Cost Transfers

Overview Back to Top

  • A cost transfer is an after-the-fact reallocation of costs (either salary or non-salary) to a sponsored project within a 90-calendar day period from the accounting date.
  • Salary cost transfers involve moving payroll expenses onto or off a sponsored project. Payroll expenses include salary and fringe benefits.
  • Non-salary cost transfers involve moving expenditures for items other than payroll onto or off a sponsored project. Typical examples of non-salary costs include expenses for supplies, services, consultants, travel, and equipment.
  • It is the policy of the University of Wisconsin – 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.

GuidelinesBack to Top

  • Cost transfers should be processed immediately after an error is identified; transfers must take place no later than 90 days after the end of the month of the original transaction.
  • Transfers made after 90 days raise questions concerning the validity of the transfer. Requests for transfers made after 90 days will be considered only under extenuating circumstances.
  • Non-salary cost transfers moving expenses off or onto a sponsored project require purchase documentation to be attached.
  • Frequent cost transfers, late cost transfers, and inadequately documented or justified transfers (especially involving projects with overdrafts or unexpended balances) may be regarded by sponsors as indicators of inadequate control systems. Cost transfers are also targets for audits, which can lead to disallowances or penalties.


  • Charge expenditures to the correct fund.
  • Correct errors as soon as detected and monitor monthly
  • Request Advance Account Numbers for pending awards.
  • Split allocable costs across multiple sponsored projects consistently
  • Provide clear, detailed justification statements.
  • Perform ProCard edits in a timely manner.
  • Carefully prepare paperwork – errors in account numbers, reference numbers, amounts, etc., will only delay transactions.
  • Reconcile expenditure postings monthly, especially salary postings


  • Use federal projects as defaults for procard purchasing system (PVS Net). Instead use unrestricted funding.
  • Park costs for pending projects on other sponsored projects
  • Transfer costs from one sponsored project to another to eliminate a deficit
  • Apply all costs on one grant and then move some to another. If the costs are to be shared between related grants, costs should be split-coded at time of purchase whenever possible.

Cost Transfer Request ProcessBack to Top

  • Cost Transfer Tool
  • Justification
    • Cost transfers need to clearly explain the reason why the expense was originally charge to one funding source and then being moved. To support the move to the new sponsored project, the benefit to that project should be stated.
    • Write justifications in such a way that a non-UW person or non-department person can clearly understand the need to move the expense from one project to another without having to follow-up with questions.
    • Should never state “to clear overdraft”, “to spend down”, or only “to fix error”.
    • Cost transfers requested by RSP or CALS still need a justification. A justification stating, “Cost transfer requested by RSP” would still the need the reason explained.
    • Expenses being moved after 90 days require 90 day justifications.
  • Documentation
    • For non- salary cost transfers, purchase documentation is required when sponsored projects are involved regardless if the expense is being moved on or off the sponsored grant.
    • Support documentation needs to show purchase date, what was purchased, quantity and price.
    • Examples of documentation:
      • Invoice copies
      • Pro-card receipts
      • Approved e-reimbursement report or pertaining travel receipts
      • Shop@UW invoices or statements
  • Cross College or Department Cost Transfers
    • Communicate and seek necessary approvals from outside departments for the transfer.
      • PI approval doesn’t mean a department representative was aware of the transfer.
      • Departmental approvals need to be entered as a comment either in the details of transfer or a comment.
  • Salary Cost Transfers
    • Communicate salary changes ALWAYS to the Departmental Effort Coordinator. The coordinator may have to return an effort card the certifier depending on the timing.
    • Reconcile salary cost transfers ALWAYS. Information is manual entered to HRS as a direct retro and keying errors can happen.

ResourcesBack to Top

If you have any questions regarding Cost Transfers on sponsored projects, contact a CALS Business Accountant.

Comments are closed.