The purpose of these guidelines is to provide information
regarding cost transfers for grant related activities. 2 CFR Part
220, (formerly OMB Circular A-21, Cost Principles for Educational
Institutions) establishes the principles for determining costs
applicable to grants, contracts, and other agreements with
educational institutions, as well as defining the documentation
required for such costs. To comply with the federal requirements,
it is necessary to explain and justify transfers of costs.
A cost transfer is an after-the-fact reallocation of cost from one
FOAP to another. Although it is preferable to charge costs to the
correct FOAP when they are incurred, cost transfers may become
necessary in certain circumstances.
In order to transfer cost to a sponsored project, the cost must meet
the following guidelines:
- Allowability: It must be allowable under the terms and
conditions of the award, including the authorized budget and
- Allocability: The goods and services received must benefit
the award charged during the life of the award. Goods or
services shared by more than one project are allocable in
proportions that can be approximated through actual use.
- Reasonableness: A cost is considered reasonable if the
nature of the good or services acquired, and the price, reflect
the action that a prudent person would have taken at the time
the decision to incur the cost was made.
- Consistency: Application of costs must be given consistent
treatment within university established policies.
- Timeliness: Cost transfers should be requested with 90 days
from when the initial charge posted.
Click here to access the Journal Entry form to request a Cost Transfer.
For transfers of labor costs, contact your assigned Grant Accountant.
Supporting documentation is required to sufficiently document the
reason for the transfer request.
Cost Transfer (Journal Entry) requests must be approved by the Principal
Investigator, and adhere to BANNER signature authority. Once the
Journal Entry form is fully completed, it should be sent to the assigned
Grant Accountant for processing.
The Grant Accountant will review the request and the supporting
documentation. A second accounting approval (normally the Associate
Controller) must also be obtained before the entry can be processed.
If more than 90 days have elapsed since the cost requiring transfer has
been incurred, then a special Cost Transfer Request form must be
completed. This form requires a complete written explanation regarding
the delay and must be approved by the Controller before processing.
Click here to access this form and instructions.
Examples of commonly requested Cost Transfers:
- To correct an erroneous posting when the original source
document or subsequent processing (e.g. Requisition, PO, Payroll
transaction, or Accounts Payable transaction) contained an incorrect
FOAP or amount;
- To distribute/allocate certain high numerical, but small individual
charges, such as copy machine costs, mailing charges, telephone
charges, and office supplies;
- To record a change in use of goods or services from what was
- To align labor charges with actual effort provided;
- To redistribute purchasing card charges.
Examples of unallowable types of Cost Transfers that will NOT be
- Transfers requested for sole intent of spending down the remaining
unexpended grant balance at the end of the project;
- Labor costs that have been certified in a prior effort certification period;
- Transfers requested for reasons of convenience, such as to shift
costs to another sponsored agreement due to cost overruns;
- Transfer requests for costs incurred prior to the start date of the award.
Costs incurred prior to the start date of the award are considered pre-
- Costs will not normally be transferred more than once. Since the
original cost transfer has already been justified, documented, reviewed,
and accepted as appropriate, a second transfer of the same cost is
highly suspect and should be unnecessary.
Page last modified December 21, 2016