RSP 506–02: Cost Transfers to Sponsored Projects
To ensure that the reassignments of charges involving a sponsored project account are compliant with the requirements contained in federal regulations and sponsoring entity guidelines
NIH Grants Policy Statement
HHS Grants Policy Statement
Office for Research and Sponsored Projects Administration (ORSPA)
The principal investigator (PI) on a sponsored project is responsible for ensuring that only allowable, allocable, and reasonable costs are charged to a grant, contract, or other sponsored agreement. Costs should be charged to the appropriate sponsored project when first incurred. However, there are circumstances that may require transferring expenditures to a sponsored project subsequent to the initial recording of the expense.
Transfers of costs either into or out of a sponsored project account require monitoring for compliance with ASU policy, federal regulations, sponsor-specific guidelines, and the cost principles that underlie fiscal activities on sponsored projects.
Federal agencies require grantees to have systems in place to detect and correct clerical, bookkeeping, or other posting errors within a reasonable time frame. To promptly identify costs that have been erroneously posted to a sponsored account, the PI or designated support staff must review and reconcile expenses at least on a monthly basis pursuant to FIN 203. Timely review of expenditures will help to correct errors and limit the number of cost transfers.
If an inappropriate expenditure is discovered on a federal project it must be removed. Cost transfers should normally be submitted within 90 days after the inappropriate cost was originally discovered. However, in some circumstances, cost transfers may be approved beyond this 90-day period provided such approval is consistent with the sponsoring agency’s guidance.
Shorter cost transfer periods may also be required by some agencies’ regulations (e.g., HHS requires cost transfers to be corrected within 90 days following occurrence).
It should be noted that reassignment of costs between accounts that are part of the same award do not, by definition, constitute cost transfers. Such cost reassignments are simply intra-award adjustments within a single award that has been set up under multiple financial system accounts for ease of administration. Likewise, reassignment of costs between master and companion cost sharing accounts are not subject to the guidelines governing cost transfers under this policy. Such reassignments are also considered to be intra-award adjustments.
Federal and other sponsor regulations require written justification, certified by a responsible university official (e.g., PI, authorized account signer), on all cost transfers that documents:
Explanations that merely state that the transfer was made “to correct an error” or “to transfer to correct project” are not sufficient to justify transfer of charges to a sponsored project account. Transfers from one sponsored project to another sponsored project to reduce cost overruns, to spend unused balances, to avoid restrictions imposed by law or agreement terms, or for other reasons of convenience are strictly prohibited by sponsors.
For authoritative references, see RSP 101, “General Research Policy.”
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