It is essential that all costs are recorded accurately and completely, so timely action to make reclassifications is important. The project director should submit a memo to Accounts Payable after notifying the Grants and Contracts Accountant. Reclassifications that occur near the end or after the ending date of a program may be presumed by federal auditors to have been made simply to cover overexpenditures or to use up residual funds. They will disallow these costs unless there is adequate documentation relating the transferred charge to the receiving fund. Most sponsors will list circumstances requiring prior approval in the award document, or refer to a larger standard manual for those conditions requiring prior approval.
Prior approval is provided in writing.
Even when a written approval is not required, the university highly recommends that project directors document in writing the request and receipt of prior approval by sponsors. Federal sponsors will normally require written prior approval for large equipment purchases, foreign travel, consultants and subagreements. Do not assume that a reference in a proposal to a specific action or purchase serves as prior approval.