Cost Transfer Definition
A cost transfer is the assignment of an expense or expenditure (charge) to a federally or non-federally funded chart string that was initially recorded in another chart string.
To comply with Uniform Guidance Cost Principles and Northwestern’s Cost Transfers to Sponsored Projects Policy, explanation/justification must be provided for every cost transfer request (regardless of dollar amount). In addition, submission of additional supporting documentation may be required by approvers for both non-salary and salary cost transfers. Items which may be requested include, but are not limited to, the examples below.
Preparer (Business, Financial, Department, or Research Administrator), PI, and School Dean’s Office (Level 3 Approver) approvals are required on cost transfers requested more than 90 calendar days after the original transaction. If the request is less than 90 days, only Administrator and Dean’s Office approval(s) are required.
The individual who prepares the cost transfer request must not be the same individual who approves it.
Non-Salary Cost Transfer (NU Financials Actuals Journal)
Processing Instructions & Workflow
- Previous Transaction Numbers/Dates
- Purchase Orders
- Balance Statements
- Completed Over 90 Day Rule Justification Memo, if applicable, signatures must be obtained from the Preparer, PI, and Dean's Office before uploading to the journal submission in NUPortal
Salary Cost Transfer (myHR Journal)
Processing Instructions and Workflow - Under 90 Days
Processing Instructions and Workflow - Over 90 Days
*Typically required for over 90 day journals only
- Completed Over 90 Day Rule Justification Memo, if applicable; PI approval(s) must be obtained before uploading to the journal submission in myHR. Dean's Office signature is not required for over 90 day journals entered online, as their approval is included in the online workflow. Transactions ineligible for online entry (transfers over 12 months old; transfers between a payroll [6xxxx] and stipend [78xxx] account code; temp employee journal over 90 days old; emeritus funding changes) cannot be entered online, and should be routed via the Interim Email Routing and Approval Procedure.
- Certified Effort if applicable/available
- For exempt employees, if sponsored accounts are impacted+ the reporting period is open in the Effort Reporting System (ERS) and the requested completion date has passed (per the period's communication and monitoring timeline), a certified effort report is required, and must be verified before submitting a journal.
- The net pay percent (current charges + requested journal) typically should not exceed the certified percent.
- School Deans Offices may require additional documentation
Over 90 Day Salary Cost Transfer Procedures & Best Practice Guides are available on the Office of Cost Studies Website.
Cost Transfer Red Flags
Certain elements associated with cost transfers may result in heightened audit risk to the University, and should be avoided. Examples include:
- Transfers to or between sponsored projects
- Transfers older than 90 days after the original transaction date
- Transfers in the last month of the award or after the award has ended
- Large numbers of cost transfers (relating to a particular department or sponsored project)
- Grants or contracts with a zero balance at the end of the award
- Round numbers (may be an indicator of an estimated number)
- Paying summer salary late
- Labor distribution adjustments to previously certified effort
- Transfers without a full explanation and/or “cookie cutter” explanations
- Transfers among “closely related” projects