Cost Transfer Requests

Policy No: 
Type of Policy: 
Effective Date: 
October 2015
Last Revised: 
October 2016
Review Date: 
October 2016
Policy Owner: 
Office of Grants and Contracts Accounting
Contact Name: 
Sandra Mason
Contact Title: 
Senior Director
Contact Email:
Reason for Policy: 

The matter of cost transfers is a sensitive issue in a university's operation of its sponsored programs and one which always receives careful scrutiny by sponsor representatives, especially federal government contracting officers and auditors. Accordingly, the following policy and implementation procedures are established pursuant to sound business practice and in order to ensure full compliance with federal regulations, contract and grant terms and other conditions concerning cost transfers for Resident Instruction (RI), Georgia Tech Professional Education (GTPE), and Enterprise Innovation Institute (EII) programs. Georgia Tech Research Institute (GTRI) has a separate policy/procedure in place that is applicable to its projects.

Policy Statement: 

Cost transfers that are required to correct errors or to achieve proper, consistent, and equitable distribution of costs to sponsored projects will be allowed, provided adequate justification for the change is furnished and necessary approvals that certify the accuracy of the charges are received. Such cost transfers should be made as soon as possible after the necessity for the transfer is recognized. A cost transfer made within 60 days after the posting date of the transaction requiring a transfer will be considered timely. In other exceptional instances, cost transfers may be required after the 60 day period identified above. For example, if costs are deemed to be unallowable by an audit of project expenditures after submission of the final reports, it will be necessary to process a cost transfer to adjust the final project costs. In such situations, it would be acceptable to process a cost transfer beyond the 60 day limit if the cost transfer request is properly supported, certified, and adequate documentation is provided that clearly demonstrates that the need for the transfer could not have been known within the acceptable time period.

The procedures included below are applicable to Non-Personal Service Cost Transfers. See Policy 3.2 “Personal Services Reporting Using the Plan Confirmation System” for specific procedures related to retroactive salary distribution changes.

All employees engaging in sponsored research activity.
Policy Terms: 

Cost Transfer
For the purpose of this policy, a cost transfer involves action in which costs are moved from a non-sponsored project to a sponsored project or from a sponsored project to any other project. Excluded are initial transfers of charges for supplies or services from an inventory account, a cost center, or other similar operations in accordance with established accounting procedures. Also excluded are corrections of processing errors that occur within the Business Office accounting systems such that when the correction is made, the accounting records are in agreement with the documentation that authorized the change. Corrections of encumbrances are not considered cost transfers, and any such changes are to be processed according to Procurement and Business Services Office procedures.

Electronic Cost Transfer (ECT)
Electronic Cost Transfer refers to an online system that takes advantage of the features of the Institute’s Financial System to automate the cost transfer process.


Non-Personal Service Cost Transfers
Georgia Tech authorizes the principal investigator (PI) and the properly authorized unit designee (financial manager and staff) to have primary responsibility for the management of sponsored agreement funds. The actions of these authorized individuals are documented using manual/electronic signatures and/or a system password.

All requests for a non-personal service cost transfer should originate with the department that originally approved the charge. The request will require adequate supporting statements that clearly indicate that the costs being moved to a project are directly related to the project scope, allowable by the project budget, and have been incurred in a timely manner to benefit project activities. In this regard, it must be recognized that justification must always consist of more than a simple statement such as "to correct an error" or "purchases posted to the wrong project number." While such statements may be correct, justification must be considered adequate to convince a sponsor or auditor of the accuracy of the charge to the sponsored project. The review of these transactions will usually occur no earlier than eighteen months after its occurrence, and no information will be available to substantiate the charge except that provided by the transfer request and the supporting documentation. The designated financial administrator or other responsible party with first-hand knowledge, according to delegated authority within the department, must certify as to the accuracy of the cost transfer.

Electronic Cost Transfer System
The preferred way to make a cost transfer of non-personal service expenditures is to utilize the Electronic Cost Transfer (ECT) process to decrease the amount of time required to make corrections to Institute financial records and eliminate duplicate data entry. The ECT system uses existing system features to automate edit and review procedures that are manually performed during the approval process for a paper-based cost transfer request. The ECT procedures incorporate training, maintenance of acceptable documentation, second-tier approval where required, and compliance review features to meet Institute and federal cost accounting standards.

A potential ECT system user must submit an executed Authorization to Prepare and Submit Electronic Cost Transfers form that is approved by the appropriate unit head. This form includes the user’s acceptance of specific conditions relative to compliance with the system requirements. Also prior to taking the training, the user must complete two (2) pre-requisite financial system classes and be appointed at the Accountant III level (JCCS level 7) and higher to demonstrate an adequate level of understanding of the Institute financial policies. Following the training class, the participant must pass an examination that tests the users understanding of cost transfer procedures, use of the system, and requirements for maintenance of records.

All transactions submitted through the ECT system are subject to routine compliance testing to confirm the accuracy and acceptability of completed transactions, and the maintenance of required supporting documentation. Failure to comply with the required procedures warrants additional training and testing; further failure to comply results in the user’s access being revoked.

The ECT system data entry screens mimic those elements found on the Cost Transfer Request form outlined elsewhere and below under the Forms/Links heading. System edits have been incorporated into the ECT system. The following statements must be true for an ECT entry to be accepted and processed:

  • Projects and accounts are both active in current FY Chart of Accounts
  • Accounts are not for Personal Services or Indirect (F&A) expenses
  • Project receiving the charge has budgeted available funds greater that the transfer amount. Please note, encumbrances are not considered available funds
  • Original posting dates for charges being moved are within the current fiscal year and within 90 days
  • “From” and “To” Projects are within the same unit

In many cases the corrections are updated overnight, provided the correction meets the following additional edits:

  • Total charges transferred to any one project must be less than $5,000
  • Original posting date must be less than or equal to 60 days prior to original entry date
  • Account fields do not change between the “From” panel and the “To” panel
  • Equipment tag number (if required) does not change between the “From” panel and the “To” panel
  • Project has not reached term date
  • Account fields do not include Student Aid accounts

Acceptable ECT entries that do not meet these edits are automatically forwarded to the Grants & Contracts Accounting Office for further review prior to acceptance and posting. In most instances, these entries are reviewed and approved on the same business day and subsequently posted to the Institute financial records the next day. If additional information or supporting documentation is required, the user will be notified. If action cannot be taken or requested supporting documentation is not received in within two weeks, the ECT will be canceled.

Cost Transfer Request
A paper-based request for a non-personal service cost transfer involving sponsored projects must be submitted to the Grants & Contracts Accounting Office, who may approve the cost transfer based on review of the proper authorization, accuracy of the accounting, and adequacy of the supporting documentation.

Approved cost transfers involving Operating Supplies and Expenses, Travel, Equipment, Capital Outlay, or Other Direct Expenses will be accomplished in the General Ledger system by journal entry, with the Cost Transfer Form supporting the reasons for the transfer(s). Adequate supporting documentation must be attached to the Cost Transfer Request Form.

In addition to the existing approval procedures, quarterly compliance tests are performed on a random basis to test the accuracy of all sponsored project financial transactions to identify areas of weakness.

Non-Personal Service Cost Transfers Requiring Special Documentation
There are many types of cost transfer situations that may look questionable solely on the basis of timing, the net effect on the project budget, or the type of expense being moved. Accordingly, a valid and complete explanation is required that clearly indicates that the costs being moved to a project are directly related to the project scope, are allowable by the project budget, are allowable by the terms and conditions of the award, and the expense is required to complete the objectives of the sponsored agreement. In addition, any available supporting documentation should be attached to either the ECT or Cost Transfer Request so that it will be available for subsequent audit review.

Examples of cost transfer situations that require special documentation include:

  1. A transfer that moves charges from an over expended project to a project with a free balance.
  2. A transfer which moves charges to an active project when they have been posted to a project after its termination date.
  3. A transfer that moves equipment charges to a project with a free balance within 90 days of termination.
  4. A transfer which moves substantial charges from one project to another project which is about to terminate and which has available uncommitted funds which will be lost if not expended.
  5. A transfer from a sponsored project to an indirect expense account. (Note: An overrun on a sponsored project may not be transferred to an indirect expense account.)

At a minimum, supporting documentation means that a copy of some form of original documentation will be provided. The following examples are provided to assist in this regard:

  1. Equipment Purchases
    To support a request to transfer the cost of an equipment purchase, a copy of the project budget that includes a description of equipment to be purchased and a copy of an invoice for the purchase of the equipment that matches the equipment description in the budget should be included. If the purchased equipment does not exactly match the item included in the budget, a written statement from the Project Director may be required indicating that a substitution was made and the new equipment item serves the same purpose as that included in the original proposal. Please note that in this example, what is required to support the cost transfer includes copies of the invoice, and the written statement signed by the Project Director. A valid GIT Tag number is also required for all equipment cost transfers, including fabricated equipment.

    Note: An equipment cost transfer with supporting documentation that consists of a statement prepared by the fiscal officer of a department indicating that the Project Director told the fiscal officer that the equipment should have been charged to the receiving project, without copies of supporting documentation as described above, would not be considered adequate supporting documentation.
  2. Travel Expenses
    To support a request to transfer the cost of travel to a conference, a copy of the travel authorization indicating the itinerary and purpose of the trip, a statement from the project agreement or proposal, and/or a written statement from the Project Director or Conference program indicating that the trip and conference benefited the project being charged must be included. Please note that in this example, what is required to support the cost transfer includes the original travel authorization, and/or expense statement, and the written statement signed by the Project Director. A valid Employee ID is also required for all travel cost transfers.
  3. Over-Expended Budgets
    Policies and procedures also require special documentation for cost transfers that change the costs of projects after termination or when the project budget is over-expended. This special attention is needed at the time the cost transfer is requested to make sure that appropriate consideration is given to the adjustments before any changes are made to financial records that have previously been certified to be correct. Since (in most instances) certifications have been made that the charges were correct, billed, and funds were collected based on prior accounting records, proper documentation must be available to indicate that an honest error did occur or specific conditions have changed to demonstrate that the Institute has not fraudulently billed and collected funds from a federal agency or other sponsor.

Non-Personal Service Cost Transfers Requiring Special Approval Authorization
All cost transfers are to be processed in a timely manner and properly documented. Cost transfers to externally-funded** sponsored funds beyond 90days of the original expense posting will not be allowed under normal circumstances. The Electronic Cost Transfer system will not process entries involving charges that originated more than 90days prior to the current date. To process a cost transfer more than 90 days from the original expense posting, please prepare a paper-based Cost Transfer Request form.

Provisions for exceptions to the 90 day limit will be considered as follows:

  1. In situations where initial or continuing sponsor funding is delayed beyond 90 days after the effective date, consideration for recognition of cost transfers beyond the limit will be addressed by the Grants & Contracts Accounting Office if the transfer is requested within the reporting period of the sponsored project (typically 60-90 days after the expiration date of the project). If the terms and conditions of the sponsored agreement provide for acceptance and payment of the expenses covered by the proposed cost transfer and appropriate supporting documentation is provided, the Senior Director of Grants & Contracts Accounting may approve the proposed transfer. Other exceptions will be considered on a case-by-case basis.
  2. Upon approval from the Senior Director of Grants & Contracts Accounting, Associate Vice President for Financial Services, and Vice President for Research, such entries will be recorded.

** Excludes sponsored projects funded by the Georgia Tech Foundation and Georgia Tech Research Corporation. Transfers between projects associated with the same sponsored fund (award) are not subject to the 90 day limitation.

Personal Service Cost Transfers
Current fiscal year cost transfers of Personal Services expenses are to be processed using the Salary Planning and Distribution (SPD) System. See Policy 3.2 “Personal Services Reporting Using the Plan Confirmation System” for specific requirements.

Prior fiscal year cost transfer requests must include a revised Annual Statement of Reasonableness (ASR) for each employee whose personal service costs are requested to be moved. Revised ASRs must be signed and dated by the employee and/or supervisor/person with first-hand knowledge. Changes to the distribution of employee effort must also be initialed and dated by the employee or supervisor/person with first-hand knowledge. The unit Financial Manager should certify and date the changes by signing the form where indicated.


To obtain hard copy forms, please contact the Office of Grants & Contracts Accounting at

Frequently Asked Questions
Contact the Office of Grants and Contracts Accounting at for additional guidance related to sponsored cost transfer requests.


Principal Investigator (PI) Responsibilities
Each Georgia Tech PI is responsible for effectively overseeing and managing his/her sponsored projects based to a considerable extent upon his/her knowledge of the field of study and his/her capabilities to conduct the projects in an efficient and productive manner.

Monthly “PI Sponsored Project Review” reports are provided directly to PIs by the Office of Grants & Contracts Accounting to permit timely reviews and approval/confirmation of all charges posted to his/her assigned sponsored projects. PIs are to perform periodic reviews of these charges to provide proper financial oversight.


To report suspected instances of noncompliance with this policy, please visit Georgia Tech’s EthicsPoint, a secure and confidential reporting system, at:

Policy History: 
Revision Date Author Description
10-01-2015 Office of Grants & Contracts Accounting Updated Non-Personal Service Cost Transfers Requiring Special Approval Authorization for externally-funded Sponsored Projects from 120 days beyond the original expense posting date to 90 days aligning with close-out requirements of OMB 2 CFR 200.
11-05-2014 Office of Grants & Contracts Accounting Align with requirements of 2 CFR 200
04-01-2014 Office of Grants & Contracts Accounting Administrative review



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