Costs Transfer

CSU ensures that all cost is charged to the appropriate Federal grant, contract, cooperative agreement, or subaward when first incurred. However, there are circumstances where it may be necessary to transfer expenditures to a Federal award following the initial recording of the charge. A reallocation of cost, from one fund to another is called cost transfer. When this happens, CSU maintain to follow all provisions stated in the notice of Grant awards and 2 CFR Chapter I, Chapter II, Part 200, et al., Uniform Administrative Requirements (Uniform Guidance - UG), Cost Principles, and Audit Requirements for Federal Awards is followed at CSU. The UG provisions includes requirement for CSU to relate financial data to performance data and to ensure such data is current, accurate, documented and complete. These standards also require that accounting records which are supported by source documentation. This supporting documentation will assist in determining the reasonableness, allocability, and allowability of the cost in accordance with the terms and conditions of the award.

To initiate a cost transfer, the Grant Accountant must prepare a transfer request for submission to appropriate accounting personnel. All cost transfers must be in the same amount as the original charge unless the transfer is being divided among different departments. If divided, an explanation of the division must accompany the transfer request. The department requesting the cost transfer must have incurred the item of cost and must identify the goods and services and their quantities in the transfer request. All cost transfers must be for allowable costs and must be made within 120 days of the end of the month in which the original charge posted to the ledger.

The university identifies these recurring adjusting journal entries for posting to the general ledger in each accounting period. Nonrecurring adjusting journal entries must be prepared to properly reflect account balances. Nonrecurring adjusting journal entries include, but are not limited to, the following items:

  1. Correction of posting errors - Correction of clerical errors (such as typographical errors or transposition of account digits).
    1. Pre-Award Costs – At times it is necessary to begin spending on a research award prior to receiving the award document
    2. Pre-award costs must be authorized in accordance with sponsor and University policies. Such costs must be charged to a department or discretionary account and then transferred to the new award account when established.
    3. Transfer of pre-award costs should be made in a timely manner to ensure costs are recorded in the proper accounting period. However, they cannot be charged to the fund until it is in effect.
    4. Closely Related Projects – In order to meet this definition projects must be managed by the same PI, scientifically and technically related, contain no change in the scope of the grant, the arrangement must not be detrimental to the effort approved under each award and the relatedness must not be used to circumvent the terms and conditions of each individual award.
      1. When research on separate projects is closely related, it is possible that costs will be incurred that are allowable and allocable to either project. 
      2. If, after charging an expense to one of the accounts, it is determined that all or part of the expense is more appropriately charged to a second account, the allocable portion of the expense can be transferred to the second account with proper explanation.
    5. Cost Overruns
      1. May only be transferred to another research account when the projects are closely related as discussed above.
      2. Overruns which cannot be transferred to a related research account must be funded with non-federal funds and such amounts must be properly accounted for as cost sharing and included in the organized research base.
    6. Disallowed Cost – If a disallowance is identified, that cost must be transferred to an appropriate non-federal account.
    7.  Accrual of income and expense items
    8. Cost Transfers shall be supported by source documentation establishing:
      1. Timeliness
      2. Any cost transfers must be done in a timely manner based on sponsor guidelines but no more than 120 days of finding the error.


  • Adequate Documentation for All Journal Vouchers
  • All journal vouchers for journal entries are prepared only on the basis of adequate supporting documentation.
  • Authorization of Entries
  • All journal vouchers for entries into the general ledger are authorized and approved by the Chief Accountant or Director of Administration and Finance who is not involved in the origination of the entries.

In addition, the National Institutes of Health (NIH) Grants Policy Statement 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 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, and must make it available for audit or other review. The grantee should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both.”