Cost Transfer Policy

Catalog Number
AF
001
Scope

​A cost transfer can occur: 

  • Between two sponsored projects  
  • From a non‐sponsored fund to a sponsored project  
  • From a sponsored project to a non‐sponsored fund 

A cost transfer is processed one of two ways: 

  1. A payroll cost transfer is used to adjust an allocation of effort that was processed in a prior month. This is processed as a personnel action using the appropriate form (PAF or ePAF, graduate student appointment change form or Ad Comp).
  1. A nonpayroll cost transfer form is used to move all charges not part of salary or effort.
Purpose

The cost transfer policy ensures the integrity and allowability of charges which are transferred to and/or from a sponsored project after an initial charge posted in the accounting system. The purpose of the policy is to maintain University compliance with OMB Uniform Guidance 2 CFR 200.

Definitions

Cost Transfer - An after the fact reallocation of an expense to and/or from any sponsored project previously recorded elsewhere in the UMass General Ledger (GL).

Late Cost Transfer – A cost transfer requested more than 90 days from the original posting date, “journal date,” or start date of an appointment.

Policy

A cost originally placed on a project is certified for allowability, allocability, and reasonableness tests at that time. A cost transfer invalidates that original certification. Diligent and timely review of financial records, communication between principal investigators and departmental administrators should prevent cost transfers. However, under certain circumstances transfers may be appropriate. Transfers requested more than 90 days after the original posted date are only allowable for unique situations. Further justification for lateness and how the situation will be avoided in the future is also required.  

A cost transfer for the purpose of clearing an over expenditure from a sponsored project cannot be transferred to another sponsored project with a balance remaining for convenience.  This type of cost transfer is unallowable. Over expenditures at close out must be transferred to nonsponsored fund.

At close out, over expenditures can be transferred off of a sponsored project by the Controller’s Office to a non-sponsored fund with PI approval and do not need to be processed as a cost transfer.   

Cost Transfer Considerations

In general, cost transfers are allowable within 90 days to correct:

A.) Clerical or administrative error.  

B.) To move a charge upon sponsor request/approval.

C.) Cost benefitting more than one sponsored project:  When a charge benefits more than one sponsored project, that charge may be allocated in proportion with calculated usage.

D.) To apply costs to another project under the same award. Many awards have multiple projects to organize spending between PIs, budget years and/or isolate restricted funds within an award.

E.) Pre-Award costs or other allowable expenses that were charged to a non-sponsored fund before the sponsored project was set up in the accounting system. At no time can another sponsored project be used as a holding account for pre award costs.

F.) To correct effort distribution.

In any case, it is critical that the specific situation necessitating the transfer be fully documented and supported by all relevant backup material and dates. Backup material for non-payroll cost transfers (NPCT) consists of a completed NPCT form, pdf copy of the original accounting report UMGM7062 or Summit report to show the transaction details of the charges in the transfer.  Late salary/effort transfer justifications are required on the payroll forms.

Cost Transfer Requirements

The Research Accounting department  in the Controller’s Office is responsible for reviewing and approving all cost transfers involving sponsored projects.  In order for a cost transfer to be allowable, the transfer must be clearly documented, explained in detail, adhere to the sponsors terms and conditions, and be properly signed by the PI, CoPI, or PI’s delegate for the debit and credit.

Cost transfers should be prepared and submitted as soon as the need for the transfer is identified, but not later than 90 days from the original transaction journal date.  Any transfers requested after 90 days are considered late and require additional justification for delay, circumstance and how it will be avoided in the future. If an unallowable cost is found at any point, it must be removed from the sponsored project regardless of time.  Payroll transfers that require recertification by the PI are reviewed by the Assistant Controller for Sponsored Research.

Any cost transfer requested more than 180 days after the original posted date or appointment start date that debits a sponsored project is generally unallowable. Extenuating circumstances may be considered by the Controller’s Office and would need to be approved by the Compliance Manager, Assistant Controller for Sponsored Research and/or Controller to be processed.  PI absence/leave, absence or leave of a responsible administrator, shortage or lack of experienced staff do not qualify as primary extenuating circumstances for late cost transfers. If the justification is not approved, the charges will need to remain on or be transferred to a non-sponsored fund.

In Conclusion

The Controller’s Office expects consistent monitoring of sponsored project activity by the PI and department to prevent incorrectly charged expenses and reallocate allowable charges timely. All cost transfers must be documented and explain why the cost transfer is necessary, reasonable and allocable. At no time are cost transfers allowed to spend down balances, move overages to another sponsored project, or be used repeatedly as a way to manage expense allocations.

 

Policy Manager
Frank Sousa, Controller
Contacts
Contact Name
Denise Storm
Contact Title
​Audit and Grants Compliance Manager​
Contact Email
Contact Telephone
Contact Name
Liz Ortiz
Contact Title
Research Accounting Manager
Contact Email
Contact Telephone
Contact Name
Sibyl Jayne
Contact Title
Compliance Analyst
Contact Email
Contact Telephone
Approval Authority
Vice Chancellor for Administration and Finance
Executive Unit
Administration and Finance