How To

Tips for Writing a Cost Transfer Justification

A good cost transfer justification allows anyone reviewing the cost transfer to easily understand how the expense benefits the receiving PTA(s). It should provide enough detail to inform approvers and auditors about the action taken. Think, "if I leave my position, will my successor, OSR, and/or an auditor be able to understand this two years from now?".  All cost transfer justifications should address the following:

  1. Identify how/when the needed transfer was identified. For example, 
    • During monthly review
    • During quarterly review
    • When meeting with the PI/faculty/lab manager/etc.
  2. Explain how the costs benefits/advances the statement of work of the project(s) to which it is being moved.  For example, 
    • The super gigantascope 3000 will be/is being used in the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army project.
    • The super gigantascope 3000 will be/is being used in the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army, NSF, and ONR projects.  Based on (choose one appropriate allocation method.  For example, historical experimental use, head count etc.) 25% or $XX is being allocated to the Army award, 25% or $XX is being allocated to the NSF award, and 50% or $XX is being allocated to the ONR award.
    • Post doc Brilliant will be working on the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army, NSF, and ONR projects.  Based on (choose one appropriate allocation method.  For example, historical experimental use/head count etc.) 25% or $XX Post doc Brilliant’s salary is being allocated to the Army award, 25% or $XX is being allocated to the NSF award, and 50% or $XX is being allocated to the ONR award.
  3. Address how we will do better to avoid this type of issue in the future.  For example, if it is a recurring expense, advise what has been/will be done to ensure the issue does not repeat, or if it will, why.  For example:
    • The PO has been updated to ensure all future charges post correctly.
    • The service center has been advised of the updated allocation methodology to ensure future charges post correctly.
    • The labor schedule/GFS record has been updated to ensure future earnings post correctly.
    • Due to the XYZ system limitation it is not possible to charge these expenses correctly initially. Thus, each month/qtr. an adjustment is required to appropriately and correctly charge the benefiting projects.

The trick to writing a complete justification is to try to answer all possible questions. Again, it is critical to state explicitly how the project(s) that will pay this expense benefits from the transfer.  And remember, it is NEVER appropriate to transfer expenses to a sponsored project PTA just because it has money!

Never hesitate to ask your School Compliance Officer, the ORA Client Advocacy & Education (CAE) Team, or your department's assigned OSR Post award Accountant for help ensuring your cost transfer justification is adequate.  We are all in this together!

Compare Justifications

Inadequate Justification: To correct a previously misapplied invoice.  This expense is allowable, allocable, and reasonable.

Better Justification: During December monthly expense review, the RA identified the invoice for the gigantascope 3000 which is being used in the data collection and analysis for Prof. Cardinal’s dark matter experiments for her Army project incorrectly posted to the old award for this project when the gigantascope 3000 is being used for the renewal segment, as confirmed by the lab manager.  This transfer is to correctly post the invoice to the renewal award.  This is a one-time adjustment, as there will be no additional invoices for the gigantascope 3000.  Going forward the RA, PI, and lab manager will be more diligent in reviewing purchase orders to ensure the correct award segment is entered at the time of purchase.

Explanation: The inadequate justification does not address how the need for the transfer was identified, how the cost benefits/advances the statement of work of the project to which it is being moved, or how we will avoid this type of issue in the future.  The better justification addresses all of these elements.  The length of a justification is irrelevant. A justification must include the pertinent facts, and be easily understood by anyone who may read it now and in the future.  

Please note, cost transfers submitted through the Oracle ijournal module allow for the attachment of documents.  Use this functionality for complex cost transfers that require a justification longer than you may enter in the ijournal Justification text box and/or to upload supporting documentation such as your allocation methodology for costs being allocated across multiple sponsored projects.

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

Additional Resources

ORA Cost Transfer Resources - Includes instructions for Late Cost Transfer Exceptional Approval Process