Cost Transfer FAQs
Where can I find the justification form?
The justification form should be used until the systems are modified to allow the justification to be provided within each system.
Where should the hard copy be maintained?
When a system doesn’t provide the opportunity to include a justification, the hard copy should be maintained in the departmental grant file. Grant Accounting or auditors may request a copy of the justification form at any time.
Will justification be required for costs transferred off fund 500/510?
Justification will not be required for cost transfers to move expenditures off of Fund 500 or 510. It is important though, that if a cost is determined to be unallowable, that it is moved off immediately. Delay in moving costs will cause risk to the institution.
Last updated: 12/21/2022
Who approves the appropriateness of an expenditure?
A delegate may approve a cost transfers, but it is expected that the PI is aware of the expenditure and concurs with the cost transfer.
Who is considered a delegate?
A delegate is anyone in a department who has been given the responsibility for initiating cost transfers.
Will separate justification be required for every cost transfer?
Yes, unless approval is obtained from Grant Accounting. If approval is obtained from Grant Accounting, the justification for the group of transactions must be submitted to the Grant Accounting Office in advance of the entries.
What should I do with expenditures for an award where the award notification hasn’t arrived yet?
If appropriate, Advance MFKs can be requested and established. In cases where an Advance MFK would not be appropriate, the expenditures should be charged to and remain on a departmental account until the award notification is received. It would not be appropriate for the expenditures to be charged to another sponsored project account.
I want to set up an advanced account, what should I do?
More information on advance accounts (or Advanced MFKs) can be found here: Advance MFKs and Renewals.
If I have to make a change of status request for an individual effective back to the first day of the current month, will I be required to provide a justification?
No. You would only need to provide a justification when the transaction creates a retro-active accounting adjustment.
Do distribution type charges (phone, copier, etc.) require a justification?
If transactions that are distributing these types of costs are done on a timely basis and the department maintains a log or tracking mechanism that documents how it was determined that these charges were allocable to a particular sponsored project, then a cost transfer justification will not be required.
Justification is required in the following situations: 1) Costs distributed more than three months after the occurrence of the original entry; 2) Costs distributed for which the department has not maintained separate documentation in the form of a log or other tracking mechanism; 3) Costs distributed when the original entry was a sponsored project.
In order to support distribution type charges (phone, copier, etc.) what should the log or tracking mechanism include?
Generally, these types of charges are not allowable on grants and contracts. In the rare cases when these charges are allowable supporting documentation of each charge is required. The documentation must demonstrate how the cost was determined to be allocable to the award. For more information, see the Shared Costs Tracking Documentation Guidelines.pdf
Last updated: 12/21/2022
Do internal charges require a justification?
No. Costs related to internal services are not considered cost transfers. However, if an internal cost is being moved onto a fund 500/510 then a cost transfer is required with a justification. As a reminder, service center charges must adhere to the University of Iowa, Service Center Policy.
Last updated: 12/21/2022