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.