If a cost transfer involves co-mingled ineligible costs, what is required?

• A. Prior approvals are required when the transfer involves co-mingled ineligible costs.
• B. There is no need for approvals.
• C. Transfers are never allowed.
• D. Only a budget amendment is needed.

Answer: (A)

When a cost transfer involves co-mingled ineligible costs, prior approvals are required. Co-mingling means ineligible costs have been mixed with eligible ones, and moving those costs could affect how funds are allowed or allocated. The awarding agency must review and authorize any transfer that touches those ineligible amounts to ensure proper accountability and compliance with cost principles. Without that approval, the transaction risks improper charging and noncompliance with grant terms. A budget amendment by itself doesn’t substitute for the agency’s review and authorization, and saying transfers are never allowed isn’t accurate. The correct course is to obtain the necessary prior approvals before making the transfer.