University System of New Hampshire

R. Cost Transfers on Externally Sponsored Programs

 (Note: OLPM sections on this page may be cited following the format of, for example, "UNH.VIII.R.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)


1.   Introduction In accordance with the Office of Management and Budget (OMB),  it is necessary to explain and justify transfers of charges onto federally funded sponsored awards, when the original charge was previously recorded elsewhere on USNH’s General Ledger (GL). Timeliness and completeness of the explanation of the transfer are important factors in supporting allowability and allocability in accordance with federal requirements.

2.   Definition

Cost Transfer
A cost transfer is a journal entry that transfers an expense onto a federally-funded sponsored award that was previously recorded elsewhere on the University’s General Ledger (GL) and identified by USNH as requiring institutional approval before it can be posted to the GL.

Late Cost Transfer
A cost transfer that is requested more than 90 days after the monthly accounting period of the original transaction posting date is considered late. For example, if an original cost posted on 6/15/XX, then the 90 days would begin on 7/1/XX and end on 9/28/XX. Therefore, any cost transfer made on or after 9/29/XX would be considered late.

3.   Policy USNH has established the following policy for the processing of cost transfers to comply with the requirements of OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) and federal agency policies and procedures. Cost transfers are for correcting errors and are not to be used as a means of managing available balances. Project funds are not interchangeable, and the integrity of each grant account must be maintained.

4.   Cost Transfer Requirements Cost transfers are for correcting errors and are not to be used as a means of managing available balances. Project funds are not interchangeable, and the integrity of each grant account must be maintained.

The following are unallowable cost transfers:

  • Cost transfers solely for the purpose of utilizing unexpended funds of a sponsored award
  • Cost transfers used as a cost management strategy
  • Cost transfers between unrelated sponsored projects to avoid or eliminate cost overruns
  • Cost transfers that circumvent pre- and/or post-award restrictions
  • Cost transfers for any other reasons of convenience

With the exception of the below criteria, all cost transfers onto federally-funded sponsored projects require the completion of a Cost Transfer Justification Form approved by the Support Team for the Administration of Research (STAR), the Principal Investigator (PI) and Accounting and Financial Compliance (AFC) before entering the cost transfer into the USNH financial accounting system.

The following items do not require a cost transfer and should be processed as a journal (JEGR):

1. A single direct cost of $1,000 or less

2. A debit made within the same accounting period (same month) regardless of the original transaction amount

3. A debit made to a non-federal funding source

The following transaction types do not require the completion of a Cost Transfer Justification Form:

A. Transfers of true overdrafts (off sponsored awards to unrestricted accounts). These transfers may be made in lump sum entries rather than identifying individual transactions.

B. Transfers of expenditures between funds or GL accounts under the same award, in cases where there are no sponsor restrictions on the funds set aside in a particular fund.

C. Reallocation of salaries and fringe to reflect actual effort when the following apply:

i. When processed within 90 days of the month the charge originally posted; and

ii. Before the annual effort has been certified in the effort reporting system; and

iii. The effort certification due date has not passed.

D. Reallocation of Procurement Card (PCard) expense from a non-sponsored default fund when processed within 90 days of the month the charge originally posted.

E. Transfers of allowable and allocable expenditures incurred within the period of performance of an award but charged to a departmental, unrestricted, or other non-sponsored account while awaiting the fully executed sponsored agreement (transferred within 90 days of the end of the monthly accounting period of the original transaction posting date).

F. Reallocation of recurring expenses, or expenses that must otherwise default to non-sponsored FOAPAL for administrative reasons. All such expenses should have documentation of the allocation methodology.

G. Correction of administrative errors such as transposition/typos.

5. Roles and Responsibilities

Principal Investigator

  • Ensures that expenditures are allocable, allowable, and reasonable to a specific sponsored project.
  • Ensures that expenditures are allocated in accordance with award budget, sponsor guidelines, and Institutional policy.
  • Ensures that individuals have appropriate authority to incur and allocate expenditures.
  • Ensures monitoring of expenditures, timely correction of errors, and reallocation of expenses, including personnel effort, occurs.
  • Ensures compliance with USNH Cost Transfer Policy.
  • Initiates and/or authorizes requests for cost transfers.
  • Provides complete, clear and reasonable justification for transfers as required by this policy.
  • Manages project to minimize the need for cost transfers.

Sponsored Programs Administration: STAR

  • Ensures that personnel responsible for financial administration of sponsored projects are familiar with USNH Cost Transfer Policy.
  • Provides oversight and advice on sponsored post-award administration including cost transfers and effort reports.
  • Provides support to answer questions and concerns from PI’s, research staff and administrative staff regarding cost transfer issues.
  • Prepares cost transfer forms under direction of PI or designee and obtains approvals.
  • Ensures compliance with USNH Cost Transfer Policy.
  • Processes JV/JCST in Banner and uploads documentation to Xtender once all approvals are obtained.

Sponsored Programs Administration: AFC

  • Exercises stewardship over sponsored projects in accordance with specific award terms and conditions and sponsor policy.
  • Advises the research community, in particular the PI, designee and STAR on processing cost transfer adjustments and procedures.
  • Reviews and approves cost transfers and supporting documentation in accordance with Institutional policy and sponsor guidelines.
  • Provides training on Cost Transfer Policy and principles of sponsored project administration.

6. Notes

1. Agencies that fall under the Department of Health and Human Services e.g., Agency for Healthcare Research and Quality (AHRQ), Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), Health Resources and Services Administration (HRSA), Substance Abuse and Mental Health Services Administration (SAMHSA), Administration on Aging (AoA) as well as other HHS agencies (excluding the National Institutes of Health)] have the following condition in the HHS Grants Policy Statement, “Permissible cost transfers should be made promptly after the error occurs but no later than 90 days following occurrence unless a longer period is approved in advance by the GMO.” Cost transfers requiring sponsor prior approval must be routed to Sponsored Programs Administration for institutional approval and submission to the sponsor.

2. *To avoid unnecessary cost transfers, a Not Fully Executed (NFE) account STAR.

3. An account for an existing sponsored agreement must never be used as a holding account for another award’s pre-award expenses, including labor.

4. Expenditures must be transferred to an unrestricted account if the cost transfer is not approved by SPA.

5. Email is an acceptable form of approval.