A cost transfer is a transfer of charges within or between cost centers, internal orders, or WBS elements. Although costs should always be charged to the correct cost object when they are incurred, cost transfers are sometimes needed (for example, to bill interdepartmental costs or adjust billing errors).
When cost transfers involve sponsored projects, the transfer must meet the rules for allowability, allocability, reasonableness, and consistency as required by federal regulation and will receive additional review.
Processing a Cost Transfer
To process a cost transfer, use the appropriate method:
- If moving to a cost center: Use a budget transfer request (BTR).
- All other cost transfers: Use a journal voucher (JV).
When Are Cost Transfers Allowed?
Cost transfers involving sponsored accounts may require additional review and justification.
MIT allows cost transfers involving sponsored projects only in special circumstances, which may include:
- Error correction (any systemic problems contributing to the initial error must be addressed)
- Transfers between cost objects of the same sponsored project (e.g., child to child, parent to child, child to parent)
- Transfer of retroactive expenses from a discretionary account on a project necessitated by a delay in finalizing an award
Project Overruns
Cost transfers should not be used to address project overruns. If you encounter overruns, work with senior management in your DLCI to resolve.
Cost Transfers for Salaries and Wages
Cost transfers are typically not done for salaries and wages:
- Within 90 days: Changes can be made in eSDS without doing a cost transfer.
- After 90 days: A late transfer is required using a late salary distribution change request.
Criteria for Cost Transfers
Cost transfers must be:
- In conformance with Institute and sponsor policies: Allowable, allocable, reasonable, and consistent.
- Timely
- Cost transfers should be prepared and submitted as soon as the need for a transfer is identified, but no later than 90 days after the posting is made and/or within 30 days of the project end date, whichever comes first
- Cost transfers exceeding this time frame will require additional documentation as to why the transfer request was not made in a timely manner
- Supported by appropriate approvals
- Fully documented. Documentation should be easily understood by any reviewer (think: “If I leave, will an auditor be able to understand this two years from now?”) and include:
- Benefit to the receiving sponsored project
- Allowability and allocability to the receiving sponsored project
- Reason for transfer
- Systemic causes will be corrected so they will not recur
- Review by a person with knowledge of the project
- Allocation methodology
Updated September 3, 2025