Late Cost Transfer Policy Exception Request Form

Late Cost Transfer Enforcement Program Department Process & Guidance

All late cost transfers are an exception to established policy. Effort should be taken to minimize the need for late cost transfers by reviewing financial activity in a timely manner and transferring expenses to the appropriate funding source within 120 days as necessary. By consistently reviewing expenses and transferring timely, the additional documentation and explanations associated with late cost transfers can be avoided, reducing potential audit disallowance risks to the University.

When is it Appropriate to Make a Cost Transfer?

Once an expense has been recorded in the General Ledger, it is only appropriate to make cost transfers in the following four situations:

• To correct an erroneous recording, such as when the original source document (e.g., invoice, payroll journal) refers to an incorrect Account or award number.
• To reflect a change in the decision originally made as to how the goods or services would be used (e.g., a case of beakers originally ordered for and charged to a teaching program but subsequently used by a research project).
• To redistribute certain high quantity but small value charges (e.g., paper costs, telephone charges, mailing charges) when allowed by the sponsor which are billed to departmental funds.
• To redistribute payroll costs based on after-the-fact verification.

A cost transfer must pass the following tests when the transfer is to a federal award:

• It must contain a reference to the invoice, payroll journal, or other documents that initiated the original charge.
• It should typically be for the exact amount originally recorded in the General Ledger. If transferring a fractional amount, the transfer must contain an explanation supporting a reasonable method of allocation.
• It must be fully explained, justified, and approved by the unit administrator(s) involved in the transaction. An explanation which states that the transfer is being made “to correct an error”, “to transfer to correct award”, or “expenditure inadvertently charged to incorrect award” is not sufficient.
• The approvals must include the Principal Investigator.
• Transfers must be processed within 120 days from when the original charge was posted.

If there are unavoidable circumstances that necessitate a transfer after 120 days, a full explanation is required, including a well-documented account of the events that led up to the late adjustment.

How to Submit a Late Cost Transfer Policy Exception Request

A Late Cost Transfer Policy Exception Request is required for all expenditure transfers that meet the following criteria:

• To be processed 120 days or later from the posting of the original charge(s)
• Transfer results in a new charge (debit) to a federal or federal flow-thru fund, or to a competing project in the same fund (new competitive cycle, same fund)

Late cost transfers are closely reviewed before being approved or denied. As a result, the review and processing of late cost transfers take significantly longer than non-exceptional cost transfers. Reviewing time increases when the Late Cost Transfer Policy Exception Request package submitted is incomplete, requiring further requests and additional response time.

To ensure timely processing of your late cost transfer request, follow the steps corresponding to Payroll and Non-Payroll expenditure transfers.