|Policy Approval Authority||President|
|Responsible Division||Division of Research and Innovation Partnerships|
|Responsible University Office||Sponsored Programs Administration|
|Responsible Officer(s)||Assistant Vice President for Research and Sponsored Programs|
|Contact Person||Dara Little, firstname.lastname@example.org|
|Effective Adoption Date||07-01-2016|
|Last Review Date||04-19-2022|
Finance / Risk Management
Sponsored Funding/Grants and Contracts
Reason for Policy
Federal regulations (2 CFR §200.405) require NIU to explain cost transfers to sponsored awards to ensure that the transfer is not occurring for the following reasons.
- To overcome deficiencies caused by overruns or other financial considerations.
- To avoid restrictions imposed by law or by the terms of the sponsored agreement or for other reasons of convenience.
A cost transfer is an after-the-fact reallocation of costs to a sponsored award. Costs for a specific sponsored project should be charged to the appropriate sponsored project when the expense is incurred. Doing so is important for proper cost allocation and enables accurate accounting of expenses necessary to support sponsor payment and indirect cost recovery.
Auditors and sponsors routinely monitor cost transfers to assess the internal controls NIU has in place to ensure charges to a sponsored award are allowable, reasonable, and provide a direct benefit to the project. It is recognized that transfers may be necessary to correct bookkeeping or clerical errors or to allocate closely related work, but transfers need to be done in a timely manner. An acceptable timeframe is within 90 days of the original transaction date though NIU’s year-end financial reporting requirements may limit this timeframe.
To avoid compliance findings that can affect NIU’s eligibility for funding, NIU should avoid cost transfers with the following characteristics:
- Costs transferred more than 90-days after the original transaction date.
- Transfers lacking adequate documentation or justification.
- Transfers made for convenience or to circumvent award restrictions.
- Transfers made to another grant account at the end of a project to relieve cost overruns.
- Transfers made from a local cost center or a grant account to spend out a project.
- Senior Administration – Vice Provosts, Associate Deans
- Director, Department Chair, Division Head
- Faculty and Staff
- Departmental/Divisional Business Administrators
- Finance Personnel
- Sponsored Programs Administration Personnel
DefinitionsAllowable: A cost is allowable when it meets the following:
- is necessary for the conduct of the project;
- is allowed by the terms and conditions of the award;
- is consistently treated between sponsored and non-sponsored funds;
- is not included as cost share against another sponsored project.
Closely related work: When the interrelationship of the work across multiple awards makes it difficult to assign costs to two or more projects or activities without undue burden, the cost is allocated to each award based on documentation that the cost is
Direct benefit to the project: When a cost is in direct benefit to a project, it is deemed to be allocable in that the cost is incurred specifically to carry out the scope of the award and is distributed against the award and NIU budgets based on the proportional benefit to the project. Costs benefiting two or more projects or activities should be allocated to each project when the allocation can be determined without undue effort or cost.
Original transaction date: The date when the expense posts to the university general ledger in PeopleSoft or the HR/GL Personnel Detail Report.
- The cost is allowable according to the terms and conditions of the award and is reasonable for the project;
- The transfer includes supporting documentation justifying the transfer;
- The transfer occurs within 90 days of the original transaction date or receives an exception from SPA.
- Move costs that were temporarily charged to an unrestricted local fund prior to executing a new award.
- Correct clerical or data processing errors.
- Correct costs charged to the wrong fund due to incorrect posting.
- Transfer costs to distribute effort (i.e., labor redistributions).
- Transfer costs for shared goods and services (e.g., laboratory supplies, long distance telephone costs, printing/photocopying, etc.) that benefit more than one project.
Cost transfers are not allowed if they are done to:
- Move costs that do not directly benefit the project.
- Intentionally charge the wrong grant account (i.e., park the charges).
- Move costs that are incurred outside of the period of performance (unless specifically allowed by the sponsor).
- Transfer expenses from any source, including unrestricted local funds, solely to spend unused sponsored project balances.
- Transfer costs to another sponsored project for one or more of the following:
- Eliminate an overdraft caused by overruns or other financial considerations, such as budget constraints, project completion date, or early termination;
- Avoid restrictions imposed by law or by the terms of the sponsored agreement; or
- For other reasons of convenience.
Roles and Responsibilities
Has primary responsibility for ensuring compliance with federal regulations as well as monitoring of expenditures, timely correction of errors and proper allocation of expenses.
Assist PIs in the timely review and reconciliation of expenditures, prepare cost transfers and maintain adequate documentation of questionable costs, and ensure that all personnel engaged in the financial administration of sponsored awards are familiar with this policy; ensures that the costs transferred are allocable, allowable, and reasonable; coordinate with SPA to initiate and document cost transfers, prepare, and submit timely approved Cost Transfer Request Form when required.
Sponsored Programs Administration (SPA)
Maintains the policy and accompanying procedures for costs transfers and addresses questions regarding the policy. Grants and Contracts Associates approve cost transfers less than 90 days. The Associate Director Post Award approves cost transfers greater than 90 days. The Assistant Vice President for Research and Sponsored Programs approves cost transfers greater than 120 days.
- Policy Categories
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- Finance / Risk Management
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- Student Affairs
- Sponsored Funding/Grants and Contracts
Rebecca Hunt, Ph.D.
University Policy Librarian
Health Services Building, 226
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