skip to main content
Office of Accounting
University of Mississippi

Guidelines for Expense Transfers

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 90 days immediately preceding the date of the transfer request, as long as the department provides adequate justification. Transfers prior to the 90-day period are only allowed in extraordinary situations and only upon approval by the Accounting Office. Transfers processed on federal projects are always subject to review by our federal auditors. Please refer to the Activity Report Policy for additional information on payments from federal projects.

Transfers that are normally acceptable:

  • Correction of error in recording an original transaction in the financial records.
  • Transfer when prior written approval has been received from the sponsor.
  • Transfers between accounts funded by more than one funding source for closely related work, provided the project director fully explains and justifies the transfers.

Transfers that may be allowable but raise serious questions:

  • Transfers that bring a project account to zero.
  • Transfer of salary expense previously certified on activity reports or wage expense previously certified on pay documents.
  • Transfer of an expense to a general fund account from other funds.

Transfers that are generally unallowable:

  • Transfer of an unidentified expense to a project account.
  • Transfer of an expense to a project account if the expense was incurred before or after the project period.
  • Transfer of an expense to a project account from an account that has a deficit balance.
  • Transfer processed simply to absorb the remaining balance of an account.
  • Transfers that do not indicate how the expense is appropriate to the receiving account or do not explain why they were not correctly charged in the first place.
  • Transfer of an expense that was originally recorded over 90 days previous to the request date, or requested after the project end date.
  • Transfer of expense to or from general fund accounts after fiscal year end.

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.