GAP 200.150, Cost Transfers on Federally Sponsored Projects

  1. Applicability
  2. General
  3. Timeliness
  4. Documentation
  5. Record Retention
  6. Additional Resources




Federal awards issued prior to December 26, 2014 should be managed in accordance with OMB Circulars A-21, A-110, and A-133. Federal awards issued on or after December 26, 2014 should be managed in accordance with 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (The Uniform Guidance). It is important to verify the appropriate regulations applicable to your award. Documentation of appropriate regulations may be found in the Award Notice issued by the funding agency.

These guidelines pertain to Federally sponsored projects and should be used as guidance for all sponsors unless specifically addressed in a non-Federal sponsor’s policies and/or procedures.

This GAP supersedes previous GAP versions, Duke Policies, Guidelines, etc. Unless otherwise noted, this GAP applies to all sponsored projects.



A cost transfer is a movement of costs associated with a transaction between two cost objects, of which at least one must be a federally sponsored project (30x – 34x, 20x – 24x and 35x, 38x, 25x, or 28x WBS Elements which were originally funded by a federal agency). This includes salary and non-salary costs. An exception to the definition of a cost transfer is allocating charges from an allocated or non-restricted cost object to a federal sponsored project. These actions are considered original or initially recorded charges.

This procedure does not apply to non-federally sponsored projects. For corrections involving non-federally sponsored projects, refer to GAP 200.020, Journal Vouchers.

When an erroneous entry affects a restricted federally sponsored project, the correction must be made on a timely basis and sufficient information must be provided to allow for a clear audit trail back to the initially recorded expense. The federal government regulations state “We will assess if the transfers are supported by documentation that fully explains how errors occurred and if responsible grantee officials certify the correctness of the new charges.”

Errors in recording costs indicate the need for improvement in the accounting process and/or internal controls. When errors occur, departments are required to evaluate these areas and make the necessary improvements.

Cost Transfer Examples:

  • Correcting charges BETWEEN federal sponsored projects are cost transfers. For example, if lab supplies are incorrectly charged to 3431234 and are moved to the correct federally sponsored project 3031234.
  • Correcting charges FROM federally sponsored projects TO another cost object (such as an allocated cost object / department cost center) are cost transfers. For example, if meeting expenses are erroneously charged to a federal cost object 3031234 and later moved to a department cost center 4xxxxxx.
  • Correcting charges TO federally sponsored projects FROM another cost object (such as an allocated cost object / department cost center) are cost transfers. For example, if meeting expenses are erroneously charged to a department cost center 4xxxxxx and later moved to a federal cost object 3031234.

The following are NOT Cost Transfers UNLESS they are untimely: If any of these transactions are untimely, then they should be coded as cost transfers and the untimely documentation requirements will apply.

  • Allocating charges from an allocated cost object/department cost center to a federally sponsored project cost object are considered original or initially recorded charges; they are not cost transfers. Examples include allocation of long distance phone bills, break-out/distribution of purchase or framework orders and service center bills that cannot be allocated at the time of purchase.
  • Initially recorded charges such as expenses charged through a Purchase or Framework Order, Corporate Card, Service Center, copying charges, etc., are not cost transfers.

A cost transfer from one sponsored project to another may not be processed in the following instances:

  • to cover cost overruns with funds in other sponsored projects
  • to avoid restrictions imposed by the Sponsor
  • for other reasons of convenience.
Before an expense can be charged to a sponsored project it must first meet all the requirements of GAP 200.320, Direct Costing on Sponsored Projects.

The Office of Research Costing Compliance (RCC) monitors monthly cost transfers covered by this procedure for compliance. RCC will coordinate corrective action with the Management Center and Department.



A cost transfer should be processed promptly after the error is discovered. For more information regarding the verification of financial transactions, refer to GAP 200.012, Reconciliation of Financial Transactions. Untimely cost transfers may raise serious questions concerning the propriety of the cost transfer and may be subject to a cost disallowance.

A cost transfer is considered "untimely" when it is not processed within three accounting periods after the initially recorded charge. Violations of the deadline do not necessarily mean that the related expenditure is unallowable from a regulatory perspective. Duke University has implemented a review and approval process for untimely cost transfers. This is further explained in the Non-Payroll Cost Transfers on Sponsored Projects Administrative Policy.

Cost transfer documentation and timeliness of corrections involving federal sponsored projects are the responsibility of the department. When errors occur, departments are required to evaluate the charges and make the necessary corrections in accordance with applicable University policies and procedures.

Deadlines associated with the submission of cost transfers are as follows:

Timeframe   Approval
< 3 months   As defined by the department
> 3 months   Department Approval (may require cost-sharing)
> 6 months   Unallowable cost to federal sponsors (must be charged to institutional funds)
(Exceptions require Management Center / Vice Dean/Provost approval)

In all cases, an unallowable expenditure must be removed from a federally sponsored project regardless of timeframe.

Both the Campus and Medical Center have additional policies regarding untimely salary cost distribution changes. Untimely iForms >180 days involving federal funding will not be approved by the Management Centers except in two very specific circumstnaces:

  • Late issuance of cost object. The department must show that a Cost Object Request was submitted to the pre-award office for approval within 90 days of the current project or budget start date. Charges should be transferred within 90 days of cost object issuance.
  • Correcting a recent iForm that mistakenly change a correct original cost distribution. The Notification Numbers of the incorrect iForm and the correct iForm should be included in the justification for reference. Corrections should be made with 90 days of the incorrect transfer.

Special Guidance:

Per the US Department of Health and Human Services (DHHS): "Permissible cost transfers should be made promptly after the error occurs but no later than 90 days following occurrence unless a longer period is approved in advance by the GMO."

This includes, but is not limited to the following Grantors:

  • Administration for Children and Families
  • Agency for Health Care Policy and Research
  • Centers for Disease Control and Prevention
  • Substance Abuse and Mental Health Services Administration
  • Health Resources and Services Administration
  • Food and Drug Administration

Per NIH, cost transfers are considered to be untimely if they are greater than 90 days from the discovery of the error. 

Cost transfers to NIH grants by grantees, consortium participants, or contractors under grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee, consortium participant, or contractor. An explanation merely stating that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.

Although Duke University has established a formal policy regarding sequenced approvals for cost transfers, please note: if the error is discovered on an NIH award, AND the cost transfer occurs >90 days from that discovery, the cost transfer is deemed to be unallowable.



A cost transfer is documented by processing a Cost Transfer or for payroll a Cost Distribution iForm, Supplemental Payment Form, or Non-Compensatory Awards Form.

A. Payroll

All payroll cost transfers are completed by using a Cost Distribution iForm, Supplemental Payment Form, or Non-Compensatory Awards Form. Additional documentation can be entered in the untimely justification field. Additional documentation is not required unless the cost transfer is untimely.

For untimely payroll cost transfers, a clear audit trail must be provided. The justification must include how the error occurred or, if no error occurred, a reason for the delay in processing the cost transfer. Copies of source documentation can be copied in the comments field.

For payroll cost transfers, the Untimely Cost Transfer Justification should be provided in the “untimely justification” field on the Cost Distribution iForm. The justification must provide a full explanation of the reason for the delay in processing the correction (cost transfer). The justification should also identify steps taken to prevent the error from occurring again, if appropriate.

B. Journal Voucher (JV) Keyed in SAP by Department

Duke University has developed a new process to streamline cost transfers: ZF418 should be used for all cost transfers meeting the definitions provided in this GAP.

Any cost transfer involving a non-salary cost processed on a Journal Voucher using transaction ZF418 must meet the requirements of this section and Section III Timeliness. Failure to provide the required documentation could result in the expense being moved to the department discretionary cost center. Reference the SAP Quick Reference – ZF418 Non-Salary Cost Transfer Tool (pdf) for how to process a cost transfer.

While not reported as cost transfers, you may use the ZF418 tool to execute the following transactions:

    • Transfers between General Ledger Accounts with a single WBSE:  this should be coded as transfers between general ledger accounts when using the ZF418 tool
    • Transfers between parent WBSEs and sub WBSEs, both of which are housed in Duke University departments:  this should be coded as a transfer between a parent and a sub when using the ZF418 tool.

For non-payroll cost transfers, the Untimely Cost Transfer Justification should be provided in the “Extra Texts” field within SAP. The justification must provide a full explanation of the reason for the delay in processing the correction (cost transfer).



The department keys the Journal Voucher directly in SAP. If the Text and Additional Notes fields in SAP cannot contain sufficient information to allow for a proper audit trail of the transaction, the department must maintain the paper documentation. The paper documentation must be retained for a period of seven years or for three years after a project terminates, whichever is longer. It is imperative that the department implement internal procedures that allow the paper documentation to be readily accessible if the cost transfer is required during an audit. Please note: the department documentation should include specific details as to how and WHEN the error that necessitated the cost transfer occurred.

Note: This guidance is administrative in nature and is not a cost reimbursement policy. Failure to comply may or may not result in adjustments of charges to the award. Noncompliance with this policy does not mean this cost is unallowable from an external perspective. Any adjustments of charges will be as required under applicable federal cost reimbursement principles. If a cost is removed from an award for any reason, whether or not related to this guidance, the cost will generally be charged to departmental funds.



For assistance regarding the data required in a Cost Transfer, contact the Office of Sponsored Programs at (919) 684-5442.

For assistance with SAP, contact Accounting Systems Administration at (919) 684-2752.

Additional General Accounting Procedures that may assist you with the Cost Transfer process: