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Guidelines for timely cost transfers
Reconciling your grant accounts on a monthly basis will ensure that expenditures are appropriate to, and within the restrictions of, your project. All costs must be allowable, allocable, reasonable, consistently applied, and necessary to achieve project aims.
A cost transfer is an account change to a previously approved and booked expense that takes place within 90 days of the booking of the original expense. You can correct an error found in monthly review accounts with a cost transfer.
The principal investigator, fiscal officer, and local level managers must conduct timely monthly reviews of grant expenditures. When purchasing an item or transferring a cost, these individuals must ensure the expenditure directly benefits the project. Items purchased at the end of a project (in the last 90 days) are subject to greater scrutiny during an audit and as such require additional justification.
If you find an error, initiate the cost transfer in a timely manner (within 90 days) of the original booked expense.Read IU’s policy outlining the roles of fiscal officer, account manager, and account supervisor
A clearly articulated justification is required to establish and maintain an audit trail. Provide a full explanation of the need for the transfer. An explanation such as “to correct error” or “to transfer to correct project” is insufficient.
- Explain why the original charge was not allocated to the correct account, and what corrective actions will be taken to ensure the error is not repeated in the future.
- Detail how the expenditure (whether salary or non-salary) benefits the project.
- Prepare salary transfer documents before effort certification documents.
- Overdrafts on sponsored projects may not be transferred to another sponsored project.
Late cost transfers
Cost transfers occurring more than three months from the month of initial expense require additional justification and approval of the Late Cost Transfer Committee. Cost transfers to accounts awarded under federal funds receive additional scrutiny.Request approval of a late cost transfer Learn how to complete the Late Cost Transfer Exception Request Form (Accessible 02/18/19)
If you need to incur costs for a project where the award is still pending, you are encouraged request an advanced account. This avoids the need for cost transfers later.Learn more about advanced accounts