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UT System Grant Policy Library -- Policy INT152
Cost Transfer Policy |
Responsible Officer: Associate Vice Chancellor-Controller and Chief Budget Officer
Sponsoring Office: Office of the Controller
Effective Date: January 1, 2007
Last Reviewed: September 2, 2008
Next Scheduled Review: August 31, 2009
Errors or changes to: policyoffice@utsystem.edu
CONTENTS
Policy Statement
Rationale
Scope
Website Address for This Policy
Related Policies, Requirements, or Standards
Contacts
Definitions
Responsibilities
Procedures
Forms Tools/Online Processes
Appendix
POLICY STATEMENT
This policy provides requirements and guidelines for all cost transfers, including payroll costs, for all sponsored programs, federal, state, and private, at UT System Administration.
RATIONALE
The cost allowability and allocability requirements of OMB Circular A-21 for federal accounts will be consistently applied to all sponsored programs. To comply with those requirements, it is necessary to explain and justify transfers of charges to the sponsored program accounts. Timeliness and completeness of explanation of transfer are important factors in supporting allowability and allocability in accordance with the principles of the Circular.
When costs are charged to incorrect account(s), cost transfers or adjustments are needed to correct the initial cost assignment as soon as the error is discovered.
It is important that principal investigators monitor their projects’ expenditures on a regular basis to ensure that all charges have been applied correctly. If errors are made, they should be corrected promptly to minimize future occurrences. Cost transfers must be minimized, timely, well-documented, approved by the sponsor, and have appropriated authorizing signatures. Cost transfers into a sponsored program from another sponsored program or non-sponsored program must be directly related to that program and must meet the standards of allowability and allocability of the sponsored agreement.
Frequent errors in the recording and/or documentation of cost transfers may indicate the need for improvements in record-keeping and/or internal controls which may result in expenditure disallowances and/or loss of funds.
SCOPE
All offices of UT System Administration
WEBSITE ADDRESS FOR THIS POLICY
http://www.utsystem.edu/policy/policies/int1152.html
RELATED STATUTES, POLICIES, REQUIREMENTS OR STANDARDS
UT System Administration Policies & Standards |
Other Policies & Standards |
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CONTACTS
If you have any questions about UT System Administration policy INT 152, Deposits and Loans, contact the following office(s):
DEFINITIONS
Allowable
To be considered allowable, cost transfers must be timely, documented and explained in detail, adhere to System Administration’s and the sponsor’s standards, and have all appropriate authorizing signatures
Allocable
A cost is related to the project or incurred solely to advance the work under a sponsored agreement or benefit both the sponsored agreement and other work of the institution.
Cost Transfer
An after-the-fact reallocation of the costs or a transfer to a sponsored account of a charge previously recorded elsewhere.
Documentation
Original invoice, credit card receipt, and any other documentation that supports the transaction.
Effort
Time spent by employees on a sponsored project.
OMB Circular A-21
A circular published by the federal Office of Management and Budget (OMB) that establishes the principles for determining the costs applicable to grants, contracts, and other government agreements with educational institutions.
Principle Investigator
The individual responsible for the conduct of research or other activity described in a proposal for an award.
Sponsored Program/Project
A program/project funded by a grant, contract, or cooperative agreement under which the institution agrees to perform a certain scope of work, according to specified terms and conditions, for a specific budgeted monetary compensation.
RESPONSIBILITIES
Office of the Controller – Grants/Contracts Manager
Review and approve all cost transfers, payroll or non-payroll, before they can be processed into the accounting records. Track all cost transfers and train individuals or departments with excessive amounts or numbers of cost transfers as needed.
Principal Investigator
It is the responsibility of the principal investigators, director, and his/her designee to monitor and review their projects’ expenditures on a regular basis to ensure that all charges have been applied correctly.
Initiator and Preparer of Cost Transfer Form
An individual who initiates and prepares a cost transfer transaction has the responsibility to ensure that:
- he/she has the appropriate authority to initiate the transaction,
- the expenditure is necessary, allowable, applicable, reasonable, and complied with appropriate rules and regulations (grantor’s terms and conditions and/or federal),
- the expenditure is clearly stated within the budget,
- the expenditure is properly approved by the sponsor or allowable,
- support documentation has been provided.
Reviewer
- An individual who verifies information and ensures that the transaction complies with institution policy and specific sponsor guidelines.
- Reviewer has the same responsibility as those of the Initiator and the Preparer.
Approver
An individual who authorizes the transaction.
The approver has the responsibility to ensure that:
- all necessary steps have been followed in compliance with this policy,
- all personnel engaged in the financial administration of grant and contract projects are familiar with this policy.
PROCEDURES
Account Review:
All accounts must be reconciled to ensure that all transactions are correct and appropriate. This review should include the determination that the charges are reasonable, allowable, and comply with the terms and restrictions governing the sponsored project.
If errors are discovered, they should be corrected promptly with a cost transfer.
Cost transfer requirements:
A Cost Transfer Form must be completed for each cost transfer.
All cost transfers must be timely, documented and explained in detail, adhere to the sponsor’s standards, and have all appropriate authorizing signatures.
A detailed written explanation to support and justify the transfer as to why the initial charge was incorrect.
Timeliness:
Cost Transfer within 90 days (of the original transaction):
- Must have approval signatures from the principal investigator, the department head, and the Grants & Contracts Manager
Cost Transfers over 90 Days (after the original charge or effort certification) and exceeding five percent (5%) of the annual award:
- Must have approval signatures from the principal investigator, the department head, the Grants & Contracts Manager, and the Controller
- Must include a detailed explanation of the delay.
- Cost transfers on Sponsored Projects initiated after 90 days will not be approved unless it benefits the sponsor, (i.e. a transaction moves expenses off a Sponsored Project).
Cost Transfers for Salary
- Complete Cost Transfer Form
- Complete Personal Action Form (PAF)
The retroactive PAF must agree with the Effort Certification Report.
No salary Cost Transfers are permitted after Effort Certification Reports are completed and signed by the individual unless it benefits the sponsor.
- Forward completed forms to the Grants & Contracts Manager
Non-Salary Transfers
- Complete the Cost Transfer Request Form
- Forward completed form to the Grants & Contracts Manager
Once a sponsored project account is closed and the final report has been submitted to the sponsor, no expenses may be charged to the closed account unless it benefits the sponsor. Any charges identified after the close of the account can only be transferred to a non-sponsored program account.
Cost transfers are prohibited for the following:
1. Use of cost transfers for the purpose of using unexpended funds that is ending,
2. Use of cost transfers for the purpose of avoiding restrictions imposed by terms of the award agreement,
3. Transfer of costs from one account or budget period to the next one to cover cost overruns,
4. Transfer of costs allocable to activities of sponsored program by industry or other sponsors to federally-sponsored projects.
Forms and Tools/Online Processes
Cost Transfer Form to follow
Routing:
___ Requesting Department
___ Grants & Contracts Manager
___ Controller (for Salary Cost Transfers)
___ APS (for non-Salary Transfers)
COST TRANSFER FORM
DATE: Primary Contact: Extension:
Transfer Costs |
Account Number |
Account Name |
Certified by: Authorized Signer on Account (see Note 1) |
Date |
From |
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To |
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Note 1: I certify that this cost transfer complies with the Cost Transfer Policy and the terms and restrictions for the applicable/affected sponsored project.
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Description |
Date |
DEFINE Reference (Doc ID) |
Amount* |
Salary |
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Purchase |
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Travel |
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Other |
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* Does transfer amount exceed 5% of annual award? ___ Yes ___ No
Justification for Cost Transfer (check appropriate box)
Clerical or administrative error
Costs inadvertently assigned to an incorrect account
Other
Explanation for Transfer:
If >90 days since original charge or effort certification, please provide explanation for delay.
Review & Approval by Grants & Contracts Manager
Return to the Office of the Controller – ASH 5.
Appendix
None.
keywords: grants, cost transfer, cost transfers
