Cost Transfers Policy
West Virginia University Policy
Division of Administration and Finance
COST TRANSFER POLICY
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.
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.
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:
- Transfer of pre-award costs
- Correction of clerical errors
- Reallocation of effort and other non-labor expenses where multiple projects benefited
- Routine allocation of shared services
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).
- Cost Transfer Requests to adjust payroll-related expenditures will require no explanation or documentation if the Cost Transfer Request is submitted within 30 days of the end of the month in which the payroll expense posted in error to the incorrect account. Documentation is required if the Cost Transfer Request is submitted after 30 days past the end of the month in which the payroll expense posted in error to the incorrect account. The documentation must include a description of why the error occurred and include a statement saying no effort report has yet been issued for the time period of the transaction or a statement saying the effort will be re-certified in a timely manner upon receipt of a superseded effort.
- Cost Transfer Requests completed to distribute costs must be directly allocable to the grant or contract as defined by the policy on Direct Costs on Grants and Contracts (RC-CO-2) or supported by a detailed rate schedule consistent with the policy on Interdepartmental Services Rate Development (WVU-CO-1).
- Cost Transfer Requests moving expenses to a grant or contract cannot be submitted after 30 days past the expiration date of the grant or contract regardless of the allowability of the expenses.
- Cost Transfer Requests occurring within the last 30 days of a grant/contract period will require a written justification of the necessity for the transfer. Cost Transfer Requests for personal services must be broken down by each pay cycle, effort percentage, and title as indicated in the approved grant/contract award budget. * In circumstances of over or non-compliant expenditures, if the appropriate correction is not processed within the 30-day period after the expiration date of the grant/contract, Financial Services will initiate and process the required Cost Transfer against the designated Dean’s account. * Cost Transfer Requested to correct previously processed and posted Cost Transfers, use the date in which the original transaction was posted to MAP to assess whether or not the action is within the 90 day time frame.
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