Cost Transfers

I. POLICY AND GENERAL STATEMENT

It is the policy of The University of Texas Health Science Center at Houston ("university") to assure that all expenditures are accurately reflected in the accounting records. To accomplish this, cost transfers may be necessary to move expenses to or from an account. The purpose of this policy is to establish appropriate guidelines for processing cost transfers.

II. PROCEDURE

A cost transfer is defined as “moving a posted expense from one account to another after the expense was initially recorded and posted in the financial accounting system.”  This may be necessary to correct an error, to move or split costs into accounts that did not exist when the original transaction was made, or for other reasons associated with a department’s fiscal operation.  Transfers should be the exception, not the rule.  Cost transfers are requested on a Cost Transfer Request and must meet the guidelines for allowability, allocability, reasonableness, and consistency.  More stringent criteria apply for cost transfers to be allowable on federally funded projects. 

Principal investigators and designated research faculty and staff are responsible for reviewing expenditures for allowability and allocability and to identify errors and omissions for resolution in a timely manner.

All cost transfers must be:

• The transfer must be recorded in the general ledger within ninety (90) days from the close of the month in which the original charge posted or within forty-five (45) days after the end date of the award and cannot cross fiscal years.
• Fully explained and justified. The reason why the original charge was incorrect and why the charge is allowable and allocable to the new account must be documented.  An explanation that states that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient.
• Fully documented. The transfer transaction must contain a reference to the invoice, payroll, or other disbursement document(s) that were the basis of the original direct charge.

A high frequency of cost transfers can imply that financial transactions are not being properly reviewed and recorded when originally incurred.  For this reason, cost transfers are highly scrutinized by auditors to determine the reason for the correction and the allowability of the charge to the project.

For definitions and detailed information on cost transfers for all types of expenditures, refer to the Sponsored Projects Administration (SPA) website. 

For payroll expenditures, the System Data Resource Team (“SDR”) will process the approved cost transfers after a retroactive personnel action request is entered into the system with an approved Cost Transfer Request attached.

For non-payroll expenditures on sponsored projects, the Post Award Finance Team ("PAF") will process approved cost transfers.

For all other expenses, General Accounting will process the approved cost transfers.

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III. CONTACTS

• • Post Award Finance
  • 713-500-4940
  • [email protected]
  • https://www.uth.edu/sponsored-projects-administration/
• • System Data Resources Team
  • 713-500-3530
  • [email protected]
  • https://inside.uth.edu/finance/system-data-resources/
• • General Accounting
  • 713-500-4925
  • [email protected]
  • https://inside.uth.edu/finance/general-accounting

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