Cost Transfer Policy

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Cost Transfer

Recently, many federal agencies auditing sponsored programs at colleges and universities have focused attention on unsubstantiated or untimely cost transfers. Funding agencies have questioned and/or disallowed transfers in instances where they were frequent, late (occurring long after the initial charge was recorded) and/or inadequately explained and documented. Transfers of this type, particularly when they occur on projects with significant cost overruns or unexpended balances, cause agencies to question the propriety of the transfers as well as the overall reliability of the recipient's accounting system and ability to properly administer sponsored programs. Accordingly, this memorandum restates Rutger's policy concerning cost transfers on sponsored programs and introduces a new form to document retroactive salary transfers involving 4-XXXXX accounts.

Cost transfers which represent corrections of clerical or bookkeeping errors must be made promptly after the errors are discovered. Any transfer must be supported by, documentation which contains a full explanation of how the error occurred and a certification of the correctness of the new charge. An explanation which merely states that the transfer was made "to correct error" or "to transfer to correct project" is not sufficient. It should be noted that frequent errors in the recording of costs may indicate the need for improvements in the academic unit's accounting system and/or internal controls. Departments may be required to evaluate the need for improvements in these areas and to make necessary changes. Any transfer which involves a change in previously certified effort will require a further statement indicating why the Personnel Activity CErtification report (PACE) was not corrected prior to certification, as well as a statement that the revised Distribution of pay accurately represents effort during the period indicate. Transfers and their accompanying justifications must be reasonable, equitable, and in realistic proportion to the benefit provided.

Cost transfers should be made within 90 days of the original charge. Any transfer made after this period raises serious questions regarding the propriety of the transfer. If a project director desires to request a transfer after this time, a further explanation of why the transfer is late must accompany a full explanation, and justification for the transfer and as well as a certification of the propriety of the transfer by the principal investigator/project director. Any transfer of costs on a sponsored program is ultimately the responsibility of the project director, who should retain appropriate documents to support requested changes. Cost transfers are subject to the review and approval of the Division of Grant and Contract Accounting office.

To document the required information for any retroactive salary transfer on a 4-XXXXX account, a separate, form has been developed as a Supplement to the Personnel Data Record (PDR). A copy of the form is attached.Click here Please make copies and attach one to each PDR which retroactively adjusts one or more 4-XXXXX accounts.

Listserv Announcement dated December 13, 2005 - "DHHS Office of Inspector General (OIG) Targets Cost Transfers"