Cost Transfer Policy Project Management

Page Updated: December 1st, 2016

It is critical that all sponsored project expenditures be reviewed on a regular basis to ensure that both salary and non-salary charges are correct and appropriate. It is the responsibility of the principal investigator, and/or the PI’s designee, to authorize transactions and review the expenditure activity. This review should include the determination that the charges are reasonable, allowable, allocable, and directly support the scope of work for that project.

Appropriateness

Typically, cost transfers are appropriate when they involve allowable direct costs of the sponsored project and the purpose is to:

  • Correct errors in processing the original charge
  • Move costs between projects for closely related work (as defined by the project scope) that is supported by more than one funding source
  • Transfer pre-award costs in accordance with the provisions of 2 CFR 200, Subpart D §200.308(d)(1) or OMB Circular A-110, Section C.25.e.1

Lack of Appropriateness

Inappropriate circumstances for cost transfers include, but are not limited to, the following:

  • When the transfer is largely for the purpose of utilizing unexpended funds on a sponsored project
  • When the transfer is for the purpose of avoiding or clearing a cost overrun by charging another, unrelated sponsored project
  • When the transfer circumvents award terms and conditions or the cost principles

Frequent, late, and inadequately explained or documented transfers raise serious questions about the appropriateness of the cost transfers and may result in audit disallowances.