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Cost Transfers are necessary to ensure expenses are charged to the appropriate sponsored project or department. Cost transfers must be justified, documented, and completed in a timely manner to support the allowability and allocability of such costs.
Costs should be charged to the correct federal award when first incurred. Cost transfers to all sponsored projects should be completed within 90 days of when the transaction originally occurred and posted in the general ledger. Transfers must be supported by documentation that fully explains how the error occurred and a valid reason for the transfer to another project.
Based on the Principal Investigator's (PI's) direction and approval, a retroactive cost transfer is justified in the following circumstances:
- Correcting errors in clerical and/ or data entry.
- Transfers between projects with the same award number that is continuing between years.
- To transfer pre-award costs authorized in writing by the sponsor.
- To transfer the costs recorded in a risk project to a discretionary/operating project when an award fails to materialize.
Cost transfers between sponsored activities are not allowed in the following circumstances:
- To cover an actual or anticipated cost overrun
- To spend unexpended balances
- To transfer a cost to a sponsored project after the submission of the final financial report
- To circumvent award restrictions
All payroll and Other than Personnel Services OTPS (non-payroll) cost transfers related to sponsored awards should be submitted within 90 days of the original date the transaction was posted in the University’s general ledger. If a cost transfer is over 90 days, additional reasons for the transfer must be provided; these include why the cost transfer is late and actions that will be taken to eliminate future late cost transfers. Cost transfers over 90 days are seldom approved.
All cost transfers must include a detailed explanation and justification (i.e., rationale for allocation among projects) for the transfer. For example, an explanation that merely states that the transfer was made to “correct an error” is not sufficient.
Payroll: The PI or designee must submit a Personnel Action Submission System (PASS/xPASS) request (retroactive adjustment) to their school/departmental Human Resource Officer (HRO) for approval.
Other Than Personnel Services (OTPS): OTPS transfers must be submitted through the Journal Entry Management System (JEMS) with an appropriate explanation. The department must maintain documentation, which shows that the PI approved cost transfers between closely related projects.
Frequently Asked Questions
- If the transaction involves a payroll correction on a sponsored project, departments must submit an Account Change request through the Personnel Action Submission System (PASS) (if within the current fiscal year), xPASS (for prior year adjustments) or the Effort Reporting System (ERS) if the change is being requested during the certification period.
- If this involves Other Than Personnel Services (OTPS), departments must submit the request through the Journal Entry Management System (JEMS) and check the box for Correction of Error to Fund 24/25.
- The requestor will be prompted to answer two questions if within 90 days of the first payroll check date or original journal date for OTPS, or four questions if greater than 90 days.
- The request will route to Sponsored Programs Administration (SPA)for final review and approval. Once approved, the adjustment will post to the general ledger. If rejected, the department may be asked to provide further justification.
- Please refer to the Cost Transfer Policy for further guidance.