Procedures/Guidelines for Cost Transfers on Sponsored Projects

Costs on sponsored projects to be transferred can be separated into two general categories: salary expenses (salaries of faculty and staff and wages for graduate assistants) and operating expenses (lab supplies, travel, publication costs, capital and non-capital expenses, etc.). Cost transfers for these two categories are processed as shown below:

1. Cost Transfers to Correct Errors
   Cost transfers to correct clerical or bookkeeping errors made in recording operating expenses are processed by creating a Journal Entry (JE) in Workday. Upon submission, the JE is routed electronically through appropriate approval queues.

   Cost transfers to correct errors made in recording salary expenses for faculty and staff, and wages paid to graduate assistants, must be made using the Payroll Accounting Adjustment Form which is used to reallocate labor charges. The form along with instructions for approval routing are available from the Office of the Controller – Payroll

   In either case, sufficient detail must be provided to justify the cost transfer and to explain what led to its necessity. The explanation "to correct error" or “to transfer to correct project” is not adequate explanation or justification.

    

2. Cost transfers to Closely Related Projects
   Transfer of expenditures to closely related projects occurs when two or more funding sources support the same technical effort and the expenditure could be assigned to any of the supporting sources of funding. Transfer of operating expenses to closely related projects is accomplished by creating a Journal Entry in Workday. Transfer of salary expenses paid to faculty and staff, and wages paid to graduate assistants, is accomplished using a Payroll Accounting Adjustment Form available from the Office of the Controller – Payroll.

   When closely related work is supported by more than one funding source, a cost transfer may be made provided it meets all of the following conditions:

   • The cost to be transferred is a proper and allowable direct charge to the receiving project.
   • The cost transfer contains a full explanation and justification for the transfer to the closely related project and a certification of the propriety of the transfer by the principal investigator.
   • All necessary reviews and approvals are obtained.

   
   In addition to approval by the Office of Sponsored Programs (OSP), all requests to transfer expenditures to correct errors or to transfer expenditures to closely related projects must be reviewed and approved by the Office of the Controller when the general fund is used.

    

3. Cost transfers to Remove Cost Overruns
   When the cost of a sponsored project exceeds its approved budget and the principal investigator cannot justify transferring the costs to another closely related sponsored project, the amount of the cost overrun must be transferred to a Departmental Fund. This is accomplished by creating a Journal Entry (JE) in Workday where necessary approvals are obtained electronically. When the general fund is used to remove a cost overrun, it must be clearly noted in the supporting documentation for the JE.