ROWAN UNIVERSITY POLICY

Title: Cost Transfer Policy
Subject: Research
Policy No: OSP: 2015:

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 01
Applies: University-wide
Issuing Officer: Senior Vice President for Health Sciences
Responsible Officer: Vice President for Research
Adopted:

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Last Revision:
Last Reviewed: 02/13/2015

I. PURPOSE

The purpose of this policy is to establish guidelines for requesting and performing cost transfers in sponsored programs that are funded by Federal and State monies.

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A. 2 CFR 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards2 CFR 200 includes: (1) OMB Circulars A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations," and (2) A-21, "Cost Principles for Educational Institutions" whereas Rutgers specifies OMB circ A-100 and A-21.

B. State of New Jersey Circular 07-05-OMB: Grant Agreements – Agency ContractsAdded since state grants are mentioned by no State reference given.

 C. Rowan University Policies

1. Contracting and Procurement
2. Travel Related
3. Fixed Asset Added to ensure Rowan policies are refernced for guidance.

V. POLICY

A. Principal Investigators are in the best position to determine what research costs are necessary for performance of a sponsored agreement. Consequently, they shall assume primary responsibility for justifying cost transfers to or between their sponsored agreements when such transfers are necessary. The principal investigators must review the fiscal status of their sponsored agreements each month and promptly correct expense transactions that are incorrectly recorded. Ultimately, a principal investigator is responsible for resolving any cost transfer disallowed as a result of an audit.

B. A cost transfer is an expense (both salary and non-salary) that is transferred from one Federal or State grant to an alternate account, and vice versa, after the month the initial expense is recorded in the financial accounting system.

 C. The Federal government has established policies, concerning the assignment of costs to federally sponsored agreements, in 2 CFR 200 and specific agency policies on cost transfers. These policies require that universities establish internal controls to ensure that costs associated with a particular sponsored agreement are allowable, reasonable, allocable, and timely.

D. Cost transfers should be made within three months following the month in which the costs were originally recorded in the financial accounting system. The cost transfer must be supported by a statement justifying the reason for the transfer and how it relates to the project, explanation that clearly explains how the error(s) occurred, copies of the expense documentation (invoices, travel expense report, etc.) being transferred, a statement that defines the measures taken to prevent a re-occurrence of the error and certification of the correctness of the new charge by a responsible official of the grant account.

1.  An explanation merely stating that the transfer was made to "correct error" or "to transfer to correct project" is not sufficient.
2. A cost transfers from one budget period to the next solely to cover cost overruns is not allowable.
3. Examples of acceptable explanations include the following:
   1. Payroll forms were not processed timely because the financial plan for the award was being revised.
   2. Individual transferred from one project to another, but the appropriate paperwork could not be processed before the payroll deadlines.
   3. Individual was transferred from one project to another for only one pay period.
   4. Charges had to be placed against an alternate account because an authorized signer for the award was unavailable.
   5. Data entry error occurred when entering the index number on the original transaction.
   6. The individual that prepared the original transaction misunderstood the principal investigator's instructions.
   7. The principal investigator mistakenly gave the wrong information to the individual that processed the original transaction.

E. Grantees must maintain copies of the approved cost transfers as well as the supporting documentation that must be made available for audit or other review. Frequent errors in recording costs may indicate the need for additional training and/or enhanced communication among the principal investigator, Accounting Services department, and Payroll Services department to ensure compliance with all appropriate university payroll, reimbursement, accounting, and personnel policies and practices.

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1. The University's payroll system distributes an employee's salary charges to the sponsored project and other University accounts based upon paperwork submitted for the employee. The distribution accounts entered on those forms are based upon the employee's projected work activities. In some cases, the work plan changes are not known in time for payroll forms to be revised and submitted prior to an upcoming payroll. In those cases, the payroll system will distribute the salary expense to an incorrect account therefore a salary cost transfer is needed to correct the error.
2. A salary cost transfer must be requested by completing a Cost Transfer Form; SOM employees should also submit a Change in Source of Funding Form. The transfer must be made within 3 months following the month in which the expense was originally recorded on the Financial Accounting System.

B. Cost Transfers to Correct Clerical and Bookkeeping Errors

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