Research and Sponsored Projects Manual (RSP)

Effective: 5/20/1981

Revised:  11/1/2021

RSP 506–02: Cost Transfers to Sponsored Projects

Purpose

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

Sources

NIH Grants Policy Statement

HHS Grants Policy Statement

Office for Research and Sponsored Projects Administration (ORSPA)

Policy

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 201, "Cost Center, Grant and Project Manager Fiscal Responsibilities." 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. In addition, moving expenses from a non-sponsored account to a cost-share grant account do not, by definition, constitute cost transfers.

Adjustments of payroll between accounts before the After-the-Fact Acknowledgement is completed by the Principal Investigator/Authorized Reviewer for the associated semester do not, by definition, constitute cost transfers. Such cost reassignments are part of an effective internal control process to regularly review the reasonableness of payroll that has been mapped in advance to the account.

Federal and other sponsor regulations require written justification, certified by a responsible university official (e.g., PI, authorized account manager), on all cost transfers that documents:

1. why the error occurred resulting in the need for a transfer
2. what corrective action will be taken to avoid the error in the future
3. why the cost to be transferred is allowable, allocable, and a reasonable charge on the transfer to account

   and

4. how the charge supports performance of the project scope of work.

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.

Cross-Reference

For more information on how RSP policies are implemented during each phase of a project, see the ORSPA website, researchadmin.asu.edu.

For authoritative references, see RSP 101, “General Research Policy.”

skip navigation bar

---

RSP manual | ASU policies and procedures manuals | Index of Policies by Title | RSP manual contact | ORSPA Web site

Back to Top