A Cost Transfer is (Per GIM 15):
- Moving an expenditure from one budget to another.
- Moving an expense from one object code to another.
- Correct other transaction coding errors (e.g., PCA codes).
A Cost Transfer should only be done for the following reasons:
- To correct an erroneous charge to an incorrect budget or object code).
- T correct an error when the value of the transaction is greater than $10.00.
- Re-allocate expenses where the expense can only be initially coded to one or a few budgets.
A Cost Transfer is NOT a Financial Management tool to be used to:
- Move costs for budgetary convenience.
- Temporarily post costs in a sponsored budget until a budget number becomes available (use department budget or request an Advance Budget).
Best Practices- How to avoid Cost Transfers
- Ensure there are good Internal Controls for coding of expenditures.
- Reconcile budgets in a timely manner.
- Review Award and applicable regulations to ensure all costs are allowable.
- Ensure that costs allocated across more than one budget are treated consistently with other allocated costs.
- Monitor Award budgets to ensure funds are expended in accordance with the award.
- Monitor Award budgets to track expenditures and available funds.
Best Practices for Cost Transfer Documentation
All documentation on Cost Transfers should include the following information:
- Why the error was incurred and which internal control broke down.
- Steps the department is taking to ensure the error will not happen again.
- The tangible benefit to the recipient budget.