Office of Sponsored Programs - 500.20 - Cost Transfers


Office of Sponsored Programs - 500.20 - Cost Transfers


The purpose of this standard is to provide guidance on the treatment of cost transfers and document Federal and University expectations. The University has stewardship responsibility for all sponsored funds and proper management of sponsored project expenditures is essential to meet this obligation. The University recognizes that cost transfers may be necessary to correct bookkeeping or clerical errors and to allocate closely related work that may support more than one project.

Frequent, late, and inadequately explained transfers raise serious questions about the propriety of the transfers and call internal fiduciary controls into question. This is especially the case with transfers that involve projects with cost overruns or unexpended balances. These activities may result in audit disallowances and monetary paybacks, including penalties and fines.

The University is committed to ensuring that all cost transfers, including labor distribution adjustments and non-salary journal entries, are appropriate and conducted in accordance with sponsor terms and conditions, Federal regulations, and University policy. The following is the operating standard regarding cost transfers associated with sponsored projects.

Policy Statement

I. Time Frame for Cost Transfers

  • Non-Salary cost transfers: must be prepared and submitted within 90 days from the date the transaction is charged to the project.
  • Salary cost transfers: related to the effort certification process, to allow reconciliation of the salary expenditures to the individual's certified effort, must be prepared and submitted within 30 days after the end of the effort certification period.

University policy does not supersede sponsors’ policies that require a shorter period for cost transfers and/or corrections to effort.

  • The Office of Sponsored Programs (OSP) expects that all costs directly charged to Federally sponsored awards will comply with the cost principles outlined in Uniform Guidance 2 CFR Part §200, Subpart E.
  • Cost transfers are allowable only where there is a direct benefit to the project being charged. Under no circumstances would it be acceptable for a cost to be charged to a project that it does not benefit. This practice is inconsistent with applicable cost principles and will result in improper financial reporting and inappropriate reimbursement from the sponsor.
  • All Principal Investigators (PIs) and their Department Administrators (DAs) are responsible for ensuring that cost transfers to correct errors on sponsored projects are made within the time frames outlined in this operating standard.
  • Any cost transfers submitted after the applicable time frame identified in this operating standard will require review by OSP. Approval for such cost transfers will be granted only under extenuating circumstances. Additional documentation and justification must accompany a cost transfer request outside the applicable period.
  • Cost transfers to remove charges that do not meet the cost principles outlined in Uniform Guidance 2 CFR Part §200, Subpart E must be completed regardless of time frame.
  • Cost transfers must be supported by documentation which contains a justification of why the error occurred, how the expense relates to the project being charged, and a plan to prevent similar errors in the future.
  • Cost transfers are not to be used as a means of award management.

II. Roles and Responsibilities

PI and Delegated Personnel Responsibility

  • Reviewing and reconciling sponsored projects on a regular basis (at least monthly) to ensure that all expenditures are correct and appropriate
  • Managing projects effectively to minimize the need for cost transfers
  • Submitting and approving cost transfers in compliance with this operating standard and associated procedures
  • Retaining all supporting documentation of the cost transfer in accordance with applicable record retention requirements
  • Ensuring that all personnel engaged in the financial administration of Federally funded projects are familiar with this operating standard and procedure

OSP Responsibility

  • Developing and implementing cost transfer procedures in accordance with Federal regulations
  • Assisting in interpretation and implementation of this operating standard
  • Providing training to campus on this operating standard
  • Providing final approval for cost transfers greater than 90 days from the accounting date of the original transaction
  • Periodically reviewing cost transfers to ensure compliance with University and Federal regulations

Internal Audit Responsibility

  • Independently evaluating compliance with this operating standard and associated cost transfer procedures


Allocable: Costs that benefit the award charged. Costs shared by more than one project should be allocated in proportions that can be approximated with a high degree of accuracy through actual use.

Allowable: Costs allowable under the terms and conditions of the award, including the authorized budget and applicable regulations.

Consistent: Application of the cost is given consistent treatment within established University policies and procedures; costs for the same purpose are treated and classified the same way under like circumstances.

Cost Transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project within 90 calendar days from the original accounting date.

Late cost transfer: An after-the-fact reallocation of costs, either salary or non-salary, to a sponsored project greater than 90 calendar days from the original accounting date.

Original Charge: The first posting of a cost to the general ledger.

Reasonable: The nature of the goods or services acquired, and the amount paid to reflect the action that a prudent person would have taken at the time the decision to incur the cost was made.

Related Requirements

Unit Policies, Standards, & Procedures

Contact Information

For questions regarding this operating standard and its related procedure, please contact

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSP Staff assignments are found in RAMSeS or on the OSP website.


History Table
Date Revision
07/01/2022 Revised to reflect new office name.
05/15/2018 Revised to coincide with the release of the new OSP Website.
12/01/2017 Revised operating standard to clarify expectations on timely cost transfers.

The operating standards in the Office of Sponsored Programs Operating Standards & Procedures Manual supersede any OSP operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Article ID: 132324
Thu 4/8/21 9:28 PM
Fri 1/19/24 12:13 PM
Responsible Unit
School, Department, or other organizational unit issuing this document.
Research-Office of Sponsored Programs
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Vice Chancellor
Next Review
Date on which the next document review is due.
01/19/2025 12:00 AM
Last Review
Date on which the most recent document review was completed.
01/19/2024 12:00 AM
Last Revised
Date on which the most recent changes to this document were approved.
07/01/2022 12:00 AM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
07/01/2022 12:00 AM
Date on which the original version of this document was first made official.
07/01/2008 12:00 AM