Cost Transfers
A cost transfer is an after-the-fact re-allocation of a cost from one PTA to another. Costs should be charged to the PTA for the benefiting sponsored project when first incurred. However, at times it may be necessary to transfer a cost to a sponsored project subsequent to the initial recording of that cost.
Stanford allows cost transfers involving sponsored projects only in special circumstances, including:
- Error correction,
- Transfers between Tasks of the same sponsored project,
- Disallowed costs,
- clearing an overdraft at the end of a project.
Cost transfers that represent corrections of errors should be completed within three months of when the error is discovered, and no later than six months after the expense is posted to an award. Errors found during the required monthly expenditure statement review process should be corrected upon discovery. The six month deadline allows one month to correct any errors discovered by PIs during the certification process. (e.g., expenses for spring quarter (April, May, June) must be certified by the PI by the end of August. If a transaction made on April 1 were discovered during the certification process, it must be corrected by the end of September to be within the six month period.)
A cost that benefits more than one project should be allocated at the time of the expenditure. At no time should a sponsored project be used as a holding account for costs that will subsequently be transferred elsewhere. Clearing accounts are appropriate for these situations (see Allocations and Offsets, Administrative Guide Memo 38.1 ).
A cost transfer is achieved with an iJournal in Oracle Financials. The policies related to cost transfers associated with sponsored projects are contained in RPH 3.13 "Cost Transfer Policy for Sponsored Projects".
Large transfers, and transfers within the first or last 90 days of a project, receive additional central review.
See:
Use an Early PTA for Pre-Award Costs
For the effective and economical conduct of a sponsored project, it is sometimes necessary for costs to be incurred before the award document has been received. In such cases, departments should request that the Office of Sponsored Research set up an Early PTA. The Authorization for Early Project, Task and Award Request form is available online.
The Early PTA becomes the permanent PTA when the award is effective; no cost transfers are needed. Pre-award costs must be charged to a pre-award account and may not be placed on an unrelated award and later transferred to the benefiting PTA. The restriction for cost transfers does not apply to transactions necessitated by a sponsor changing the award number.
Overdrafts must be Charged to a Cost Sharing PTA
An overdraft exists if after the end date of an award expenses exceed funding. Expenses removed as a result of an overdraft should have been incurred during the last six months of the project. If an error is discovered after the end of the award, a transfer of expense should be made by removing the expense prior to award closeout.
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.
If you are ever in doubt, contact your OSR representative or Ken Schulz for assistance. |
