Proper management of funds is essential to uphold the fiduciary responsibilities of the university. Federal agencies and other sponsors may regard the following activities as indicative of inadequate control systems:
Inappropriate transfers will result in expenditures being disallowed and/or subsequent reduction in funding by the sponsoring agency.
For further information, see 2 CFR 200, Subpart E or OMB Circular A-21.
All faculty and staff who engage in or propose to engage in sponsored projects; all federal and nonfederal sponsored projects.
It is the policy of UW–Madison that costs should be charged to the appropriate sponsored project when first incurred. There are circumstances in which it may be necessary to transfer expenditures to a sponsored project subsequent to the initial recording of the charge. Those transactions require monitoring for compliance with UW policy, federal regulations, sponsor-specific guidelines, and the cost principles that underlie fiscal activities on sponsored projects.
When the UW accepts federal research funding, it must comply with the allowability and allocability requirements of the Federal Cost Principles and the Uniform Administrative Requirements. To comply with the allowability and allocability requirements, it is necessary to explain and justify transfers of charges onto federal and non-federal sponsored projects from other federal or non-federal projects. The cost principles prohibit the use of cost transfers for the purpose of “convenience,” including a transfer largely for the purpose of using unexpended funds on an award that is ending. Timeliness and completeness of transfers and the accompanying justification for the transfers are important factors in supporting allowability, allocability, and cost compliance.
In order to maintain consistency in the treatment of cost transfers, the UW’s policy on cost transfers applies to all federal and non-federal sponsored projects. Under the UW’s cost-transfer policy, all transfers must be submitted within 90 calendar days of the end of the month in which the expense is posted. When transfers are not adequately justified or are made for inappropriate reasons, the department is responsible for transferring the expenses to a non-sponsored departmental funding source.
A cost transfer is an after-the-fact reallocation of costs, either salary or non-salary costs, to or from a sponsored project within a 90-day period from the month end of the accounting date. Funding agency requirements concerning the management of awards made to institutions such as the University of Wisconsin – Madison limit the circumstances under which cost transfers are allowed. In contrast, a re-budgeting action involves the reallocation of budgeted funds and not a transfer of expenditures.
Here are some examples of typical circumstances in which cost transfers are allowed:
A late cost transfer is an after-the-fact reallocation of costs, either salary or non-salary costs, to a sponsored project more than 90 calendar days from the month end of the accounting date.
Here are some examples of typical circumstances in which late cost transfers may not be allowed:
Salary Cost Transfers:
A salary cost transfer means the movement of payroll expenses or stipends onto a sponsored project. Payroll expenses include salary and fringe benefits.
Instructions and Examples:
Salary Cost Transfer within 90 Days
Salary Cost Transfer beyond 90 Days
Non-Salary Cost Transfers:
A non-salary cost transfer means the movement of expenditures for items other than payroll or stipends onto a sponsored project. Typical examples of non-salary costs include expenses for supplies, services, consultants, travel, and equipment.
Instructions and Examples:
Non-Salary Cost Transfer within 90 Days
Non-Salary cost Transfer beyond 90 Days
Principal Investigator/Department Designee Responsibilities:
College / School Responsibilities:
Research and Sponsored Programs Responsibilities:
Please note that the distribution of these responsibilities may vary in different areas of campus. Responsibilities may be shared or delegated differently between the respective groups depending on organizational structure and staffing at the PI/designee, college/school, and Research and Sponsored Programs Office level.
Assistance and Support
Research and Sponsored Programs is available to respond to inquiries and assist the PI or designee and College/School personnel with question regarding Cost Transfers. Your College/School’s Dean’s administrative office will also be able to provide guidance with cost transfer issues and concerns.
It is critical that all sponsored project expenditures be reviewed on a regular basis to ensure that both salary and non-salary charges are correct and appropriate. It is the responsibility of the principal investigator, and/or the PI’s designee, to authorize transactions and review the expenditure activity. This review should include the determination that the charges are reasonable, allowable, allocable, and directly support the scope of work for that project.
Typically, cost transfers are appropriate when they involve allowable direct costs of the sponsored project and the purpose is to:
Lack of Appropriateness
Inappropriate circumstances for cost transfers include, but are not limited to, the following:
Frequent, late, and inadequately explained or documented transfers raise serious questions about the appropriateness of the cost transfers and may result in audit disallowances.
Approval for late cost transfers will be granted only in extenuating circumstances.
Examples of Allowable Extenuating Circumstances:
Examples of Unallowable Circumstances for Late Cost Transfers:
Cost Transfer Request (Non-Salary) Non-Grant -- any fund except 133 and 144