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Cost Transfers Policy

West Virginia University Policy
Division of Administration and Finance


WVU-CO-4

COST TRANSFER POLICY

PURPOSE

To comply with the cost allowability and allocability requirements of Federal Office of Management and Budget (OMB) Circular A-21, it is necessary to explain and justify transfers of charges into sponsored awards (grants). Timeliness, completeness and an explanation of these transfers are important factors in supporting their acceptance by granting agencies.

National Institutes of Health (NIH) Grants Policy Statement (12/01/03, pp.83-84) 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 another or from one competitive segment 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 [record retention requirements] and must make it available for audit or other review…. Frequent errors in recording costs may indicate the need for accounting system improvements and/or enhanced internal controls…. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s).”

To comply with the requirements of OMB Circular A-21, the policy of NIH, our largest source of federal research funding, and the requirements of other sponsors, West Virginia University has established this standard for the processing of Cost Transfer Requests.

SCOPE

This policy applies to all Cost Transfer Requests against sponsored awards initiated by all departments of West Virginia University, inclusive of West Virginia University Research Corporation.

DEFINITION

A Cost Transfer is the reassignment (transfer) of a previous expense from one account to another. Cost Transfers can include salary and non-salary expenditures. Examples include, but are not limited to the following:

POLICY

Cost Transfer Requests must be completed within 90 days of the original expense and include a documented and explicit explanation of the basis or need for the transfer (this should be in the form of a memorandum or typed directly on the Cost Transfer Request document).

PROCEDURE

Cost Transfer procedure development rests with Financial Services.

RESPONSIBILITY FOR IMPLEMENTATION

All employees are charged with providing full support to this policy. It is the responsibility of the Dean or Director to implement and maintain this standard within their respective college, department, or unit.

RESPONSIBILITY FOR INTERPRETATION

Responsibility for interpretation of this standard rests with Financial Services.

Effective Date: October 4, 2010
Approved By: Narvel G. Weese, Jr., Vice President