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   Appendix B: Comptroller's Office Financial Policy 2111, Cost Transfers

The University's Financial Policy Statement No. 2111 addresses the subject of cost transfers. The purpose of the policy is to ensure that cost transfers that involve sponsored project accounts--both federal and non-federal sponsored projects--comply with requirements contained in federal regulations. OMB Circular No. A-21 states that, "Any costs allocable to a particular sponsored agreement (see the University's Financial Policy Statement No. 2109, 'Approval of Direct Cost Expenditures') under the standards provided in this Circular may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience." Other federal regulations require cost transfers to be made timely. The University's Policy Statement reads as follows:

1. The Office of the Comptroller is responsible for establishing procedures to ensure that cost transfers comply with federal regulations.
2. Federal regulations prohibit transferring costs to sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience. Furthermore, the regulations require that cost transfers be made timely.
3. The principal investigator or designee is responsible for ensuring that cost transfers that are necessary to distribute clearing account expenses, to correct salary distribution estimates, to correct clerical or bookkeeping errors, or to make other accounting adjustments are:
a. made within 90 days after the month in which the cost was originally recorded on the Financial Accounting System but no later than 60 days after the project terminates, and
b. are supported by a written explanation that describes in detail why the transfer is necessary.
4. Cost transfers between projects that comprise a program of related projects may be made if the following conditions are met:
a. the transfers are made within 90 days after the month in which the cost was originally recorded on the Financial Accounting System but no later than 60 days after the project terminates, and
b. the projects, if Federally sponsored, have been designated as related in accordance with granting agency regulations.
5. Cost transfers not made within the time frames stated above will be reviewed on a case-by-case basis and must be approved by the appropriate dean's office and the Office of the Comptroller.