COST TRANSFERS FOR SPONSORED PROJECTS

Purpose

The University of Texas at El Paso (University) has established this Policy to provide guidance for the administration of cost transfers for sponsored project funds consistent with federal and state regulations and sponsor policies.

Policy Statement

The University has established the following policy for the management of cost transfers to comply with the requirements of the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) and federal agency policies and procedures.

Overview

A cost transfer is a transfer of an expense onto a sponsored project previously recorded elsewhere on the University’s General Ledger (GL). Expenses transferred to sponsored projects must be allowable, reasonable, properly allocated, and provide a direct benefit to the project receiving the expense.

Cost transfers are for correcting errors and are not to be used as a means of managing available cash balances. Project funds are not interchangeable, and the integrity of each sponsored project must be maintained.

Type of cost transfers

• Non-Payroll Costs
  • Vouchers - PO vouchers and Non-PO vouchers
  • Expense Reports
  • Pro Card Charges
  • Inter-Departmental Transfers (IDTs)
  • Student Financial Expenses (Banner/Financial Aid)
• Payroll Costs
  • Transfer of payroll costs must be in compliance with University’s Handbook of Operating Procedures, Section 7, Chapter 11 Retroactive Changes to Salary Expenses.
  • Transfer of payroll costs must be processed using the appropriate eForm.

Allowable Cost Transfers

• Timely correction of technical errors, such as a data entry or transposition error.
• Transfers to move unallowable charges off the sponsored project.
• Timely salary changes in percent distribution among funding sources.
• Transfer of expenses to correct funding source caused by delay in project set up.
• Allowable cost transfers must be identified within 90 days of the expense being incurred.

Unallowable Cost Transfers

• Transfers processed solely to move deficit spending from one award to another unrelated award.
• Transfers that are processed solely to use up an unexpended balance.
• Transfers of expenses incurred for goods and services received before the project start date or after the project end date, unless specifically allowed in writing by the sponsor.
• Transfer of salary for terminated employees.
• Transfers that affect:
  • a previously submitted financial report.
  • a carryforward request required by sponsor.
  • a previously submitted final invoice.
  • a final expense confirmation by PI and/or Project Administrator to Grant Management Accounting as part of close out process.
• Expense charges not corrected within 90 days.
• Over 90-day cost transfer requests onto a grant, justified solely due to administrative oversight or lack of staff are unallowable.

Timeliness of Cost Transfers

Cost transfers should be entered as soon as an error is discovered. For a cost transfer entry to be considered timely, it must meet all of the following conditions:

• Within 90 days of the posting of the expense.

Prior to effort certification.

Cost Transfer Form

A Grants Expense Transfer Form must be processed and approved by the Project Investigator. The purpose of the form is to provide documentation explaining how the error occurred and a certification of the correctness of the new charge. The documentation must be clear and sufficient for an independent reviewer to understand the transfer and conclude that it is appropriate. A justification that merely states the transfer is being requested "to correct an error" or "to transfer to correct project" is not sufficient. The justification must address all of the following:

• Why the expense was originally charged to the funding source from which it is being transferred.
• How the expense contributes to the sponsored project to which it is being transferred.
• Action that has been taken to eliminate the need for similar cost transfers in the future.

Cost transfer requests that do not include all the information above will be returned to the department for correction.

Consistency between Payroll Documents and Effort Reports

It is essential that the salary distributions be consistent with certified effort reports. When the salary distribution reflects a material difference from the actual effort distribution, a payroll accounting adjustment must be submitted to bring salary distribution into alignment with actual effort. In addition, payroll distributions should be reviewed at least monthly and corrected if necessary to ensure that current and future distributions reflect the correct allocation of effort. If payroll accounting adjustments occur after effort has been certified, a recertification may be required.

Roles and Responsibilities

Principal Investigator (PI)

• Monitors expenditures on a sponsored award.
• Authorizes cost transfers, when appropriate.
• Provides necessary justification for all transfer requests.
• Ensures internal controls are adhered to for appropriate allocation of costs to sponsored projects.

Department, School/College or Center

• Works with Research Administration to resolve late posting charges (GMA) and to secure sponsor approval when necessary (OSP).
• Ensures internal controls are in place for appropriate allocation of costs to sponsored projects.

Grant Management Accounting

• Review all sponsored project cost transfer requests and approve or deny the request based on guidance established in this policy.
• Work with OSP, PI, and/or Project Administrator to secure required sponsor approval on late posting charges.
• Prepare financial reports, invoices, and final reconciliations to support timely close-out of all sponsored awards.

Policy Exceptions

In rare cases, there may be compelling circumstances where exceptions to this policy may be warranted. All exceptions to this policy must be supported by written justification and approved by the Department Chair or Center Director, and College Dean. The request must be forwarded to the Vice President for Research & Innovation, or designee, for final review and approval.