yellow flowers in the foreground with Missoula and the sun shining brightly through clouds

Office of Sponsored Programs

Cost Transfers and Journal Vouchers

Cost transfers and journal vouchers are used to correct errors on sponsored awards to ensure costs are allowable, allocable, reasonable, and treated consistently. These rules apply to all sponsored awards, regardless of funding source.  

Federal, state, and private agency regulations govern allocable costs, and cost transfers are increasingly stringent. These requirements are outlined in 2 CFR 200.405. To ensure consistent stewardship of restricted funds, these principles apply to all sponsored awards, regardless of funding sources.  

The University is responsible for the proper stewardship of sponsored funds, and these cost-allocation correction guidelines will be applied consistently across all sponsored awards. 

Which Process to use

  • COST TRANSFER is required to: 
    • Correct an error on a grant account, whether the cost is being moved on or off the grant, regardless of funding source. 
    • Correct payroll costs on a grant account. 
    • Transfer a procard charge from the default index code that is 90 days old or older. 
  • JOURNAL VOUCHER is required to: 
    • Transfer charges from a procard default account to the correct grant account if less than 90 days. 
    • Reclassify costs between account codes within the same index code. 
    • Charge a sponsored award from an approved recharge center. 

Cost Transfer Process

  1. Complete the Cost Transfer Request or Payroll Cost Transfer Request in U-Approve. 
  2. Make sure the description is exactly as it appears in Banner. 
  3. Transfers must be made within 90 days of the original charge or before the final expense posting date identified on the grant end memo to ensure proper final invoicing can occur (whichever occurs first). 
  4. Must be signed by the PI, PI’s supervisor of the org under which the grant activity resides (department chair or unit head), and the GCO in OSP. The PI & supervisor cannot be the same person.  
  5. If signature authority is delegated, written authorization must be maintained at the department level.  
  6. Corrections in excess of $1000 or after 90 days will be considered only under unique and unavoidable circumstances and must be fully explained on the form. 

Payroll Cost Transfer Process

  1. Complete Payroll Cost Transfer Request in U-Approve 
  2. Transfer must be made within 90 days of the original charge or before the final expense posting date identified on the grant end memo to ensure proper final invoicing can occur (whichever occurs first) 
  3. The PAR report should be marked incorrect for that pay period, and a copy of the cost transfer should be attached. If the PAR has already been certified as accurate, a memo must also be attached explaining why it was certified incorrectly. 
  4. Must be signed by the PI, PI’s supervisor of the org under which the grant activity resides (department chair or unit head), and the GCO in OSP, and if it also affects a non-grant index should have the Business Services Fund accountant as an additional approver. 
  5. If signature authority is delegated, written authorization must be maintained at the department level. 
  6. Payroll cost transfers may not be used to increase or decrease an employee’s pay. These corrections must be processed through HR on an RPT via U-Approve. 
  7. Any correction related to type of pay such as pay that should have been sick or annual also requires HR to correct the pay type and can’t be done through a Payroll Cost Transfer. 

Journal Voucher Process

  1. Procard charges must be moved via U-Approve within 90 days using rule code JE2. 
  2. The reclassification of expenses must explain why the new account code is appropriate with the JE1 rule code via U-Approve. 
  3. Recharge center expenses are processed using rule code JIN in U-Approve. The recharge center must receive approval from the Core Facilities and HUES Evaluation Director in the VPR’s office. 
  4. Must be signed by PI or DRA and routed to GCO in OSP, and if it also affects a non-grant index should have the Business Services Fund accountant as an additional approver. 

Justification Requirements for Cost Transfer & Journal Vouchers

  1. Clearly explain why the original charge was incorrect. 
  2. Demonstrate that the cost is allowable, allocable, and directly benefits the receiving project. Explanations should be detailed and transparent for both internal and external auditors monitoring institutional controls. There is a higher level of scrutiny on cost transfers.   
  3. Align with the sponsor-approved budget and project objectives. 
  4. Explain steps taken to prevent similar errors in the future, when applicable. 
  5. Cost transfers from one sponsored project to another sponsored project will not be approved if the justification is to eliminate cost overruns, as this violates federal regulations and is not allocable. Over-budgets should be transferred to a non-grant account.  

Central Office Errors – Transfer needed to correct errors made by central offices (Business Services, OSP, or HR) may be initiated by OSP without PI approval. 

Addressing Systemic Problems – Frequent cost-allocation errors can signal weaknesses in grant management practices. When ongoing issues are detected, the PI and/or department may need to review internal processes and implement improvements as recommended by OSP and/or Internal Audit.