Policy Title: Sponsored Reallocation of Charges & Cost Transfer Policy
Policy Statement: 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. It is the policy of Dartmouth College that charges to sponsored funds be reviewed on a regular and timely basis to assure appropriateness of charges and to prepare corrections on a timely basis.
Reason for Policy: To comply with allowability and allocability requirements of Office of Management and Budget (OMB) Circular A-21 and to promulgate best practices for all sponsored awards (federal and non-federal), 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. The transfer of charges from general ledger accounts and other sponsored 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.
Affected by this Policy: Dartmouth College administered sponsored awards federal and non-federal.
Who Should Be Aware of this Policy: Office of Sponsored Projects staff, Departments involved in managing sponsored funds, Principal Investigators and other faculty involved sponsored research and divisional and central financial administrators.
Contacts: Please direct general questions about this policy to your unit's administration. If you have questions about policy issues please contact the Director of the Office of Sponsored Projects. If you have questions about process issues please contact your OSP Grant Manager.
Simple Reclassification: Simple reclassifications are timely correction of errors made within the month following the accounting period of the original GL Transfer Date. This would include; transaction for any dollar amount that is being move to or from a PTA Account or re-class among multi project/task combo within that annual budget period or re-class within a PTA Account to correct an expenditure type.
Additionally if a correction is made within 90 days following the GL Transferred Date of the charge/pay period and the transaction is UNDER $500, or the transaction is within the same project/award or the transaction is moving from a PTA Account to a GL Account, these would be considered Simple Reclassifications as well.
Cost Transfer: Cost transfers are transactions (payroll and non-payroll) that move a previously recorded expense which involve a Sponsored Projects PTA Account. Cost transfers do not include simple reclassifications as described in the below flow chart. However, such transfers should be accomplished on a timely basis in accordance with this policy and monthly reconciliations of accounts. All cost transfers require adequate justification and approval of the Principal Investigator (Department Chair or equivalent can sign if PI is unavailable). Each cost transfer should be completed within 90 days of the date of the incurrence of the original expense. Cost transfers over 90 days will only be approved under extenuating circumstances.
Examples of Acceptable Extenuating Circumstances for Cost Transfers over 90 calendar days (note that all of these exceptions still require submission of the CT Form and supporting documentation): Late issuance of an account for reasons beyond the control of the requestor; Failure of another department to take action, e.g. on a properly submitted payroll distribution change request or Journals to align the allocation of prepaid tuition remission with effort.
Please Note: Acceptable extenuating circumstances do not include absences of the PI or administrator, lack of staff or inexperienced staff, or lateness of reconciliations.
Simple Reclassifications: Can be accomplished by the Department Grant Manager or Finance Center preparing a SPUD journal form (non-payroll) or a Wage Transfer form (payroll) and routing the completed form to OSP for approval. OSP uploads approved SPUD Journal into OGA. After OSP approves the Wage Transfer, it is emailed to appropriate Finance Center for processing.
Cost Transfers: Require adequate documentation to support the transactions being moved (examples include copy of a transaction report from IRA, copy of invoice, etc.). Justifications for transferring these transactions must be completed on the cost transfer form as well. Here are the questions on the form that prompt the justifications:
If the original transaction was incurred more than 90 days preceding the transfer request, the justification must also address:
Process: See the below link for the Reallocation of Charges Process Flow Chart which describes requirements, forms, and approvals.
Related Documents & Tools:
The NIH Grants Policy Statement (REV. 12/03, pp.83-84) http://grants.nih.gov/grants/policy/nihgps_2011/
OMB Circular A-21 http://www.whitehouse.gov/omb/circulars_a021_2004
Cost Transfer Form http://www.dartmouth.edu/~osp/resources/forms.html
OSP Policy Website: http://www.dartmouth.edu/~osp/resources/policies/
NIH Grants Policy Statement:
"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.
Last Updated: 8/7/12