When a cost transfer is processed near the termination of a project, that is usually the way an auditor will interpret the need for the transfer. The following guidelines are provided to ensure cost transfers are proper and authorized. The allowability of a cost transfer improves when the error is corrected within a reasonable time period. If at all possible, avoid cost transfers at the end of the project. Proper Explanation Required.
Departments are ultimately responsible for the justification of the cost transfer.
The reason stated on the transfer should state in detail how the error occurred, why the transfer is required, and how the expenditure relates to the project. Statements such as 'to correct error' or 'clerical error' are not sufficient to withstand an audit. For cost transfers done on-line, explanations should be included in the text on both the cost transfer journal voucher and the original Banner document. This will reduce the chance that the same cost transfer is made more than once. Required Supporting Documentation.