An expense transfer is a direct charge expense transferred from one account to another after the original charge has been posted in the financial records. All expense transfers, excluding personnel charges, are processed on the G/L Posting Document. A complete explanation must be attached to this document to justify why the transfer is necessary and why the expense was not charged to the correct account in the first place.
Project directors are cautioned that excess transfers indicate a lack of internal control, and typically lead to audit findings and repayment of project funds to the agency. Therefore, the project director and/or department head should be prepared to justify expense transfers to Federal and State auditors.
When transfers of personnel costs are required, a UM Personnel Form 3 is processed. Transfers are allowed for charges incurred within ninety days immediately preceding the date of the transfer request, as long as the department provides adequate justification. Transfers prior to the ninety day period are only allowed in extraordinary situations and only upon approval by the Accounting Office. Transfers processed on Federal projects are alway subject to review by our Federal auditors. Please refere to the Activity Report Policy for additonal information on payments from Federal projects.
Transfers which are normally acceptable:
Transfers which may be allowable, but raise serious questions:
Transfers which are generally unallowable:
Pending award expenses:
In some cases, expenses must be incurred or purchase orders issued in advance of receiving an award document from the sponsoring agency. It is not acceptable to charge one project with the anticipation of transferring the charge upon receipt of funding for another project.
The Contracts and Grants Office may be notified to request the establishment of an account to accept charges before the award document is received. To request a new account, the project director must provide written justification and an underwriting account. A funds commitment may be processed on the underwriting account until the new award is received. This arrangement allows expenses to be incurred, but avoids processing expense transfers later.
As an alternative, expenses previously charged to a departmental account, in anticipation of an award, may be transferred to the sponsored account if the charging document has been identified as a pre-award charge. This is not the preferred method because it requires an expense transfer at some point.