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Cost Transfer Correction

Cost Transfers

Policy

A cost transfer is any transfer of expenditures to or from a sponsored project (i.e. an LBFDN G fund) to align costs with the actual benefit received on the project. The request for a cost transfer should only be required in rare circumstances, as the PI is responsible for ensuring that the original transactions are appropriately and accurately charged to the correct account.

Office of Management and Budget (OMB) Circular A-21 Section C4 states that “any costs allocable to a particular sponsored agreement under the standards provided in (OMB Circular A-21) may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience.” CSULB considers any cost transfer made for any of these purposes inappropriate, but recognizes that there will be certain circumstances when cost transfers must be done to correct charges on sponsored accounts.

The government also requires that cost transfers be done in a timely manner. Most government agencies define “timely” as within 90 days. CSULB has adopted this guideline for timeliness. Only in cases of exceptional circumstances will cost transfers be permitted more than 90 days after the original charge. Additional explanation is required here to document the reason for the lateness of the request and the steps to be taken to assure that transfer requests are made timely in the future.

This policy is not applicable to the following:

  • Transfers made to and from accounts due to internal accounting processing errors.
  • Transfers made between account codes on the same fund/project combination.

Adherence to this policy and procedure is necessary, as inappropriate or poorly documented cost transfers can result denied reimbursement or disallowance of these questionable charges or imposing other sanctions on the University, such as fines or loss of certain authorities.

Procedure

As defined in the Policy, a cost transfer is any transfer of expenditures to or from a sponsored project to align costs with the actual benefit received on the project. The subsequent procedure should be followed when requesting a cost transfer to or from a sponsored project. It is important to note that transfers made to an unrestricted account to clear a deficit on a sponsored account are not considered cost transfers. If cost sharing is required for the sponsored agreement with the deficit, these costs may be used to offset the cost sharing requirement.

To initiate a cost transfer request to an LBFDN G fund, the PI is responsible for completing a Cost Transfer Request form Microsoft Excel Spreadsheet in accordance with the associated directions. The request form can be sent electronically to the attention of the responsible Grants and Contracts Administrator (GCA) at orsp-postaward@csulb.edu from the PI or an authorized designee’s e-mail, the e-mail will serve as adequate authorization for the cost transfer. The PI should ensure that these requests:

  • Are within 90 days of the original transaction,
  • Identify a specific expense to be transferred, and ensure that any costs being transferred to a G fund are compliant with the Direct and F & A Charging of Costs on sponsored awards.
  • If an expense is being moved to a G-fund/project, explain how that cost benefits the project. If the cost is typically considered an indirect cost, please also justify why it can be charged directly to account.
  • Provide additional justification (section 3 of the Cost Transfer Request Form) if the request is not made within the 90 day period.

The following illustrates appropriate and inappropriate reasons to request a cost transfer, please contact the GCA office for further guidance or clarification.

Acceptable Reasons for a Cost Transfer

  • To transfer salary to align with actual effort devoted.
  • To correct a clerical or bookkeeping error on original transaction forms such as a transposition of numbers. A full explanation of how the error occurred, followed by the steps taken to prevent the error from reoccurring must be provided.
  • To transfer sponsor approved pre-award costs to a sponsored account once it has been established.
  • To move expenses between projects which have been designated as “closely related projects” by a NIH or National Science Foundation (NSF) Grants Officer.
  • To move a cost overrun to a non-sponsored account (e.g. to a “RS” or an “M” or “C” fund).

Unacceptable Reasons for a Cost Transfer

  • To transfer costs to cover a deficit on another award.
  • To transfer costs to spend the balance of an award.

Once the Cost Transfer Request form is completed it should be sent to the appropriate GCA (orsp-postaward@csulb.edu). ORSP is responsible for reviewing and approving all cost transfer requests and ensuring that they are compliant with the guidelines established within this procedure. Should ORSP decide that the cost transfer is not appropriate the request will be returned to the PI. If approved, the GCA will prepare a journal entry for the expense to be transferred and posted.

Cost Transfer Request Instructions

From Fund # The fund where the charge is currently posted.
To Fund # The Fund # ("G") where the charge should be posted.
Requestor The name of the person completing the form.
Date requested The date the form is completed.
From Expense Account # The Account (6 digits) code of the original charge.
To Expense Account # The Account (6 digits) code where the charge should be posted.
Post date The posted date of the original expenditure on the General Ledger.
Reference Number The primary reference number on the original transaction, which can be found in the transaction record, typically the Document Line Description (Doc Ln Descr). If you don’t provide the reference number, attach a copy of the detail report with the expense(s) to be transferred highlighted.
Description The name of the vendor, employee name and campus ID #, or other description showing in the transaction record.
Amount The total direct amount to be transferred. Associated F&A costs will be automatically transferred. If only a portion of an expense item is being transferred, explain why in the justification section.
Justification (1) Per OMB Circular A-21 guidelines, expenses “…may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by or by terms of the sponsored agreement, or for other reasons of convenience.”
Certification

This should be the signature of the Project Director (PD) assigned to the project the expense is being transferred to. The PD should review the request for completeness and accuracy. The PD's responsibility is to ensure that the University is in compliance with these regulations. The PD is responsible for ensuring that cost transfers are:

  • Made within 90 days after the month in which the cost was originally recorded on the Financial Accounting System but no later than 60 days after the project terminates, and
  • Supported by a written explanation that describes in detail why the transfer is necessary.
Approval The Sr. Director of Sponsored Programs will review the request for completeness and allowability.

View the Cost Transfer Policy for further guidance.