Cost Transfer Three Months After the Period of Performance
A departmental accountant submits a cost transfer moving $42,000 of laboratory supplies from a departmental unrestricted account to a federal award. The charge originally posted 95 days after the award's period of performance ended. The justification says the supplies were 'generally related to the project.' The institution's policy requires cost transfers within 90 days of the original charge and prohibits transfers after the award ends without sponsor approval. The award has a 60-day closeout window remaining. The PI is traveling and has not signed the transfer. The supplies were received during the project period but were stored in a shared lab used by three projects.
1. Should this transfer be approved? Analyze against allowability and the institution's policy.
Read the worked answer
As submitted, the transfer should not be approved. Three problems stand out. First, it exceeds the institution's 90-day window and occurs after the period of performance, so it requires sponsor approval that has not been obtained. Second, the justification 'generally related to the project' is insufficient; the transfer must demonstrate that the cost is allocable and that the original charge was an error. Third, the shared-lab use raises an allocability question: supplies used across three projects must be allocated on a reasonable, documented basis, not charged entirely to one award.
A defensible path: obtain itemized receipts and usage records, determine the allocable share to the federal award, prepare a corrected justification identifying the error and the benefit to the award, secure PI signature, and seek sponsor approval if the transfer is otherwise permissible. If the allocable share is small or unsupported, leave the cost in the departmental account.
2. What documentation and approvals would make a revised transfer acceptable, and what are the risks of processing it as-is?
Read the worked answer
A revised transfer needs: a detailed explanation of why the original charge was made to the wrong account; evidence the cost benefited the federal award during the period of performance; a documented allocation method if supplies were shared; PI certification of the allocability; departmental and central office approvals per policy; and, because it is outside the window, written sponsor approval if required.
Processing as-is risks disallowance of $42,000, a finding in a federal audit, repayment, and reputational harm. Cost transfers near or after the end of an award receive heightened scrutiny because they can shift overruns onto the sponsor. The 60-day closeout window is not a reason to rush an unsupported transfer; a late, well-documented transfer with sponsor approval is far safer than a timely, unsupported one.