Title: Cost Transfer Policy
Subject: Office of Sponsored Programs
Policy No: OSP: 2015: 01
Applies: University-wide
Issuing Officer: Senior Vice President for Health Sciences
Responsible Officer: Vice President for Research
Adopted: 03/13/2015
Last Revision:
Last Reviewed: 03/13/2015
To establish guidelines for requesting and performing cost transfers in sponsored programs that are funded by Federal and State monies.
Under direction of the Senior Vice President for Health Sciences, the Vice President for Research shall provide oversight to the Office of Sponsored Programs to ensure compliance with this policy.
This policy applies to all faculty, employees and students of the University and grants and sponsored projects whose purpose of the project(s) is research.
A. Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200 (2 CFR 200) - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
B. State of New Jersey Circular 07-05-OMB: Grant Agreements – Agency Contracts
C. Rowan University Policies
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 at least monthly and promptly correct expense transactions that are incorrectly recorded. Ultimately, a principal investigator is responsible for resolving any disallowed cost transfer, which may result in the reimbursement of disallowed costs.
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 reoccurrence of the error and certification of the correctness of the new charge by a responsible official of the grant account.
E. Cost transfers will not be charged back to a previous fiscal year in Banner once the University has provided its initial Financial Statement drafts to the auditors during the beginning of the annual year-end audit test work period. Only entries approved by the Accounting Services department and reviewed by the auditors can be processed once a draft is submitted.
F. Grantees and administrative offices of the incorrectly charged account 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.
A. Attachment 1, Sponsored Project Cost Transfers
To ensure that sponsored project cost transfers comply with federal regulations, the Office of Sponsored Programs has established the criteria that a cost transfer must meet based on 2 CFR 200. Below is a description of each cost transfer grouping and the cost transfer criteria that apply to each group:
A. Cost Transfers to correct salary distribution
B. Cost Transfers to Correct Clerical and Bookkeeping Errors
Cost transfers that are necessary to correct clerical or bookkeeping errors will be allowed up to 3 months following the month in which the cost was originally recorded on the Financial Accounting System. Such transfers, however, must be supported by an explanation that describes how the error occurred.
C. Cost Transfers to Move Expense between Projects that are related
D. Cost Transfers to Appropriately Attribute Discretionary/Departmental Fund Expenses
E. Cost Transfers to Move Pre-Award Costs
There are a number of agencies that permit pre-award spending, which are costs incurred up to 3 months prior to the beginning date of the award. If pre-award spending is allowed, an “advance fund” should be established to record allowable expenses three months prior to the expected sponsored project award date which would eliminate the necessity of generating a cost transfer. Without an “advance fund” pre-award expenses should be transferred within 3 months, from the start date of the sponsored project, to the fund created specifically for that award.
F. Cost Transfer not requiring a Cost Transfer form
There are a number of instances for which a Cost Transfer Form is not needed:
G. If more than three months have passed after the issuance of the University Financial Statements in which the original charge had been made, a cost transfer will only be granted in extenuating circumstances, such as:
H. Cost transfers that would result in the revision of a Final Financial Status Report or final invoice will be reviewed on a case-by-case basis.