A cost transfer is the moving of a previously recorded expenditure to a sponsored project from another sponsored project or other UMass Lowell (UML) account. The online Cost Transfer Form (docusign) is used to request a cost transfer.
The Uniform Guidance 2 CFR 200 prohibits the transfer of funds from one account to another simply to clear deficits, avoid restrictions on other accounts or for other matters of convenience. Careful consideration should be taken to properly charge the correct account or project at the time of purchase and payment. However, there are occasions when a cost transfer to a sponsored project would be appropriate.
Examples of acceptable reasons for cost transfers include:
- A clerical error in inputting/writing the account number
- The expenditure benefited an account(s) other than the one it was charged to or in addition to the original account
- The expenditure is being moved to a new account that represents a new budget period
- After review of account statements, the expenditure was determined to not be allowable or allocable to the project charged (form is not needed in this case; please contact your Financial Research Administrator [FRA] or Payroll with details to have expense removed)
Allowability of Expenditures
Awards are given to the University to meet specified goals and objectives. Expenditures to sponsored projects must be incurred to meet those goals and objectives. In addition, expenditures charged to sponsored projects must meet allowability criteria established in the Uniform Guidance 2 CFR 200 and University policies. The Uniform Guidance 2 CFR 200 has set forth the following standards to be met for expenditures to be considered allowable:
- The costs must be reasonable - a prudent person would have paid the stated price at the time for the goods or services obtained.
- The costs must be allocable – the benefit to the project of the goods purchased or services obtained is clearly identifiable and assignable.
- The costs must be consistently treated as direct or indirect costs in similar circumstances.
- The expenses must not be specifically disallowed by federal and state policies or by the terms of the award.
Cost Transfer Requirements
Office of Research Administration must approve all cost transfers to sponsored accounts.
Cost transfers should be processed within 90 days of the original charge and within 30 days of the end date of the project.
Cost Transfers greater than 90 days must have detailed justification:
- Include a description of the expenses being transferred.
- Provide detailed information; specify the type of supply and do not just state "supplies."
- Explain why the charge was originally coded to an incorrect account.
- Stating to correct an error is insufficient; describe the error.
- Explain how the charge benefits the new project.
- Describe how the supplies were used, etc.
- Explain how costs were allocated between two or more projects, if applicable.
- Required whenever the full amount of the invoiced amount is not transferred. Explain what the allocation is based on.
- Explain why the cost transfer is late, if the original charge was incurred more than 90 days ago.
- Also indicate what steps have been taken to avoid late detection of errors in the future.
Cost transfers must be fully documented. Supporting documents such as invoices (if available) should accompany the request as well as detail accounting records showing the original charge. Adequate documentation of cost transfers is required. Even allowable and allocable costs can be denied under audit if the documentation does not sufficiently explain the cost transfer as described above.
The online Cost Transfer form (DocuSign) must be signed by the Principal Investigator and submitted to ORA. The FRA will review the request and ensure adequate justification and documentation. The form is routed to Director, FRA (or other designee) for final review and approval. Expenditures must be transferred to an unrestricted account of the PI if the cost transfer is not approved by ORA.