The University of Vermont requires that all expenses and financial obligations made in support of federal and non-federal sponsored projects be charged to the appropriate project when incurred. There are a few situations when an expense should be transferred from the chart string where it was initially charged. In these cases, a cost transfer is generated to ensure the expense is appropriately re-allocated.

The Principal Investigator, and/or the Unit Administrator is responsible to review expenses on a consistent basis at least every 30 days to verify that all financial transactions are accurately and appropriately charged to the correct project. The guiding principles for allowable cost requirements are outlined in the Uniform Guidance (200.400 - Subpart E - Cost Principles).

A Cost Transfer is:

· Moving an expenditure from one budget to another.

· Moving an expense from one object code to another.

· Correcting other transaction coding errors.

A Cost Transfer should only be done for the following reasons:

· To correct an erroneous charge to an incorrect budget.

· To move expenses being charged from a departmental discretionary account to a sponsored project account when an Advance Account was not established.

· Bulk purchases charged to a non-sponsored chartstring, then allocated to the appropriate sponsored chartstring.

A Cost Transfer is NOT a Financial Management tool to be used to:

· Move costs for budgetary convenience.

· Temporarily post costs in a sponsored budget until a budget number becomes available (use department budget or request an Advance Account).

Best Practices - How to avoid Cost Transfers:

· Ensure there are good Internal Controls for coding of expenditures.

· Reconcile budgets in a timely manner (monthly).

· Review the award document and applicable regulations to ensure all costs are allowable.

· Ensure that costs allocated across more than one budget are treated consistently with other allocated costs.

· Monitor award budgets to ensure funds are expended in accordance with the award.

· Monitor award budgets to track expenditures and available funds.

All documentation on Cost Transfers should include the following information:

· Why the error was incurred and which internal control broke down.

· Steps the department is taking to ensure the error will not happen again.

· The tangible benefit to the recipient budget.

For information on roles and responsibilities and the process flow for non-payroll cost transfers, please see SPA’s Procedure for Non-Payroll Cost Transfers

Refer to the Cost Accounting Services website for information on processing payroll cost transfers.

If you have any questions or need assistance, please contact your SPA Financial Analyst.

Thank you.

Linda Serrantonio, CRA | Team Lead

Research Finance | Reporting

University of Vermont