Cost Transfers
A cost transfer is defined as an after-the-fact re-allocation of a cost from one PTA to another. These transfers sometimes move costs from or to a sponsored project PTA. A cost transfer is done with an iJournal in Oracle Financials. The policies related to cost transfers are contained in Administrative Guide Memo 38. In addition, the Oracle Financials website has tools to help users prepare accurate journals with adequate documentation.
Although costs should always be charged to the correct PTA when they are incurred, cost transfers are sometimes necessary.
Stanford allows cost transfers involving sponsored projects only in special circumstances, including:
- Error correction
- Transfers between sub-allocations of the same sponsored project
- Costs benefiting more that one project
- Clearing potential or actual overruns
- Disallowed costs
Any time you initiate a transfer, you invite the assumption that the transaction was not handled properly initially. If expenses are being transferred onto a sponsored project PTA, there will be considerable scrutiny of the reasons for the transfer, and the justification for moving those charges.
See:
Justification of benefit is essential.
Be ready for a review. The reasons for transfers will always be reviewed, BUT when the transaction is clearly not timely (more than two months after the end of the academic quarter), that transfer may get more scrutiny.
Need For A Cost Transfer Policy
To comply with the cost allowability and allocability requirements of OMB Circular A-21, it is necessary to explain and justify transfers of charges into federal awards from other federal accounts, non-federal accounts or University accounts (including transfers from the departmental cost share fund to the sponsored project fund). Timeliness and completeness of explanation of transfer are important factors in supporting allowability and allocability in accordance with the principles of the Circular. |
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