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.  Acceptance of federal awards requires compliance with allowability and allocability standards as established in the federal cost principles. Federal cost principles require consistency in costs applied to federal and nonfederal awards; therefore, this policy applies to all sponsored programs.

UNH policy requires charging costs to the appropriate sponsored program when first incurred. There are, however, circumstances in which it is appropriate to transfer costs to or from a sponsored program after the costs are initially recorded. Additionally, appropriate routine cost redistributions occur during the normal monthly business cycle.

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 requires institutional approval (as defined below) before it can be posted.

Late Cost Transfer
A cost transfer that is requested more than 90 days after the end of the month in which the cost was originally incurred 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.  In accordance with the Office of Management and Budget, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (“Uniform Guidance”), it is necessary to explain and justify transfers of charges onto federally funded sponsored awards, when the original charge was previously recorded elsewhere on the University’s GL. Timeliness and completeness of the explanation of the transfer are important factors in supporting allowability and allocability in accordance with federal requirements.

Note:  Agencies that fall under the Department of Health and Human Services [i.e., 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.

4.   Cost Transfer Requirements.  Cost transfers to federal sponsored projects from another sponsored project (including payroll reallocations) that are processed within 90 days of the original transaction or not, require approval from the Principal Investigator (PI) (email is acceptable, and will be routed through Banner to the BSC Director or designee for approval.

The following are not considered cost transfers and do not require the completion of a Cost Transfer Explanation and/or Justification Form:

  • Transfers of true overdrafts (off sponsored awards to unrestricted accounts). These transfers may be made in lump sum entries rather than identifying individual transactions.
  • Transfers of expenditures between funds under the same award (i.e. between main and/or sub accounts), in cases where there are no sponsor restrictions on the funds set aside in a particular sub account.
  • Transfer of an incorrect charge from a sponsored account to a non-sponsored account.
  • Transfers of pre-award expenditures that were charged to a departmental account, if the costs are allowable and allocable, and were incurred within 90 days before the beginning date of the award.*
  • Transfers of allowable and allocable expenditures incurred within the period of performance of the 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 month end when original charge incurred)*.

*To avoid unnecessary cost transfers, a Not Fully Executed (NFE) account/account status should be requested from the Office of Sponsored Programs.

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

The following cost transfers require the completion of a Cost Transfer Justification Form. Pre-approvals from SPA, based on adequate supporting documentation and justification, are required before entering transactions into the USNH financial accounting system for any of the following:

4.1   Transfers (payroll and non-payroll) to a federal award initiated 90 days or more after the end of the monthly accounting period of the original transaction posting date.

4.2   Transfers of expense to correct a previous cost transfer made to a federal award.

Additional approvals are required from Office of the Senior Vice Provost for Research for any:

4.3   Proposed labor redistribution that affects a certified effort report UNH VIII.S.

Note: Extenuating circumstances DO NOT include absences of PI or responsible administrator, and/or shortage or lack of experience of staff. It is the responsibility of the University and the PI to ensure the availability of qualified staff to administer and exercise stewardship over sponsored projects in accordance with policies and procedures. This includes those related to regular/timely monitoring of expenditures and timely correction of errors and reallocation of expenses.

5.  Unallowable Cost Transfers.

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

6.   Documentation and Explanation.

All cost transfers must include a detailed explanation and justification for the transfer. If a transfer is to correct an error, an explanation that merely states that the transfer was made to “correct an error” is not sufficient.

If a transfer is made within 90 calendar days of the close of the accounting period from when the original transaction was posted in the University’s general ledger, documentation must include the answers to questions 1 and 2; if over 90 days, answers must be provided for all 4 questions and the cost transfer form must be uploaded with the journal entry.

  1. Why was the expense originally charged to the account from which it is now being transferred?
  2. Why should this charge be transferred to the proposed receiving account?
  3. Why is the cost transfer being requested more than 90 calendar days of the close of the accounting period from when the original transaction was posted in the University’s general ledger?
  4. What action will be taken to eliminate the future need for cost transfers of this type? Is this action being taken?

The certification of the correctness of the cost on the new award occurs when the BSC Director approves the journal.  It is recommended that the BSC use the Cost Transfer Justification Form as an option to fully document timely cost transfers.

For late cost transfers processed, the Cost Transfer Justification Form must be completed to fully document the reason for the transfer and why the request is being made more than 90 days after the end of the month in which the cost was originally incurred.

The BSC is responsible for retaining documentation for the cost transfer.  It is recommended that all documentation be uploaded into Xtender.


For awards made prior to December 26th, 2014:

OMB Circular A-21: Subpart C,


Allocable costs

OMB Circular A-110:Subpart C,


Standards for financial management systems


Allowable costs


Financial reporting



For awards made on or after December 26th, 2014:
2 CFR § 200


   Section D – Post Federal Award Requirements


   Section E – Cost Principles


Administrative Responsibility: UNH Senior Vice Provost for Research

Effective date:  7/1/95; revised 7/16/97, 12/14/98, 4/26/07, 2/21/12

The College of Life Sciences and Agriculture (COLSA) and UNH Cooperative Extension (CE) manage externally sponsored programs, including federal appropriations that are outside the purview of SPA. COLSA and CE oversee cost transfers affecting these sponsored programs and have authority to approve transfers beyond the 90 day limit and transfers removing a bottom line deficit for AES and CE programs.

This page last updated Friday, January 12, 2018. For information on the adoption and effective dates of policies please see explanation on the OLPM Main Menu.