University of Vermont

Cost Accounting Services 


Cost Transfers involving Sponsored Agreements - New University Operating Procedure (UOP)

A cost transfer is the assignment of an expense to a sponsored agreement that was initially recorded elsewhere in the University’s general ledger. Sponsors such as the Federal  Government have regulations which expect robust internal controls and a full justification on why a cost transfer involving sponsored agreements is appropriate. The new University Operating Procedure which is in effect as of 1/1/2013 promotes important business practices to reduce cost transfers, improve internal controls and identify/submit cost transfer requests in a timely manner using a standardized form.  The UOP replaces the following two existing policies:

  • Cost Transfers on Grants and Contracts
  • Sponsored Projects Expense Transfers

The UOP provides detailed guidance in the following areas:

  • Minimizing cost transfers
  • Identifying and correcting costing errors in a timely manner
  • Justifying and documenting a cost transfer request
  • Authorization and approvals
  • Requirements for Untimely cost transfer requests

A responsible official of an Unit should assess its current business practices and make necessary adjustments to implement this new Cost transfer UOP within their respective unit. Here are some key assessment questions to use:

  • Are existing processes effective in charging costs correctly and timely to sponsored agreements?
  • When  the probability of funding is extremely high e.g. non-competing proposals, is my unit requesting budgets to be established in advance accounts for sponsored agreements?
  • Are faculty, staff and graduate students who are allocating their effort to sponsored agreements reviewing their planned effort on a quarterly basis and are their effort allocations being updated to reflect their planned effort? 
  • Are encumbrances and expenses posted to the Unit's department suspense account being reviewed on a monthly basis and transferred in a timely manner?
  • Does the justification and documentation for cost transfers requests typically provide a full explanation from which an independent reviewer can understand the transfer request and conclude that the expenditure is appropriate?
  • How will the Unit ensure that  the new Unit signature requirements on the new cost transfer form is implemented?
  • What proactive measures can the unit implement to minimize untimely cost transfer requests?
  • What process will be used to identify/implement/track systemic corrective action to prevent untimely cost transfer requests?

A PowerPoint presentation on the new Cost Transfer UOP  is available as a training tool for personnel involved in cost transfer requests.

Last modified December 31 2012 07:38 AM