Cost Transfer Procedures

John P. Kruczek, University Controller

During the past three years, a University Cost Accounting Committee has worked to establish procedures that will make the University of Florida compliant with OMB Circular A-21 and the Cost Accounting Standards. In order to meet the requirement to identify and correct errors in the allocation of direct charges in a timely manner, the cost transfer guidelines were established and made effective July 1, 1996.

The guidelines state that “an error in charging of costs to grants and contracts must be identified and corrected within 60 days of the error or 30 days after the end of the budget period, whichever date occurs first”. We believe this is a reasonable amount of time to detect an error and make a change in funding.

Unfortunately, a large number of cost transfers continue to occur beyond this reasonable time period. These late transfers potentially subject the university to significant cost disallowances on federal contracts and grants. We are, therefore, establishing a new procedure in the Contracts & Grants offices (IFAS, Engineering, and Administrative Affairs). All cost transfers which are submitted more than sixty days from the date of occurrence of the original charge or more than thirty days after the contract or grant termination date, effective November 16, 1998, will be returned to the submitting departments unprocessed. Requests resubmitted for consideration must be accompanied by a letter of justification addressed to Mr. Gerald Schaffer, Vice President of Administrative Affairs. In order to be considered for further processing, these requests must demonstrate that the delay was unavoidable, and must indicate what steps have been initiated in the center or department to prevent late cost transfers in the future. The request must be signed by the Dean, Director, or Department Chair. If approved, exception requests will be forwarded to Finance and Accounting for processing.

The Cost Transfer policy may be reviewed on the web at http://fa.ufl.edu/cg/. If you are unable to obtain the policy through the Internet, you may contact Tonji Herbert in Contracts & Grants at 392-1235 for a copy.