Policy Manual
13. Cost Transfer Policies and Procedures
To comply with the requirements of OMB Circular A-122, NIH policy, and the requirements of other federal sponsors, SIBCR has established the following policy and procedures for the processing of cost transfers.
It is necessary to explain and justify transfers of charges into federal awards from other federal accounts, non-federal accounts or residual accounts. Timeliness and completeness of explanation of transfer are important factors in supporting allowability and allocability in accordance with the principles of the Circular.
NIH Grants Policy Statement
(12/01/03, pp.83-84) states: "Cost transfers to NIH grants by grantees should be accomplished within 90 days. Transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee. An explanation merely stating that the transfer was made 'to correct error' or 'to transfer to correct project' is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42 [record retention requirements] and must make it available for audit or other review. Frequent errors in recording costs may indicate the need for accounting system improvements and/or enhanced internal controls. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s)."
All SIBCR members, their staff and SIBCR employees must comply with the cost transfer policies.
Responsibilities
The Principal Investigator (PI) is responsible for ensuring that their staff and administrators abide by this policy and accompanying procedures when requesting cost transfers.
SIBCR is responsible for maintaining the policy and for answering questions regarding the policy. Individuals requesting cost transfers are asked to first contact SIBCR with questions on this policy, to ensure the grants management and accounting offices are aware of cost transfer questions and to ensure consistent guidance is provided.
Procedures
A cost transfer is a transfer to a federally funded sponsored account of a charge previously recorded elsewhere. Examples:
- Transfer pre-award costs from a holding account;
- Correct clerical error;
- Reallocate staff time and effort to reflect actual; or
- Reallocate shared services that were previously charged elsewhere.
If more than 90 calendar days have passed since the date of the original charge, an explanation for the lateness of the cost transfer (question 3 on the Cost Transfer Explanation & Justification Form) is required in addition to questions 1 and 2.
Cost Transfers after the 90-day period need the approval of the SIBCR Executive Director and/or Controller. Documentation justifying the lateness of the cost transfer should be attached to the form.
1. Approval for cost transfers submitted later than 90 calendar days (as defined above) will only be granted in extenuating circumstances; examples are given below. They DO NOT include absences of PI or responsible administrator, nor shortage or lack of experience of staff. It is the responsibility of the grantee and the PI to ensure the availability of qualified staff to administer and exercise stewardship over federally-funded projects in accordance with federal policies and regulations, including those relating to regular monitoring of expenditures and timely correction of errors and reallocation of expenses.
Examples of Acceptable Extenuating Circumstances for Cost Transfers Over 90 Days:
- Late issuance of a notice of grant award or full execution of a subcontract subsequent to the start of the budget year or other period of performance; supporting documentation required.
- Failure of another department or service to take action, e.g. on a properly submitted payroll distribution change request; supporting documentation required.
2. Federally funded accounts should never be used for expenses which will subsequently be transferred elsewhere. This includes continuations of the same project for which the notice of award or the new account number has not yet been received.
3. Requestors are advised to submit explanations for lateness (i.e. over 90 calendar days) to SIBCR for review before completing the form and assembling backup documentation. SIBCR is available to assist departments in all aspects of cost transfer explanation and preparation of documentation, both for transfers within the 90-day time limit and for those beyond.
Cost transfers that require an explanation in writing only (such as an email to the SIBCR Controller or Grants Manager) are those made within the accounting period (month) of the original charge.
Roles and Responsibilities
It is the responsibility of each SIBCR member and their staff:
- Ensure compliance with the SIBCR Cost Transfer Policy.
- Retain hard copies of all related documentation in accordance with applicable record retention regulations.
- Ensure that all personnel engaged in the financial administration of federally funded awards are familiar with the SIBCR Cost Transfer Policy.
Form
Cost Transfer Explanation & Justification Form (PDF)