Sponsored Agreements - Accounting for Cost Transfers

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Teachers College Policy Library

Sponsored Agreements - Accounting for Cost Transfer

Owner: Controller

URL: http://www.tc.columbia.edu/policylibrary/Sponsored Agreements - Accounting for Cost Transfer

Policy on Costs Transfers for Sponsored Agreements


To establish guidelines for the charging of costs transfers on sponsored agreements which are consistent with federal, state, city and private grantor regulations.  These guidelines comply with the requirements from the Office of Management and Budget Uniform Guidance (UG) as well as requirements from our federal/non-federal sponsors. 


Faculty and staff who request and authorize cost transfers on sponsored agreements.


The interpretation and administration of this policy shall be the responsibility of the Grants and Contracts Accounting Office in consultation with the Associate Vice President and Controller.


This policy applies to all sponsored agreements at the College. The College recognizes that cost transfers are sometimes necessary to correct bookkeeping or clerical errors and to allocate closely related work that may support more than one project.  The explanation for the cost transfer must be allowable, allocable, reasonable, and consistent.  Frequent, tardy and unexplained (or inadequately explained) transfers, particularly where they involve indices with significant cost overruns or unexpended balances, raise serious questions about the propriety of the transfers and call the College’s accounting system and internal controls into question.  These activities may result in expense disallowance by the grantor and monetary penalties and fines.


Original charges should be directed to the appropriate benefiting sponsored project. If it is necessary to process a cost transfer that involves a sponsored project, a Department Revenue/Expense Transfer Form should be initiated promptly (90 days from the original date of the transaction) and contain sufficient documentation and justification to support the cost transfer that would stand the test of a formal audit. The form and documentation should be routed to the Controller’s Office.

Under no circumstances may costs that benefit one sponsored project be charged temporarily on another sponsored project. Failure to adhere to this procedure will result in improper financial reporting and inappropriate reimbursement from the sponsor.

Cost Transfers within 90 Days

The 90 day rule is calculated from the original date of the transaction first posted in the general ledger.  For example: A charge first posted in the general ledger on May 2nd would begin its 90 day period May 2nd and end on August 2.

A Department Revenue/Expense Transfer Form should be submitted and the form explanation should include the following:

  • Copy of banner screen shot showing transaction date, description, account, reference number and dollar amount of the original transaction
  • A detailed explanation of the reason for the transfer (“to correct error” or “to transfer to correct project” are not considered sufficient reasons for transfers)
  • The reason for the division of the cost if only a portion of the original cost is being transferred

The Department /Revenue/Expense Transfer Form should be approved by the Principal Investigator or someone from the department who has first-hand knowledge of the sponsored project. Documentation related to the transfer will be kept by the Grants and Contracts Accounting Office in accordance with record retention requirement. 

Cost Transfers after 90 Days

In addition to the procedures for cost transfers within 90 days, originators are required to answer a series of questions when processing a cost transfer for an expense that is over 90 days:

  • What is the oldest original date of the expense(s) being transferred
  • Why was this original expenditure not charged appropriately?
  • Why should this charge be transferred to the proposed receiving project?
  • Why is this cost transfer being requested more than 90 days after the original transaction date?
  • What steps will be taken to prevent this type of error from happening in the future?

In addition to the approval of the Principal Investigator or someone from the department who has first-hand knowledge of the sponsored project, the cost transfer will require approval

from the Director of Grants and Contracts Accounting. This final approval by the Director will ensure that only appropriate changes are passed through the system.

Examples of circumstances where cost transfers are typically allowable:

  • Transfer of pre-award costs that are specifically authorized in writing by the sponsor
  • Correction of clerical and data entry errors often involving transposed or mistyped characters
  • Transfer between continuation years for the same award number
  • Reallocate time & effort to reflect actuals
  • Reallocate costs when originally charged to an non-grant index due to award materializing late but work needed to begin

Examples of typical circumstances in which cost transfers may not be allowed:

  • Reallocation of expenses because the grant has unexpended funds
  • Transfer expenses after award expired and  report was mailed to agency
  • Transfer to another sponsored grant due to cost overrun (expenses need to be transferred to a discretionary or operating index)
  • Transfers which do not explain why the error occurred and how the expense is appropriate to the project to which it is being moved
  • Transfer of an expense that was previously transferred
  • Charged to another grant to expedite order

Roles & Responsibilities

It is the role of each Principal Investigator and staff with delegated approval authority to:

  • Review sponsored research projects on a regular basis (e.g. monthly) to ensure that all expenditures charged are correct and appropriate
  • Submit and approve cost transfer journals in compliance with College policy and procedures
  • Ensure that all personnel engaged in financial administration of sponsored projects are familiar with the College cost transfer procedure

It is the role of the Grants and Contracts Accounting Office to:

  • Develop and implement cost transfer procedures in accordance with the regulations set forth from the OMB Uniform Guidance as well as the non-federal agencies.
  • Provide assistance in interpretation and implementation of the policy
  • Provide training on policy as needed
  • Retain hard copies of all related documentation in accordance with applicable record retention regulations
  • Serve as final approver on cost transfers greater than 90 days old
  • Periodically review cost transfers to ensure compliance with College and federal/non- federal regulations 


Original Charge: The first posting of a cost to the general ledger.

Cost Transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project within a 90-calendar day period from the original accounting date.

Late Cost Transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project more than 90 calendar days from the original accounting date.

Allowable: A cost must be charged to an index in accordance with the terms and conditions of the award as well as College policy.

Allocable: A cost must support meeting a specific project objective.

Reasonable: The nature of the goods or services acquired and amount paid reflect the action that a prudent person would have taken at the time the decision to incur the cost was made.

Consistent: Application of the cost is given consistent treatment within established College policies and procedures; costs for the same purpose are treated and classified the same way under like circumstances.

Responsible Office: Controller

Effective Date:

Last Updated: October 2016