How To

Prepare a cost transfer.

A cost transfer is an after-the-fact reallocation of a transaction cost from one PTA (Project-Task-Award) to another. You should charge a cost to the benefiting sponsored project PTA when it is first incurred. However, it may be necessary to transfer a cost to a sponsored project after you initially record that cost. Stanford allows cost transfers involving sponsored projects only under these circumstances.

  • To correct an error (Note, the following are not considered error corrections: allocations from service centers or clearing accounts, changes caused by account setup errors, situations where new funding comes through an unexpected mechanism)
  • To transfer between tasks of the same sponsored project
  • To remove disallowed costs
  • To clear an overdraft at the end of a project

A cost transfer invites the assumption that the transaction was not handled properly initially. The charge will be scrutinized for allowability and allocability to the benefiting sponsored project. The documentation or justification for moving charges will be scrutinized as well.

 

Use journals to transfer costs.

  1. Use New Journals to transfer non-salary or student aid expenses.
  2. Use Labor Distribution Adjustments to transfer salary expenses.
  3. Use Allocation Journals to distribute costs based on proportional benefit to a project. Allocation Journals are used when it is difficult to determine in advance how much to charge each account for a shared supply or service. Allocations are often used to distribute costs from Service Centers, Auxiliaries, or expenditure allocation service types. Often allocations are repetitive, or are required on a repetitive basis. To process an allocation journal, you must comply with Administrative Guide Memos 3.2.2 and 3.2.3 and have written approval on file from those with signature authority over the PTAs you will charge. You must be able to certify that:
  • The allocation has been processed in accordance with policy
  • The cost is an appropriate charge to the PTAs sharing the expense
  • The expenditure PTAs actually benefited from the cost of the goods and services
  • The transaction is documented according to policy

Keep in mind: Federal regulations require an expense solely advance the work under the sponsored agreement, or benefit both the project and other work in proportions that can be approximated through reasonable methods.

A cost that benefits more than one project should be allocated at the time of the expenditure. At no time should a sponsored project be used as a holding account for costs that will subsequently be transferred elsewhere. Clearing accounts are appropriate for certain situations

All cost transfers must be documented with a detailed justification of why the cost is being transferred. Use the Cost Transfer Check List

In Related Items below, see the link to information on iJournals.

Filed under Award Management