Cost Transfers

What is a cost transfer?

A cost transfer occurs whenever an expense is moved from where it was originally charged.  Policy 7.19 Cost Transfers and Payroll Reallocations (http://policies.emory.edu/7.19 ) documents the requirements for transfers of direct costs to sponsored program agreements.  There are two types of cost transfers – salary and wage cost transfers governed by effort certification rules and systems and everything else.  Recharge center charges are an exception to the definition.  For sponsored program purposes, recharge center charges are original charges, not cost transfers.

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Why do cost transfers?

Legitimate cost transfers are generally necessary to correct errors in processing the original charge or because of some lack of information at the time of the original charge.  These include typos in the original coding; lack of timely coding information; inability to change the coding (system constraints) before processing an expense; and project splits happening after incurring the expense.

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What are improper cost transfers?

Improper cost transfers include:
  • Transfers of overdrafts on one project to use funds available in an unrelated project
  • Transfers that do not benefit the project charged or meet the test of allowability
  • Transfers that park charges until a suitable account is available to charge
  • Transfers after the allowable time of 90 days from the end of the month in which the original charge occurred (for non-salary transfers) and 90 days from the end of the effort period for salary adjustments.

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What is the impact of improper cost transfers?

Improper cost transfers on Federal sponsored programs are a violation of the False Claims Act (FCA) and can result in significant audit findings and/or loss of research funding.  Any audit cost disallowances, fines and penalties are the responsibility of the Departments/schools.

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