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A good justification will allow anyone reviewing the cost transfer to understand how the expense benefits the receiving PTA. It should be easily understood by anyone reviewing the journal, and provide enough detail to inform approvers and auditors about the action taken. Think, "if I leave my position, will an auditor be able to understand this two years from now?" it should answer: who, what, where, when, and why. 

  • Who: the person, organization, or department name(s) that caused or played a role in the journal

  • What: what events or circumstances are causing the journal

  • When: the month of occurrence or the key date related to the cause

  • Where: the location of the event or occurrence (if it is significant)

  • Why: why a change is required

The trick to writing a complete justification is to try to answer all possible questions. It is important to state explicitly how the project which will pay this expense benefits from the transfer. Include a statement like: "The direct benefit to Project XXX of this expense was __".  Indicate whether the sponsor approved the transaction. If you wonder if you have included enough information, you probably haven't. Do not use abbreviations or acronyms in a justification. Above all, remember, you cannot transfer expenses to a new PTA  just because it has money!

Examples of documentation to include: Allocation methodology, an invoice or packing slip, notes on an expenditure statement, “per PI …”

Sample Wording to Document a Salary Transfer

  1. Charges are being transferred onto this award because the appointment paperwork for Grad Student X was not received in time to allocate her salary correctly. Consequently, this month’s charges for Grad Student X are incorrect.

  2. The efforts of Grad Student X directly benefit the scope of work for Project Y - OR - Grad Student X conducted experiments related to the Project Y statement of work (be specific, but brief)

  3. These salary charges are allowable on this award per the Project Y agreement.

  4. PI Smith has reviewed the charges and assessed the efforts of Grad Student X.

  5. Appointment paperwork is now fully approved, and the Labor Distribution Schedule corrected for Grad Student X so that her salary will now be charged correctly.

Ask OSR, RMG, ERA or School Compliance Officer for help making sure your documentation is adequate.

Compare Justifications

Inadequate Justification: To allocate chemicals from an expenditure allocation PTA to appropriate project PTA

Better Justification: Department X expenditure allocation PTA is used to collect all department chemical charges. All charges to sponsored projects were proposed and approved consistent with Stanford and sponsor policy. Documentation, including allocation methodology, is in departmental files.

Explanation: The inadequate justification does not address the question of whether or not the chemical charges are allowable and allocable to the PTAs to which they are being charged through the cost transfer.  The better justification states that the department is aware of the documentation requirements for these charges, attests that all requirements have been met, and states where the documentation records can be found. The length of a justification is irrelevant. A justification must include the pertinent facts, and easily understood by anyone who may read it now and in the future.

Use the Cost Transfer Checklist to help you write the documentation and to facilitate a timely review by OSR.

Tips for Writing the Justification

A good justification will allow anyone reviewing the cost transfer to understand how the expense benefits the receiving PTA. It should be easily understood by anyone reviewing the journal and provide enough detail to inform approvers and auditors about the action taken. Think, "if I leave, will an auditor be able to understand this two years from now?" it should answer: who, what, where, when, and why. 

  • Who: the person, organization, or department name(s) that caused or played a role in the journal

  • What: what events or circumstances are causing the journal

  • When: the month of occurrence or the key date related to the cause

  • Where: the location of the event or occurrence (if it is significant)

  • Why: why a change is required

The trick to writing a complete justification is to try to answer all possible questions. It is important to state explicitly how the project which will pay this expense benefits from the transfer. Include a statement like: "The direct benefit to Project XXX of this expense was __".  Indicate whether the sponsor approved the transaction. If you wonder if you have included enough information, you probably haven't. Do not use abbreviations or acronyms in a justification. Above all, remember, you cannot transfer expenses to a new PTA just because it has money!

Examples of documentation to include: Allocation methodology, an invoice or packing slip, notes on an expenditure statement, “per PI …”

Sample Wording to Document a Salary Transfer

  1. Charges are being transferred onto this award because the appointment paperwork for Grad Student X was not received in time to allocate her salary correctly. Consequently, this month’s charges for Grad Student X are incorrect.

  2. The efforts of Grad Student X directly benefit the scope of work for Project Y - OR - Grad Student X conducted experiments related to the Project Y statement of work (be specific, but brief)

  3. These salary charges are allowable on this award per the Project Y agreement.

  4. PI Smith has reviewed the charges and assessed the efforts of Grad Student X.

  5. Appointment paperwork is now fully approved, and the Labor Distribution Schedule corrected for Grad Student X so that her salary will now be charged correctly.

Ask OSR, RMG, ERA or School Compliance Officer for help making sure your documentation is adequate.

Compare Justifications

Inadequate Justification: 

To allocate chemicals from an expenditure allocation PTA to appropriate project PTA

Better Justification:

Department X expenditure allocation PTA is used to collect all department chemical charges. All charges to sponsored projects were proposed and approved consistent with Stanford and sponsor policy. Documentation, including allocation methodology, is in departmental files.

Explanation:

The inadequate justification does not address the questions of whether or not the chemical charges are allowable and allocable to the PTAs to which they are being charged through the cost transfer.  The better justification states that the department is aware of the documentation requirements for these charges, attests that all requirements have been met, and states where the documentation records can be found. The length of a justification is irrelevant. A justification must include the pertinent facts, and easily understood by anyone who may read it now and in the future.

If an error is discovered after the end of the award, a transfer of expense should be made by removing the expense prior to award closeout.

If after the end date of an award an expense is determined to be unallowable to the project (but did benefit the project), the expense must be transferred to a Cost Sharing PTA for accounting purposes, although it cannot be counted towards a Cost Sharing commitment.

Documentation

The documentation of a cost transfer made after a project end date will be closely scrutinized. In addition to including all the necessary elements of a cost transfer justification large cost transfers that exceed $10K or 10% of the award, and transfers within the first or last 90 days of a project, and transfers that do not meet the timeliness criteria receive additional central review. For the transfer of all non-salary charges subject to the above criteria, a PDF of the general ledger** showing the expenditure(s) requesting to be moved MUST be attached to the cost transfer transaction by the originator.  Attaching detailed documentation for these transfers will facilitate their timely review by the Office of Sponsored Research (OSR).

Examples

These charges are for effort expended before [insert Project Y’s end date] and they are appropriate per the Project Y award agreement.

These charges could not be processed in a timely manner because PI Smith was traveling in Mongolia and was not available to review and approve the charge.

Created: 11.28.20
Updated: 04.05.21