Cost Transfer Policy (Effective July 1, 2018)

Effective Date: October 1, 2014
Revision Date: July 1, 2018
PDF Version: Cost Transfer Policy Effective July 1, 2018

Policy Statement

Harvard University has established the following policy for the processing of cost transfers to comply with the requirements of Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) and federal agency policies and procedures.

For the purposes of this policy, a cost transfer (CT) is a transfer of an expense onto a federally-funded sponsored award previously recorded elsewhere on Harvard's General Ledger (GL) and identified by Harvard as requiring institutional approval before it can be posted to the GL.

Reason for Policy

In accordance with OMB, it is necessary to explain and justify transfers of charges onto federally funded sponsored awards, when the original charge was previously recorded elsewhere on Harvard's GL. Timeliness and completeness of the explanation of the transfer are important factors in supporting allowability and allocability in accordance with federal requirements.

Who Must Comply

All Principal Investigators (PIs) and administrators at Harvard University within all schools, units, divisions, University-wide initiatives, and centers who are involved with the administration and conduct of federally-funded sponsored awards must comply with this policy.

Roles and Responsibilities

Principal Investigators (PIs) take primary responsibility for ensuring compliance with federal regulations as well as the monitoring of expenditures, timely correction of errors, and proper allocation of expenses.

Grant managers and Department/Local level managing units (individuals responsible for account monitoring/management) assist PIs in the timely review and reconciliation of expenditures, prepare cost transfers and maintain adequate documentation of questionable costs, and ensure that all personnel engaged in the financial administration of federally funded sponsored awards are familiar with this policy; ensure that the costs transferred are allocable, allowable, and reasonable, prepare and submit timely approved Cost Transfer Form, Corrective Action Plan (CAP) if required, and retain copies of all related supporting documentation in accordance with the University record retention regulations; responsible for approving all under 90 day1 cost transfers if granted “authorized approver” designation by their school/tub-level official. If a cost transfer is rejected, it is the responsibility of the local level managing unit to ensure that the cost is removed and assigned to a non-sponsored account in a timely manner.

Authorized approver(s) have the authority to sign under 90 day1 cost transfers. These individuals are approved by school/tub level officials and can only be assigned in local areas with sufficient internal control in place and no recent history of relevant internal or external audit findings. In the absence of a departmental authorized approver, this responsibility shifts to the school/tub level or to OSP. Individual schools may be more restrictive; consult your local school/tub level official for guidance.

School/tub level officials provide oversight and are responsible for ensuring that local units abide by this policy and accompanying procedures when processing cost transfers. School/tub level officials are also responsible for the approval of all over 90 day1 cost transfers before submission to OSP. School/tub level officials grant authorized approver designation to local level managing units. If a school/tub level official does not grant a local level managing unit authorized approver status to approve under 90 day1 cost transfers, then the school/tub level official will determine whether the school/ tub or OSP will approve. Individual schools/tubs may be more restrictive; consult your local school/tub level official for guidance.

Office for Sponsored Programs (OSP) is responsible for maintaining the policy and accompanying procedures, addressing questions regarding the policy, approving over 90 day1 cost transfers, and approving under 90 day cost transfers if there is no school or local authorized approver.

Individuals preparing cost transfers should first contact their school/tub level Cost Transfer Contact with any questions regarding this policy or its application. This will ensure that school/tub level Cost Transfer Contacts are aware of cost transfer questions and consistent guidance is provided within each school/tub.

Cost Transfer Policy

This policy identifies after-the-fact reallocation of expenses that are considered cost transfers by the University.

Cost transfers that are generally unallowable, regardless of the date of the original transaction or the original amount, include those transfers that affect:

  • a previously submitted financial report;
  • a carryforward request required by sponsor;
  • a previously submitted final invoice; and/or
  • a final figure (expenditures) confirmed previously by the department.

Exceptions are rare and require both OSP and school/tub level review and approval.

Transaction Type A Cost Transfer Form is required when the original single direct cost transaction is over $1000 AND . . .
Salary on a quarterly statement2

Salary is part of a certified effort statement.


The effort certification deadline has passed

(Note: Quarterly salary object codes include 6050, 6051, 6059, 6070, 6071, 6079, 6080, 6089, 6090, 6110, 6120, 6140, 6150, 6152.)

Salary on an annual statement2

Salary is being moved after 90 days1.


Salary is part of a certified effort statement.


The effort certification deadline has passed.

(Note: Annual salary object codes include 6010, 6020, 6030 or 6040.)

All other transactions

Adjustments result in a debit to a federally-funded sponsored award and are not one of the following:

  • within the same federally sponsored fund;
  • within the same GL period
  • the result of a routine allocation under 90 days1 for initial distribution of shared service or service charges based on a documented allocation methodology;
  • the result of an invalid code combination; or
  • an expense from the balance sheet object code.
Stipend and tuition support transaction

Stipend and tuition support transactions are moved after 90 days1.

(Note: The stipend object codes include 6440, 6450, 6452, and 6455. The stipend object code associated with tuition support is 6440. The tuition remission and tuition support object code is 6430.)

Tuition remission transaction

Adjustments are made to tuition remission after 90 days1 of the posting of the related salary regardless of the original transaction date posted to the GL.


The salary related to the tuition remission is part of a certified effort statement or it is past the effort statement’s certification deadline.

(Note: The salary object code associated with tuition remission is 6140. The tuition remission and tuition support object code is 6430.)


Policy Exceptions

In rare cases, there may be compelling circumstances where exceptions to this policy may be warranted. All requests for an exception to this policy must be in writing, signed by the school/tub’s Director of Research Administration, Financial Dean, or equivalent position and submitted to the Assistant Vice President (AVP) of OSP.  It is recommended that exception requests be discussed with the school/tub level official and OSP Research Finance Team prior to preparing the justification and corrective action plan (CAP), which is a one-time plan for remedying the situation that caused the need for the exception.

All cost transfer exception requests will be reviewed on a case-by-case basis and must include a detailed justification and as much information as possible to assist the reviewer in evaluating the request.  The request must be accompanied by a CAP.  After considering the request, the AVP of OSP will determine whether to grant or deny the exception as well as the duration, review process, and process for closing out the CAP.


Action Memo: 
The official University communication regarding a sponsored award notice accepted by the University. Certain award terms and conditions, dates and dollars, and accounts activated for the award are included. The Action Memo is also used to communicate authorized internal requests and administrative changes.
Six-digit chart value and required segment of the sponsored account string that captures the purpose or use of funds.
Account Group: 
Numeric identifier that groups accounts (fund/activity/subactivity) together for financial reporting purposes. A new account group is created for each budget year when year logic is used. The subactivities (i.e., main, part of, and subcontract) are reported in aggregate by account group.
Corrective Action Plan: 
Set of written actions to correct an issue, a problem, or lack of internal control that is developed to prevent the event from re-occurring
Final Figure: 
Cumulative expenditures reported to the sponsor that are logged in GMAS by sub-activity
Grants Management Application Suite. GMAS is the University’s system of record for proposals, awards, financials, and documentation related to sponsored projects.
Sponsored Account: 
A sponsored account is the unique combination of a fund, activity and subactivity as set up in GMAS used to process transactions of a sponsored award in the Harvard General Ledger. Typically, there are three types of sponsored accounts: a main account, a part of account and a subcontract account.
Stipends are payments made to individuals for subsistence support or to defray expenses during a period of academic appointment. Stipend payments are not compensation for services rendered and, therefore, are not allowable on federal awards unless the purpose of the agreement is to provide training to selected participants and the charge is approved by the sponsoring agency (OMB Circular Uniform Guidance, Subpart E).
A subactivity is a 4-digit value within Harvard's Chart of Accounts that helps to identify tasks, phases, years, or sub-categories within an activity of an award. A subactivity is required for sponsored awards and allows an award to be broken down by tasks and/or grant years.
Submitted Financial Reports and/or Final Invoices: 
Many sponsors require the submission of annual and/or final financial reports or invoices at the end of each budget period and/or end of the project. Final reports and/or final invoices are submitted at the award termination. The final report also includes annual reports for a specific budget period when the award is set up under year logic and the accounts for the reporting period require final figures for closeout.
Tuition Remission: 
The portion of a salaried graduate student’s tuition and fees charged to sponsored research awards as part of compensation package for performing necessary work on the research project. The allocation of tuition payments must be no more than salary distribution of relevant work effort on the research award. Tuition remission is subject to effort reporting.
Tuition Support: 
A scholarship payment made to an individual who has a stipendee status during a period of academic appointment. The tuition support is not compensation for services rendered. In general, it should only be charged to sponsored training grants and sponsored fellowship awards when the primary purpose is to aid the individual in pursuit of personal studies or research.

Cost Transfer Contacts

  • FAS/SEAS: Nuala McGowan
  • HGSE: Tiffany Blackman
  • HKS: Carrie Kachoria
  • HMS: Rita Bergemann
  • SPH: Kristie Froman
  • HDS: Krista Carmichael

Please see the Cost Transfer Approvers on the OSP website.

For all other tubs, please contact the OSP portfolio manager assigned to your department/unit.

Related Policies and Guidance



1 90 days means 90 calendar days from the 15th of the month following the one in which the charge was originally transacted. For example, if the original charge posted on 1/1/16, 90 calendar days are counted from 2/15/16. Use the Cost Transfer calculator here to calculate 90 days. Note that the “original transaction date” in the General Ledger is determined according to the “Effective Date” in the Oracle Business Intelligence (OBI) Transaction Listing.

2 Note that the certification status, annual or quarterly, is set at the beginning of the fiscal year, based on current payroll information, and will not change during the year. Once an individual is assigned as an annual or quarterly certifier, the portions of the policy that relate to that employee type, annual or quarterly, should be followed.

Cost Transfer Policy Revision History

December 2014

  • Added example of cost transfer naming convention for over 90 days CTS
  • Added OSP contacts links to contacts section for all other tubs
  • Updated Uniform Guidance References

June 2015

  • Clarification of language relating to allowable exceptions regardless of dates for payroll entries to correct “period of work performed” and single direct cost transactions under $500
  • Added an under 90 day exception for DHHS accounts converting from G to P classifications
  • Clarification of language relating to over 90 day exception for duplicate credits
  • Added language to indicate that Corrective Action Plans may be required
  • Added two additional “other considerations”: 1) VJF’s are required prior to purchases even if cost is being transferred to a federal award and 2) over 90 day CT journals should be posted within 5 business days
  • Added definitions of GMAS and PER

July 2016

  • Added separate sections for CT exempt journals of salary/fringe/tuition remission and non- salary transactions
  • Added clarification of the specific rules for faculty vs. staff salary CT exemptions
  • Clarified the different CT rules for journals relating to tuition remission and salaries vs. tuition support and stipends
  • Clarified that after salary is certified a CT is always required
  • Added an over 90 day exception for previously certified salary IF the transfer is within the same account group
  • Added information regarding documentation when transferring air travel costs from a non- federal account

October 2016

Changed language describing use of PER in CREW to refer to Grants Financial Dashboard in OBI.

September 2017

  • Add clarification of the specific rules for faculty vs. staff salary CT exemptions
  • Added clarification to the salary object code footnotes
  • Indicate that a corrective action plan may be needed for CT exceptions allowed due to sponsor requirements

October 2017

  • Added clarification to distinguish requirements for CTs relating to Salary & Fringe (Section I) and Stipends (Section II)
  • Combined the responsibilities of Grant managers and Department/Local level managing units
  • Other minor edits for clarifications

December 2017

  • Added clarification on salary journal exemptions to correct period of work performed and HUID as well as reflect that salary journals that affect tax or fringe benefits should be done in coordination with the school/tub payroll office (Section I.1)

February 2018

  • Revised footnote 1 to clarify that the “original transaction date” in the GL is determined according to the “effective date” in the OBI Transaction Listing.

July 2018

  • Changes represent a major revision to the format of the policy, addition of exceptions section, development of separate procedures, updated summary flowchart, and revised Cost Transfer Form.  The policy changes are:
    • Increased original single direct cost transaction exemption threshold from $500 to $1000
    • No requirement for Cost Transfer Form when transacting within the same sponsored award under certain criteria as outlined in the Cost Transfer Policy section (previously required if transacting across account groups)