San Francisco State University
Office of Research and Sponsored Programs
Cost Transfer External Procedure
Purpose:
A cost transfer is any adjustment of expenditures to a sponsored project to align costs with the actual
benefit received on the sponsored project. The purpose of this procedure is for San Francisco State
University (SFSU) to establish guidelines for when it is appropriate to request a cost transfer, and to
identify the allowable mechanism to do so for both personnel and non-personnel costs.
SFSU Procedure and External Regulations:
Federal regulations recognize that the Principal investigator is ultimately responsible for ensuring
that all original transactions are accurately and appropriately charged to the correct project based on
the benefit received on the project. Therefore, the request for a cost transfer should only be required
in rare circumstances.
OMB Circular A-21, Principles for Determining Costs Applicable to Grants, Contracts, and Other
Agreements with Educational Institutions, Section (C)(4)(b) states “Any costs allocable to a
particular sponsored agreement under the standards provided in this Circular may not be shifted to
other sponsored agreements in order to meet deficiencies caused by overruns or other fund
considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for
other reasons of convenience.” SFSU will not allow cost transfers made for these purposes, but
recognizes that there will be certain circumstances when cost transfers must be done to correct
charges on sponsored projects.
OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals and Other Non-Profit Organizations prescribe that every
institution in receipt of federal funds maintain adequate financial management systems. The purpose
of a financial management system is to facilitate programmatic decision-making.
The government also requires that cost transfers be done timely. Several government agencies, such
as National Institutes of Health (NIH), define this as within 90 days after the original transaction date
and SFSU has adopted this guideline for timeliness.
This procedure is not applicable to the following:
1. Transfers made to and from projects due to central administrative processing errors, e.g. a
data entry error.
2. Transfers made between expense accounts on the same sponsored project.
3. Transfers made to a non-sponsored project to remove a deficit from a sponsored project.
Adherence to this procedure is necessary, as inappropriate or poorly documented cost transfers can
result in federal regulators denying reimbursement of these questionable charges or imposing other
sanctions on SFSU, such as fines or loss of certain authorities.
Procedure Details and Definitions:
Cost Transfer
A cost transfer is any adjustment of expenditures to a sponsored project to align costs with the actual
benefit received on the project.
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San Francisco State University
Office of Research and Sponsored Programs
Cost Transfer External Procedure
Personnel Costs
Personnel costs are salaries, wages, and associated fringe benefits costs for SFSU employees.
Non-personnel Costs
Non-personnel costs are operating costs that include but are not limited to supplies, equipment, and
travel.
Sponsored Project
Money received by SFSU for a specific purpose that may only be spent in accordance with the
guidelines of the sponsoring agency. For purposes of this procedure, SFSU defines a sponsored
project as any grant, contract, or other agreement between SFSU and the federal government or other
grantor agency. This does not include donations or gifts from individuals or corporations.
At SFSU, revenue and expenses for sponsored projects are tracked as separate cost centers and are
assigned a project number in PeopleSoft between 10-000-00-0 and 69-999-99-9.
Non-sponsored Projects
Non-sponsored projects are projects that are not included in the above definition for sponsored
projects. At SFSU, these would be projects assigned outside the PeopleSoft range of 10-000-00-0
and 69-999-99-9.
Procedure:
Requesting a Personnel Cost Transfer:
As defined above in this procedure, a cost transfer is any adjustment of expenditures to a sponsored
project to align costs with the actual benefit received on the project. The following procedure should
be used when requesting a cost transfer to a sponsored project for personnel costs.
To initiate a personnel cost transfer request to a sponsored project, complete a Labor Cost
Distribution (LCD) form. The submitter should ensure that requests:
1. Are submitted to ORSP within 90 days of original transaction,
2. Identify a specific time period and percent of time to be transferred, and ensure that any costs
being transferred to a sponsored project are compliant with the Direct and Indirect Cost
Charging Procedure .
3. Include appropriate justification on a LCD form for the change (see the Written Justification
for Cost Transfers section below).
The only acceptable reason for transferring personnel costs to and from sponsored projects is to align
the costs with the actual effort devoted to the project and the effort certification. During the Effort
Certification Process salary charged to sponsored projects will be reviewed for accuracy. If the
actual effort committed for the period differs from the report, the report should be updated and
signed and the appropriate LCD form and Cost Transfer should be completed.
Cost transfers affecting effort certification should not be made after the effort has been certified, i.e.
after the certification report has been signed and sent to the Office of Research and Sponsored
Programs (ORSP). Any exceptions will need to be approved by ORSP and a revised effort
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San Francisco State University
Office of Research and Sponsored Programs
Cost Transfer External Procedure
certification will be required. Personnel cost transfers should not be requested to cover a deficit on
another sponsored project or to transfer costs to spend a remaining balance of a sponsored project.
The completed LCD form should be sent to ORSP for processing. ORSP will review and approve all
cost transfer requests and review them for consistency with sponsor guidelines and SFSU policies
and procedures. If the cost transfer is not appropriate, it will be returned to the submitter indicating
the reason and where additional information is necessary. If approved, the salary transfer will be
processed.
Requesting a Non-personnel Cost Transfer:
As defined above in this procedure, a cost transfer is any adjustment of expenditures to a sponsored
project to align costs with the actual benefit received on the project. The following procedure should
be used when requesting a cost transfer to a sponsored project for non-personnel costs.
To initiate a non-personnel cost transfer request to a sponsored project, complete a Cost Transfer
Request form. The submitter should ensure that requests:
1. Are within 90 days of original transaction.
2. Identify a specific expense to be transferred, and ensure that any costs being transferred to a
sponsored project are compliant with the Direct and Indirect Charging Procedure.
3. Include a justification on a Cost Transfer Request form for the change.
The following illustrates acceptable and unacceptable reasons to request a non-personnel cost
transfer. These should not be used as justifications for cost transfers (see the next section for further
guidance).
Acceptable Reasons for a Cost Transfer
1. To correct a departmental clerical or bookkeeping error on the original transaction forms
such as a transposition of numbers.
2. To transfer sponsor approved pre-award costs charged to a department discretionary account
prior to the establishment of a sponsored project account (pre-award spending).
3. To move expenses charged to a department discretionary account to a sponsored project
account created after the budget start date (expenses charged to wrong account).
Unacceptable Reasons for a Cost Transfer
1. To transfer costs from a sponsored project in deficit to another sponsored project.
2. To transfer costs to a sponsored project to spend the remaining funds.
The completed Cost Transfer form should be sent to ORSP for processing. ORSP will review and
approve all cost transfer requests and ensure that they are compliant with the guidelines established
with SFSU policies and procedures. If the cost transfer is not appropriate, it will be returned to the
submitter indicating the reason and where additional information is necessary. If approved, the cost
transfer will be made.
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San Francisco State University
Office of Research and Sponsored Programs
Cost Transfer External Procedure
Written Justifications for Cost Transfers:
Since the federal regulations assume that cost transfers are exceptions, it is imperative to
appropriately justify in writing (1) the reason why the cost was not charged to the correct project and
(2) how it benefits the project to be charged. This justification should be documented on the Cost
Transfer form and will serve as an audit source document.
The following are examples of inappropriate justifications:
1. Simply stating, “To correct an error.”
2. Charged a sponsored project for a bulk purchase and are moving costs to the appropriate
sponsored projects.
3. Charged another sponsored project in anticipation of future funding
4. To move costs to a sponsored project with available budget.
Exceptions – Late Cost Transfers:
Cost Transfers should be completed within 90 days of the original transaction. In extremely rare
circumstances, a cost may have been charged to the incorrect sponsored project and the error was not
identified within the 90 days. In these cases, adequate justification on the Cost Transfer form must
be completed and signed by the Director of ORSP. The justification must include a detailed
explanation for why the error was not corrected in a timely manner.
The completed form should be sent to ORSP for processing. ORSP will review and approve all cost
transfer requests and ensure that they are compliant with the guidelines established with SFSU
policies and procedures. If the cost transfer is not appropriate, it will be returned to the submitter
indicating the reason and where additional information is necessary. If approved, the cost transfer
will be processed.
Cost Transfers that are NOT approved:
If a cost transfer is not approved, the cost may be transferred to a department discretionary account,
or other designated account.
Roles and Responsibilities:
 Principal Investigator/Financial Manager: The Principal Investigator/Financial Manager is
responsible for correctly charging costs to the appropriate projects. If a change is necessary, the
Principal Investigator/Financial Manager will complete the appropriate forms as described in the
above procedure.
 Office of Research and Sponsored Programs (ORSP): ORSP will review and approve all cost
transfers. ORSP will provide guidance to the research community for interpreting and complying
with this procedure.
 Department Chair: The Department Chair is responsible for reviewing Late Cost Transfers for
accuracy.
 Director ORSP: The Director is responsible for reviewing Late Cost Transfers for
appropriateness and completeness.
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San Francisco State University
Office of Research and Sponsored Programs
Cost Transfer External Procedure
Related Policies and Procedures:
 Direct and Indirect Cost Charging Procedure
 Human Resource Guidelines
Forms and Links:
 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher
Education, Hospitals and Other Non-Profit Organizations (OMB Circular A-110)
http://www.whitehouse.gov/omb/circulars/a110/a110.html

Principles for Determining Costs Applicable to Grants, Contracts, and Other
Agreements with Educational Institutions (OMB Circular A-21)
http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html

NIH Grants Policy Statement
http://grants.nih.gov/grants/policy/nihgps_2003/index.htm
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