Cost Transfer

A cost transfer is shifting previously incurred costs, either labor or non-labor, from one sponsored award to another.

This reallocation of costs enables Principal Investigators (PIs) to allocate direct costs to their grants accurately.

According to the federal cost principles, a cost is allocable to an award if the goods or services involved advance the work under the award. If a cost benefits two or more projects or activities, the cost must be allocated to the projects based on the proportional benefits.

When to Request a Cost Transfer

A cost transfer is needed to correct an error in allocating project costs, and it should be accomplished within 90 days of the error being discovered.

A cost transfer cannot be initiated following the project account closeout period.

Appropriate reasons for cost transfers include:

  • To transfer labor dollars to align with the actual effort devoted to the project.
  • To correct a clerical or bookkeeping error such as a transposition of numbers.
  • Pending an award where work has begun prior to the arrival of the award document. A sponsored project account should be established in anticipation of expenses for a pending award. However, when this option is unavailable, expenses shall be posted to a non-sponsored account (9th ledger) and later transferred to the sponsored account, provided they are identified as pre-award charges.
  • When a particular charge to a sponsored project account benefits another sponsored project account because of the interrelationship of the work involved, that charge may be transferred to the other sponsored project account.Any cost allocable to a particular sponsored agreement may not be shifted to other sponsor agreements to meet deficiencies caused by overruns or other fund considerations.

How to Request a Cost Transfer

Once it is determined that a cost transfer is an appropriate corrective action, PIs or their administrator will need to complete a request for cost transfer labor detail and/or the request for cost transfer OTPS detail and the request for cost transfer form.

These documents will serve as documentation of cost transfers, which will be requested during an audit or other review.

The cost transfer form allows PIs to explain how the error occurred.

If the request for a cost transfer occurs more than 90 days after the transaction date, PIs must explain the delayed action.

Once completed, PIs should submit the details of the cost transfer and the cost transfer form to their Grants Officer (GO). The GO will review and share the request with the corresponding project administrator at the RF for approval.

If a request is not approved, the costs will remain in the originating account or be absorbed by a recovery account or the Research Foundation’s disallowance account.