Research Policies
University Policy Number 4005
Subject: Cost Transfer Policy
Responsible Parties: Office of Sponsored Programs and Fiscal Services
Procedures: Cost Transfer Procedure Document and Cost Transfer Form
Related University Policies: Not Applicable
I. SCOPE
This policy applies to cost transfers on federally funded sponsored projects.
II. POLICY STATEMENT
The purpose of this policy is to ensure compliance with federal policies and guidelines related to the transfer of expenses to federally funded sponsored projects. As a recipient of federal funding, Mason is responsible for establishing policies that ensure compliance with the requirements of Office of Management and Budget (OMB) Circular A-21 and the terms and conditions of federal sponsors.
OMB Circular A-21 states, “Any costs allocable to a particular sponsored agreement under the standards provided in this Circular 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.” In order to meet allowability and allocability requirements of A-21, timeliness and completeness of justification is required.
In addition, National Institutes of Health (NIH) Grants Policy Statement states, “Cost transfers to NIH grants by grantees…should be accomplished within 90 days… transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee… An explanation merely stating that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient. Transfers of costs from one project… to the next solely to cover cost overruns are not allowable.
Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42, and must make it available for audit or other review. The grantee should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both.”
This policy addresses the reallocation of salary expenses and transfer
of other direct costs.
III. DEFINITIONS
Cost Transfer: A transfer of expenses (salary or non-salary)
to a federally funded sponsored project for a charge previously recorded
elsewhere.
Federally Funded Sponsored Project: A project where the primary source of funding is federal, including cases where the funding is passed through to Mason from a non-federal organization. Federal awards generally have a fund number (20XXXX) in the Banner Financial System.
Original Charge: The initial posting transaction date of an expense to the Banner financial system for non-salary charges. The pay period start date (effective date) for salary charges. All cost transfers need to be approved by the Office of Sponsored Programs (OSP) within 120 days of the original charge.
IV. RESPONSIBILITIES
OSP: Available to assist in interpretation of federal requirements
and the Mason Cost Transfer Policy. OSP reviews all transfers to sponsored
projects and will review and approve Cost Transfer Forms. OSP will retain
copies of Cost Transfer Forms and associated backup documentation for
audit purposes. OSP will work with Principal Investigators (PIs) and senior
departmental officials to determine a non-sponsored source of funding
for any disallowed cost transfers.
Principal Investigator (PI): Responsible for reviewing and monitoring
sponsored projects on a regular basis to ensure expenditures are charged
appropriately. If a transfer is required the PI or designee will process
the necessary documentation in a timely manner.
Senior School/Departmental Officials: Will provide a review of
cost transfers over 120 days to ensure appropriateness.
V. COMPLIANCE
The federal government recognizes there are instances when it is appropriate
to transfer expenditures to a federally sponsored project if there is
sufficient justification and the transfer is done in a timely manner.
Appropriate reasons include:
· Allocate costs that benefit more than one project;
· Reallocate planned effort to reflect actual effort;
· Correct erroneously charged expenses;
· Transfer pre-award costs
The above are examples of appropriate reasons for a cost transfer within
120 days of the original charge posting date, but should occur infrequently.
There is an expectation that all PIs and responsible departmental staff
charge the correct sponsored project initially. At no time should sponsored
project funds be used as a holding account for charges that are known
to belong elsewhere. When new project funds are established, necessary
paperwork should be submitted to allocate the appropriate salary expenses
to the award consistent with effort approved in the project budget.
The PI or designee with direct knowledge of the sponsored project must
review the account activity on a regular basis to ensure errors are identified
in a timely manner and the appropriate corrective actions are taken within
the specified timeframe. This review includes checking that all expenses
processed are posted to the award as intended and the necessary corrective
actions are taken to remove an erroneous charges posted to his/her sponsored
project.
VI. EFFECTIVE DATE AND APPROVAL
The policies herein are effective July 1, 2006. This policy shall be reviewed
and revised, if necessary, annually to become effective at the beginning
of the University's fiscal year, unless otherwise noted.
Approved:
_______________________
Maurice W. Scherrens
Senior Vice President
________________________
Peter N. Stearns
Provost
Date approved: July 14, 2006