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