Cost Transfers

A cost transfer is an after-the-fact reallocation of costs associated with a transaction from one Project-Task-Award (PTA) to another.  Refer to Research Policy Handbook 15.8 Cost Transfer Policy for Sponsored Projects 

Cost transfers should be completed within three months of when an error is discovered, and no later than six general ledger (GL) months after the original expense is posted to an award. Transfers that do not meet the timeliness criteria require additional central review and exceptional approval.  Only OSR Post Award Directors and Research Administration Policy and Compliance (RAPC) may authorize a transfer of an expense onto a sponsored PTA after six months with the concurrence of a school level approval.  

Where to Process Cost Transfers

• The Oracle Financials iJournals application allows users to transfer most non-personnel expenses from one account to another or across Expenditure Types or Object Codes.
  • Additionally, sponsored project Task Managers from within eCertification can initiate ijournal adjustments for most non-salary and non-capital transactions to which they have access within eCertification.
• Labor Distribution Adjustments (LDA) within Oracle Financials allows authorized users to transfer payroll earnings, which are paid by the PeopleSoft Payroll system*.
• Graduate Student tuition or TAL adjustments are processed by authorized users through the Graduate Financial Support (GFS) system*.
• Changes to capital equipment transactions are processed through the Capital Cost Transfer (CCT) application that allows the Property Management Office as a central office to make such changes. Changes to capital equipment transactions cannot be processed via normal ijournal transactions.
• Changes to incurred subaward invoices cannot be processed via normal ijournal transactions. If you need an adjustment made to an incurred subaward invoice expense, please work with the Financial Support Center

*After-the-fact reallocation of costs associated with graduate student RAships typically require entry in two systems: 1) an LDA to adjust the salary and benefits, and 2) a GFS entry to adjust the tuition.

Late Cost Transfer Exceptional Approval Process

1. The department administrator reviews the Research Policy Handbook 15.8 Cost Transfer Policy for Sponsored Projects, prepares the cost transfer in the appropriate system i.e., ijournals or Labor Distribution Adjuster, but does NOT submit/route the cost transfer until Step 4 is completed. 
2. The department administrator seeks and obtains department approval via email and provides the relevant ijournal or LDA transaction ID and acceptable supporting documentation.**
3. The department seeks and obtains school compliance approval via email.
   • SoM - Your department's assigned Research Financial Compliance Manager
   • SoE - Krista Roznovsky, Interim Director, Engineering Research Administration
   • H&S - Sonia Barragan, Executive Director for Research Administration, H&S Dean's Office
   • VPDoR -  Alex Ochoa, Research Administrator, Vice Provost and Dean of Research
   • SDSS - Jane Chen, Chief Financial Officer, Stanford Doerr School of Sustainability
   • GSE - Irene Lam, Director of Research Administration and Compliance, Graduate School of Education
4. The school compliance officer/POC seeks and obtains OSR Post Award director level approval via email.
5. If approved: 
   • For late cost transfers processed via an ijournal, the department administrator attaches the OSR Post Award director level email approval to the ijournal along with acceptable supporting documentation.**
   • For late cost transfers processed via an LDA, the department administrator attaches the OSR Post Award director level approval  email to the relevant SeRA record for the given project(s) and references the approval in the LDA justification.
     • Use Attachment Category: Correspondence and Backup; Subcategory: Correspondence and Backup and add a descriptive attachment note e.g., "Late Cost Transfer Approval of LDA for John Doe".

Note: If a late cost transfer transaction is submitted/routed for approval prior to completing steps 2-5, the cost transfer transaction will be returned to the submitting department.

**Acceptable supporting documentation includes OBI CER Expenditure Balance report, OBI CER Monthly Expenditure Details, OBI CER Expenditure Details report, Expenditure Transactions, and (PTD) screens of FFIT.

Cost Transfer Justifications - Tell the Story & Be Kind to Your Future Self

A good cost transfer justification allows anyone reviewing the cost transfer to easily understand how the expense benefits the receiving PTA(s). It should provide enough detail to inform approvers and auditors about the action taken. Think, "if I leave my position, will my successor, OSR, and/or an auditor be able to understand this two years from now?".  All cost transfer justifications should address the following:

1. Identify how/when the needed transfer was identified. For example, 
   • During monthly review
   • During quarterly review
   • When meeting with the PI/faculty/lab manager/etc.
2. Explain how the costs benefits/advances the statement of work of the project(s) to which it is being moved.  For example, 
   • The super gigantascope 3000 will be/is being used in the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army project.
   • The super gigantascope 3000 will be/is being used in the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army, NSF, and ONR projects.  Based on (choose one appropriate allocation method.  For example, historical experimental use, head count etc.) 25% or $XX is being allocated to the Army award, 25% or $XX is being allocated to the NSF award, and 50% or $XX is being allocated to the ONR award.
   • Post doc Brilliant will be working on the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army, NSF, and ONR projects.  Based on (choose one appropriate allocation method.  For example, historical experimental use/head count etc.) 25% or $XX Post doc Brilliant’s salary is being allocated to the Army award, 25% or $XX is being allocated to the NSF award, and 50% or $XX is being allocated to the ONR award.
3. Address how we will do better to avoid this type of issue in the future.  For example, if it is a recurring expense, advise what has been/will be done to ensure the issue does not repeat, or if it will, why.  For example:
   • The PO has been updated to ensure all future charges post correctly.
   • The service center has been advised of the updated allocation methodology to ensure future charges post correctly.
   • The labor schedule/GFS record has been updated to ensure future earnings post correctly.
   • Due to the XYZ system limitation it is not possible to charge these expenses correctly initially. Thus, each month/qtr. an adjustment is required to appropriately and correctly charge the benefiting projects.

The trick to writing a complete justification is to try to answer all possible questions. Again, it is critical to state explicitly how the project(s) that will pay this expense benefits from the transfer.  And remember, it is NEVER appropriate to transfer expenses to a sponsored project PTA just because it has money!

Never hesitate to ask your School Compliance Officer, the ORA Client Advocacy & Education (CAE) Team, or your department's assigned OSR Post award Accountant for help ensuring your cost transfer justification is adequate.  We are all in this together!

Let's Do This - Compare Justifications

Inadequate Justification: 

To correct a previously misapplied invoice.  This expense is allowable, allocable, and reasonable.

Better Justification: 

During December monthly expense review, the RA identified the invoice for the gigantascope 3000 which is being used in the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army project incorrectly posted to the old award for this project when the gigantascope 3000 is being used for the renewal segment, as confirmed by the lab manager.  This transfer is to correctly post the invoice to the renewal award.  This is a one-time adjustment, as there will be no additional invoices for the gigantascope 3000.  Going forward the RA, PI, and lab manager will be more diligent in reviewing purchase orders to ensure the correct award segment is entered at the time of purchase.

Explanation: 

The inadequate justification does NOT address how the need for the transfer was identified, how the cost benefits/advances the statement of work of the project to which it is being moved, or how we will avoid this type of issue in the future.  The better justification addresses all of these elements.  The length of a justification is irrelevant. A justification must include the pertinent facts, and be easily understood by anyone who may read it now and in the future.  

Please note, cost transfers submitted through the Oracle ijournal module allow for the attachment of documents.  Use this functionality for complex cost transfers that require a justification longer than you may enter in the ijournal Justification text box and/or to upload supporting documentation such as your allocation methodology for costs being allocated across multiple sponsored projects.

Use the below Cost Transfer Checklist to help you write the documentation and to facilitate a timely review by OSR.

Additional Resources

Need further cost transfer assistance? Have questions, feedback, or are experiencing other issues? Contact the Client Advocacy & Education Team.  We’re here to help!