Cost transfers are non-payroll transactions that move funds from one account into another account. They differ from journal entries in that cost transfers may be initiated after the fact, but within 90 days of incurring the expense. The transfer of charges from other projects or programs to sponsored research awards is closely examined by auditors. Frequent, tardy or unexplained (or inadequately explained) transfers can raise serious questions about the propriety of the transfers and our accounting system and internal controls. The cost transfer form and system of approval signatures was developed to avoid audit questions regarding transfers.
It is the policy of Dartmouth College that costs should be charged to the appropriate sponsored award when first incurred. However, there are circumstances where it may be necessary to transfer expenditures to a sponsored award subsequent to the initial recording of the charge.
To comply with allowability and allocability requirements of Office of Management and Budget (OMB) Circular A-21, it is necessary to explain and justify the transfer of charges to federal awards from other federal or non-federal accounts. Timeliness and completeness of transfer explanations are important factors in supporting allowability and allocability in accordance with the principles set forth in the Circular.
“Cost Transfers to NIH grants by grantees…should be accomplished within 90 days…The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee…An explanation merely stating that the transfer was made “to correct error” to “transfer to correct project” is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42 (record retention requirements) and must make it available for audit or other review…Frequent errors in recording costs may indicate the need for accounting system improvements and/or enhanced internal controls. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s).”
All requests for a transfer of costs on PTAEO Accounts should be on a SPUD Cost Transfer Journal for non-payroll expenses. The Cost Transfer should be initiated right after the original charge/error was made.
All Cost Transfers involving a PTAEO Account must be sent to OSP/PTAEO Processing for approval, department fills out electronic SPUD Cost Transfer Journal, then emails it to PTAEO Processing, department needs to print a paper copy of the electronic SPUD Cost Transfer Journal, have the PI(s), Fiscal Office and OSP sign the paper copy of the SPUD Cost Transfer Journal, after OSP signs paper copy of the SPUD Cost Transfer Journal, the fully signed paper copy of the SPUD Cost Transfer Journal is given to PTAEO Processing to then upload the electronic version of the SPUD Cost Transfer JournalAll of the relevant questions on the form must be adequately answered as follows:
The form must be signed and approved by:
Attachments: Please attach copies of original transaction documentation (i.e., invoice, procard receipt, etc.).
Important Note: Explanations such as "to correct a clerical error" or "to transfer to correct project" are not adequate. Transfers of costs from one budget period to the next solely to cover cost overruns are not acceptable. Generally, the older the charge the more involved the explanation of the transfer should be.
Since Procurement Services tracks capital equipment, please inform Procurement Services of any Cost Transfers that involve capital equipment transactions being moved from one account to another.
During the period of transition between sponsored research awards some charges that should have been placed on the new sponsored research award year ended up being charged to the old sponsored research award year.
Authorization is requested to transfer the cost of supplies to the appropriate sponsored research award. The transferred supplies were purchased at the end of the old sponsored research PTAEO Account but are actually being used on the new sponsored research PTAEO Account. This action will enable the costs to fall on the proper account for the research being performed.
Some telephone charges were placed on a closed PTAEO Account.
Authorization is requested to transfer telephone charges identified above to the appropriate PTAEO Account. Ms. Smith’s telephone charges were inadvertently placed on a closed PTAEO Account instead of to her active PTAEO account.
Confusion over the appropriate PTAEO Account to charge by staff.
There are two PTAEO Accounts that represent two proposals awarded simultaneously to the same Principal Investigator. Both PTAEO Accounts share the same support staff; the awards and their respective numbers were inadvertently reversed by staff members. The resulting errors are being corrected by cost transfer.
