The purpose of this procedure is to provide guidelines and procedures for requesting cost transfers to or from Sponsored Projects. Cost transfers are subject to audit scrutiny and must comply with the requirements of 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.
A. Justification Requirements:
Cost transfers required to correct errors or achieve proper, consistent, and equitable distribution of costs will be allowed if adequate justification if provided and necessary approvals are obtained. Documentation must be included that explains how the error occurred. Additionally, a certification of the correctness of the new charge by a responsible departmental official. An explanation merely stating that the transfer was made "to correct error" or "to transfer to correct project" is not sufficient."
A salary distribution change that increases or decreases the amount of salaries and fringe benefits being charged to Sponsored Project(s) should be made as soon as possible after the need for the transfer is recognized..
Questions regarding cost transfers should be addressed to the appropriate Grants and Contracts Accounting Team based on departmental assignment (see Distribution of Grants by Administrator) or at 792-2850.
B. Allowable and Unallowable Cost Transfers:
1. Examples of allowable cost transfers include:
a. Expenses not allowable on a Sponsored Project moved to a Non-Sponsored Project due to sponsor guidelines.
b. Personal services (salaries and fringe benefits) expenditures moved to a new award if award notification from the sponsor has been delayed.
c. Personal services expenditures necessary to align payroll charges with an employee's certified Quarterly Activity Report.
d. A cost overrun that has occurred once a Sponsored Project has terminated.
e. An expense posted to a Sponsored Project with an invoice date or pay period end date after the Sponsored Project has terminated
2. Examples of unallowable cost transfers include:
a. Moving charges from an over-expended Sponsored Project to another Sponsored Project with a free balance.
b. Moving charges to an active Sponsored Project when the charges have been posted to the project after its termination date.
c. Moving equipment and supplies charges to a Sponsored Project with a free balance within 90 days of termination.
d. Moving charges from a Sponsored Project to one which is about to terminate and has available uncommitted funds which will be lost if not expended.
e. Moving charges from a corporate award to a Federally sponsored award, particularly if the two awards deal with the same area of research.
A "Cost Transfer" occurs when costs, commitments, or encumbrances are moved from a Non-Sponsored Project to a Sponsored Project, or vice versa, or from one Sponsored Project to another Sponsored Program.
A. Cost Transfers of Personal Service Expenditures:
1. Complete a salary distribution change (fund change) form.
2. Provide a valid and complete explanation if the cost transfer changes the amount of salaries and fringe benefits being charged to the Sponsored Project(s). Acceptable reasons for a cost transfer to be submitted include:
a. To recognize effort in a past pay period on a newly established UDAK project.
b. To correct a posting or accounting error made in a prior period.
c. To correct allocation of past period charges based on the employee's actual effort distribution as certified on his/her Quarterly Activity Report.
d. To move excess or unallowed charges to the appropriate UDAK.
3. Transfers made more than 60 days after the posting date will be considered a late transfer and will require additional justification explaining why the transfer was late.
4. PEAR process:
a. Create PEAR in UMS and route through Teamworks.
b. Route the salary distribution change through normal approval channels in Finance and Administration.
c. If PEAR is for less than 59 days or less, then PEAR will process through Teamworks without GCA approval.
d. If PEAR is retro greater than or equal to 60 days, then department needs additional justification before GCA can approve the PEAR. If justification is not sufficient, PEAR will be automatically returned to the Originator through Teamworks for further justification.
e. If PEAR is adequate, it will be forwarded through Teamworks for processing.
B. Cost Transfers of Cost Overruns and Non-Personal Service Expenditures:
1. Complete a "Request for Cost, Commitment, or Encumbrance Transfer Form - Sponsored Projects". See forms section for links to forms and examples. The transfer must be completed no later than 90 days after the transaction posting date. Transactions past 90 days will require additional justification stating the reason for the delay and what action will take place to prevent this from occurring again. If justification is not complete, acceptable, or timely, the request will be returned or rejected. Any cost transfers affecting a previously submitted financial report or final invoice regardless of how old the original transaction, are generally unallowable.
2. Forward the original cost transfer form to GCA for review and approval. GCA will review it and either contact the department for corrections or approve the request. Upon final approval GCA will process the cost transfer journal entries.
Request for Cost, Commitment, or Encumbrance Transfer - Sponsored Projects
Excluded from these procedures are:
• initial transfers of charges for supplies, services, etc., from inventory or from a service/recharge center to Sponsored Projects in accordance with established accounting procedures.
• corrections of processing or keying errors that occur within MUSC's accounting system.
a. Date of Request, From, Department, E-mail: Enter this information for the Business Manager or designee responsible for the transfer request. The department sends GCA the Request for Cost, Commitment, or Encumbrance Transfer Form.
b. From UDAK: Enter the UDAK where the expense is currently posted.
c. To UDAK: Enter the UDAK to receive the transfer.
d. Posting Date: Enter the posting date in the accounting system. This will apply when requesting transfer of a particular expense. (If the project is overspent in a budget category that was not caused by one particular expense transaction, leave blank.)
e. Account Posted: Enter the 5-digit account object code number to which the expense is currently posted.
f. Reference Number: Enter the RQ#, PO#, FA#, or Purchasing Card # that applies. If this project is overspent in a budget category that was not caused by one particular expense, enter "MASS".
g. Account Transfer: Enter the 5-digit account object code number to receive the transfer.
h. Amount: Enter the expense dollar amount or the cost overrun dollar amount.
i. Explanation & Justification: Provide answers for Questions 1 and 2
j. The Business Manager or designee must sign the request form. If the expense is being transferred from one department/unit to another department/ unit, both department/unit Business Managers must provide approval signatures. All Cost Transfers to a restricted account that total $200.00 or more require the signature of the Principal Investigator receiving the expense. This also applies to the reallocation of credit card expenses that are more than 90 days old.