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GIM 15 - Cost Transfer Compliance

Cost Transfer Compliance

In the examination of expenditure transfers, auditors are especially skeptical of both salary and non-salary transfers involving budgets in a deficit condition or those having unexpended funds at the expiration date. If such conditions exist, it is particularly essential to provide convincing evidence that the transfer is not for reasons of budgetary convenience.

Frequent or inadequately explained cost transfers raise serious questions about the propriety of the transfers themselves as well as the overall reliability of the department's cost distribution system. Departments must have procedures in place which ensure accurate accounting for costs and timely correction of errors.

The untimely discovery of errors could ultimately be an indication of poor internal controls within the department.