payroll Reallocations
Effective: Dec. 1986
Revised: March 2006
Reviewed: May 2008
Responsible Office: Research Services
Approval: Research Services
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Purpose
To ensure the allowability and timeliness of transfers of incurred costs, both payroll and
other direct costs, to sponsored projects.
Definition
A cost transfer is defined as the moving of an expense to a sponsored project (including but not limited to clinical trials, training grants, research grants/contracts/cooperative agreements as identified in Sponsored Projects Policy No 2101) when the expense was initially charged to another project or non-sponsored project account. Cost transfers, or moving an expense, include salary charges transferred through payroll reallocations as well as other direct costs. Cost transfers include transfers that occur during the life of the award and after the award has ended. A pattern of cost transfers from or to a sponsored project may indicate poor awards management.
Policy
- The principal investigator is responsible for ensuring that transfers of costs to sponsored projects, which represent corrections of errors, are made promptly. Transfers must be supported by documentation which contains a full explanation of how the error occurred and a correlation of the charge to the project to which the transfer is being made. Explanations such as “to correct an error” or “to transfer to correct project” are unacceptable.
- Prudence dictates that care must be exercised in making any cost transfer, especially transfers made after termination date of a project and/or the reporting period of a project (i.e., annual financial reports). Transfers of costs to any sponsored project account are allowable only where there is direct benefit to the project account being charged. The transfer of an overdraft or any direct cost item incurred in the conduct of one sponsored project may not be transferred to another sponsored project account merely for the sake of resolving a deficit or an allowability issue.
- Cost transfers must be prepared and submitted within 90 days from month end in which the transaction appears on the fund. Cost transfers made after this period require ORS approval and will only be allowed under extenuating circumstances.
- Cost transfers may be made, provided the following conditions are met:
- The cost is a proper and allowable charge to the project;
- The transfer is supported by adequate documentation fully explaining the circumstances under which the error occurred and certified by the principal investigator and business administrator, as described in 1. above; and
- Transfers which are not made promptly, due to extenuating circumstances, must include an adequate explanation why there was a delay in correcting the error.
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