16.3.1 Process Cost Transfers for Sponsored Programs
Before Beginning
Before beginning this procedure, become familiar with the policies related to this topic.
A cost transfer is a reallocation or redistribution of a previously charged expenditure transferred from one fund (C-FOAP) to another after the charge has been posted in Banner. Consult Policy Exceptions for transactions that are not considered cost transfers by the University of Illinois System.
Begin
To process cost transfers for sponsored programs:
- Determine if the transfer is allowable as outlined in Cost Transfers Principles.
- Determine if processing a current or non-current cost transfer is needed. As a reminder, cost transfers should be completed as soon as the need is detected and non-current transfers (older than 90 calendar days) should be kept to an absolute minimum. Non-current transfers require additional documentation.
Current Cost Transfers are those initiated during the accounting period in which the charges were originally recorded in Banner, or within 90 calendar days of the original transaction date in Banner.
Non-Current Cost Transfers are those processed more than 90 calendar days after the original transaction date in Banner. Non-current transfers require additional documentation (see step 4 below).
- Use either a Banner Journal Voucher (JV) or Labor Redistribution form to transfer costs:
Non-Personnel Expenses-Use Banner Journal Voucher Form FGAJVCD, FGAJVCM, or FGAJVCQ. Consult the job aid Creating a Journal Voucher with FGAJVCD and FGAJVCQ for step-by-step instructions on how to create journal vouchers. The following information should be included in the Text screen (FOATEXT):
- Explanation, including the reason for initial posting to incorrect C-FOAP, and benefit of the cost being transferred to the project
- Original date of the service or transaction
- Original transaction document number
- Preparer’s name and telephone number
- If the cost transfer is non-current see step 4 below, and
Vouchers may be rejected by sponsored programs office if sufficient documentation is not provided in the Text screen (FOATEXT).
Personnel Expenses-Use Banner Labor Redistributions Form PZAREDS. See Performing Labor Redistributions (PZAREDS) for step-by-step instructions on how to create labor redistributions. The following information should be documented and retained in the unit to support the effort charged to the project:
- Explanation, including the reason for initial posting to incorrect C-FOAP, and benefit of the cost being transferred to the project
- Date when the effort was provided, the individual’s name and UIN, and pay period code
- Contact information for individual requesting the transfer
- For current transfers, skip to step 5. For non-current transfers (both non-personnel and personnel transfers), complete a Form GC81: Cost Transfer Justification For Sponsored Projects:
- Have the principal investigator (PI) sign the form to confirm that the charges are allowable, proper, and approved by them. If the PI is not available, someone at a higher level, such as a unit (or department) head, dean, or director who:
- Personnel Expenses (labor redistribution records)—Keep the Form GC81: Cost Transfer Justification For Sponsored Projects with your copy of the labor redistribution records in the unit
- Retain copies of supporting documentation for all cost transfers in the unit:
- Journal voucher or labor redistribution transferring the costs
- Documentation for the original expenditure being transferred, including but not limited to vendor (original) receipts or invoices, or internal university service-unit billings
- Authorization to initiate the cost transfer and any related correspondence documenting the need and justification for the cost transfer; authorization should be from the PI or from the responsible business person for the department
- Form GC81: Cost Transfer Justification For Sponsored Projects for non-current transfers
The documentation for cost transfers must be retained for the period stipulated in the record retention schedule and be made available for verification during the course of an audit or other review. If a cost transfer does not have adequate supporting documentation, it may be deemed unallowable by the sponsor, auditors, or the applicable university sponsored programs office. If that happens, the unit is responsible for covering the unallowable costs with unrestricted funds from sources such as an indirect cost recovery (ICR) fund or a gift fund.
- If the expenditures being transferred or redistributed were previously confirmed (UIUC and UIS) or certified (UIC):
UIUC and UIS—The unit confirmation contact may be required to submit a request for an updated semi-annual confirmation report (reconfirmation) through the Semi-annual Expenditure Confirmations system.
UIC—If the personnel expenditures being transferred were previously certified during the annual effort certification process, the unit business manager should contact the sponsored programs office for guidance.
Forms Used in this Procedure
Form GC81: Cost Transfer Justification For Sponsored Programs
Additional Resources
Journal Voucher Processing (GL 101)
Labor Redistribution (PR 130)
U.S. Office of Management and Budget (OMB) Circular A-21, 2 CFR, Part 220
U.S. Office of Management and Budget (OMB) Circular A-110, 2 CFR, Part 215
CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Semi-annual Expenditure Confirmations
Effort Reporting System
First Published: March 2021 | Last Updated: March 2024 | Last Reviewed: March 2024