A cost transfer, also known as a journal voucher, moves costs from one account to another to correct an error, to bill inter-departmental costs, or for other reasons associated with a department’s regular financial operations. Cost transfers should not be used as a means for managing project funds; they must meet the rules for allowability, allocability, reasonableness, and consistency. Cost transfers, when necessary, must be timely; late cost transfers (more than 90 days after the transaction) must meet additional documentation criteria and are strongly discouraged (or point to system issues in internal controls).
Why It’s Important
While it is important that expenses be charged to the correct project, any time you initiate a transfer, you invite the assumption that the transaction was not handled properly originally. Expenses being transferred to or from a sponsored project prompts scrutiny of the reasons for the transfer and the justification for moving those charges.
How To Comply
Initiate cost transfers involving sponsored projects only in these special circumstances:
- correction of erroneous charges documented and authorized by the principal investigator or the PI’s designee;
- transfers between cost objects of the same sponsored project (e.g., between a child and parent);
- costs benefiting more than one sponsored project; or
- transfer of retroactive expenses (including pre-award costs) on a project necessitated by a delay in finalizing contract negotiation.
Be sure to…
- provide supporting documentation that provides sufficient information to allow for a clear audit trail.
- process within 90 days of the original charge. For salaries, changes may be made within 90 days following the end of the quarter in which the salary was incurred.