Policy on Costs Transfers for Sponsored Agreements
Purpose:
To establish guidelines for the charging of costs transfers on sponsored agreements which are consistent with federal, state, city and private grantor regulations. These guidelines comply with the requirements from the Office of Management and Budget Uniform Guidance (UG) as well as requirements from our federal/non-federal sponsors.
Scope:
Faculty and staff who request and authorize cost transfers on sponsored agreements.
Responsibility:
The interpretation and administration of this policy shall be the responsibility of the Grants and Contracts Accounting Office in consultation with the Associate Vice President and Controller.
Policy:
This policy applies to all sponsored agreements at the College. The College recognizes that cost transfers are sometimes necessary to correct bookkeeping or clerical errors and to allocate closely related work that may support more than one project. The explanation for the cost transfer must be allowable, allocable, reasonable, and consistent. Frequent, tardy and unexplained (or inadequately explained) transfers, particularly where they involve indices with significant cost overruns or unexpended balances, raise serious questions about the propriety of the transfers and call the College’s accounting system and internal controls into question. These activities may result in expense disallowance by the grantor and monetary penalties and fines.
Procedure:
Original charges should be directed to the appropriate benefiting sponsored project. If it is necessary to process a cost transfer that involves a sponsored project, a Department Revenue/Expense Transfer Form should be initiated promptly (90 days from the original date of the transaction) and contain sufficient documentation and justification to support the cost transfer that would stand the test of a formal audit. The form and documentation should be routed to the Controller’s Office.
Under no circumstances may costs that benefit one sponsored project be charged temporarily on another sponsored project. Failure to adhere to this procedure will result in improper financial reporting and inappropriate reimbursement from the sponsor.
Cost Transfers within 90 Days
The 90 day rule is calculated from the original date of the transaction first posted in the general ledger. For example: A charge first posted in the general ledger on May 2nd would begin its 90 day period May 2nd and end on August 2.
A Department Revenue/Expense Transfer Form should be submitted and the form explanation should include the following:
The Department /Revenue/Expense Transfer Form should be approved by the Principal Investigator or someone from the department who has first-hand knowledge of the sponsored project. Documentation related to the transfer will be kept by the Grants and Contracts Accounting Office in accordance with record retention requirement.
Cost Transfers after 90 Days
In addition to the procedures for cost transfers within 90 days, originators are required to answer a series of questions when processing a cost transfer for an expense that is over 90 days:
In addition to the approval of the Principal Investigator or someone from the department who has first-hand knowledge of the sponsored project, the cost transfer will require approval
from the Director of Grants and Contracts Accounting. This final approval by the Director will ensure that only appropriate changes are passed through the system.
Examples of circumstances where cost transfers are typically allowable:
Examples of typical circumstances in which cost transfers may not be allowed:
Roles & Responsibilities
It is the role of each Principal Investigator and staff with delegated approval authority to:
It is the role of the Grants and Contracts Accounting Office to:
Definitions
Original Charge: The first posting of a cost to the general ledger.
Cost Transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project within a 90-calendar day period from the original accounting date.
Late Cost Transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project more than 90 calendar days from the original accounting date.
Allowable: A cost must be charged to an index in accordance with the terms and conditions of the award as well as College policy.
Allocable: A cost must support meeting a specific project objective.
Reasonable: The nature of the goods or services acquired and amount paid reflect the action that a prudent person would have taken at the time the decision to incur the cost was made.
Consistent: Application of the cost is given consistent treatment within established College policies and procedures; costs for the same purpose are treated and classified the same way under like circumstances.
Responsible Office: Controller
Effective Date: October 2016
Last Updated: October 2016