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Process Cost Transfers for Sponsored Projects

Before You Begin

Before you begin this procedure, become familiar with the policies related to this topic.

A cost transfer is a reallocation or redistribution of a previously charged expenditure transferred from one University fund (C-FOAP) to another after the charge has been posted in Banner. Consult Policy Exceptions for transactions that are not considered cost transfers by the University of Illinois.

Begin

To process Cost Transfers for sponsored projects:

1. Determine if the transfer is allowable as outlined in Cost Transfers Principles and Expectations.
2. Determine if you need to process a current or non-current cost transfer. As a reminder, cost transfers should be completed as soon as the need is detected and non-current transfers (older than 90 calendar days) should be kept to an absolute minimum. Non-current transfers require additional documentation.
   
   Current Cost Transfers are those initiated during the accounting period in which the charges were originally recorded in Banner, or within 90 calendar days of the original transaction date in Banner.
   
   Non-Current Cost Transfers are those processed more than 90 calendar days after the original transaction date in Banner. Non-current transfers require additional documentation (see step 4 below). 
3. Use either a Banner Journal Voucher (JV) or Labor Redistribution form to transfer costs:
   
   Non-Personnel Expenses – Use Banner Journal Voucher Form FGAJVCD, FGAJVCM, or FGAJVCQ. Consult the job aid, Creating a Journal Voucher with FGAJVCD and FGAJVCQ, for step-by-step instructions on how to create journal vouchers. The following information should be included in the Text screen (FOATEXT):
   • Explanation, including the reason for initial posting to incorrect C-FOAP, and benefit of the cost being transferred to the project
   • Original date of the service or transaction
   • Original transaction document number
   • Preparer's name and telephone number
   • If the cost transfer is non-current see step 4 below, and
     • Urbana and Springfield – complete and submit Form GC81: Cost Transfer Justification For Sponsored ProjectsThis form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If you cannot open the form in your browser, right click on the form's link, choose to save it to your computer, and open it directly in Adobe Acrobat Reader. to sponsored programs post-award office
     • Chicago - note that Form GC81: Cost Transfer Justification For Sponsored ProjectsThis form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If you cannot open the form in your browser, right click on the form's link, choose to save it to your computer, and open it directly in Adobe Acrobat Reader. is on file in the department

   Vouchers may be rejected by sponsored programs post-award office if sufficient documentation is not provided in the Text screen (FOATEXT).

   Personnel Expenses - Use Banner Labor Redistributions Form PZAREDS. Consult the job aid Performing Labor Redistributions (PZAREDS) for step-by-step instructions on how to create labor redistributions. The following information should be documented and retained in your unit to support the effort charged to the project:

   • Explanation, including the reason for initial posting to incorrect C-FOAP, and benefit of the cost being transferred to the project
   • Date when the effort was provided, the individual's name and UIN, and pay period code
   • Contact information for individual requesting the transfer
4. For current transfers, skip to step 5. For non-current transfers (both non-personnel and personnel transfers), complete a Form GC81: Cost Transfer Justification For Sponsored ProjectsThis form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If you cannot open the form in your browser, right click on the form's link, choose to save it to your computer, and open it directly in Adobe Acrobat Reader.:
   • Have the principal investigator sign the form to confirm that the charges are allowable, proper, and approved by them. If the principal investigator is not available, someone at a higher level, such as a unit (or department) head, dean or center director who:
     • Has knowledge about the project and the work being performed
       AND
     • Can sign the form by acting on behalf of, in the absence of, the principal investigator
   • Route the GC81 Form as described below:
     • Non-Personnel Expenses (Banner Journal Voucher):
       • Urbana and Springfield – Submit the Form GC81: Cost Transfer Justification For Sponsored Projects with the Journal Voucher and retain a copy in your unit
       • Chicago – Keep the Form GC81: Cost Transfer Justification For Sponsored Projects on file in your unit
     • Personnel Expenses (Labor Redistribution form) – Keep the Form GC81: Cost Transfer Justification For Sponsored Projects with your copy of the Labor Redistribution form in your unit
5. Retain copies of supporting documentation for all cost transfers in your unit:
   • Journal voucher or labor redistribution transferring the costs
   • Documentation for the original expenditure being transferred, including but not limited to vendor (original) receipts or invoices, or internal University service-unit billings
   • Authorization to initiate the cost transfer and any related correspondence documenting the need and justification for the cost transfer; authorization should be from the principal investigator or from the responsible business person for the department
   • Form GC81: Cost Transfer Justification For Sponsored Projects for non-current transfers
   The documentation for cost transfers must be retained for the period stipulated in the record retention schedule and be made available for verification during the course of an audit or other review. If a cost transfer does not have adequate supporting documentation, it may be deemed unallowable by the sponsor, auditors, or your university sponsored programs post-award office. If that happens, the unit is responsible for covering the unallowable costs with unrestricted funds from sources such as an indirect cost recovery (ICR) fund or a gift fund.
6. If the expenditures being transferred or redistributed were previously confirmed (Urbana and Springfield) or certified (Chicago):
   
   Urbana and Springfield - The unit confirmation contact may be required to submit a request for an updated semi-annual confirmation report (reconfirmation) through the Semi-annual Expenditure Confirmations system.
   
   Chicago – If the personnel expenditures being transferred were previously certified during the annual effort certification process, the unit business manager should contact the sponsored programs post-award office for guidance.

Forms Used in this Procedure

Form GC81: Cost Transfer Justification For Sponsored ProjectsThis form requires Adobe Acrobat Reader and will not work with some browsers' default built-in PDF viewers. If you cannot open the form in your browser, right click on the form's link, choose to save it to your computer, and open it directly in Adobe Acrobat Reader.

Additional Resources

Journal Voucher Processing (GL 101)
Labor Redistribution (PR 130)
U.S. Office of Management and Budget (OMB) Circular A-21, 2 CFR, Part 220
U.S. Office of Management and Budget (OMB) Circular A-110, 2 CFR, Part 215
CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Semi-annual Expenditure Confirmations
Effort Reporting System

Last Updated: March 15, 2021 | Approved: Senior Associate Vice President for Business and Finance | Effective: March 15, 2021