University of Vermont

Cost Accounting Services 


Cost Transfers involving Sponsored Agreements

A cost transfer is the assignment of an expense to a sponsored agreement that was initially recorded elsewhere in the University‚Äôs 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 Cost Transfer University Operating Procedure 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 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 comply with the 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 departmental personnel 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 changes? 
  • 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?
  • What proactive measures can the unit implement to minimize untimely cost transfer requests?
  • Is the process to identify/implement/track systemic corrective action effective in preventing untimely cost transfer requests?

Last modified May 09 2016 07:04 AM