Cost Sharing Policy & Procedures

Overview

The purpose of this policy document is to ensure compliance with Federal costing and Cost Sharing requirements as set forth in 2 CFR § 200.306 and OMB Clarification of Uncommitted Cost Sharing (OMB M-01-06).  The document establishes procedures for recording cost shared expenditures in the University's accounting system. The policies described in this document are effective for new and renewal awards received on or after July 1, 2003.

Definition

Cost sharing is that portion of the total project cost of a sponsored agreement that is contributed by the University and/or other non-federal sources but not reimbursed by the sponsor. It may include salaries, fringe benefits, general expenses, F&A (indirect) costs or third party contributions.

Mandatory cost sharing is required by the sponsor as a condition of obtaining an award. The requirement for such cost participation is set forth in project announcements or guidelines issued by the sponsor.

Voluntary committed cost sharing is that commitment by the University to participate in the cost of a project that is not required by the sponsor, but which is included voluntarily in the University's proposal to the sponsor.

  • If cost sharing (whether mandatory or voluntarily committed) is subsequently accepted by the sponsor as a condition of the award, the University must maintain accurate records to verify that these funds have been expended toward the project's objectives.

Voluntary uncommitted cost sharing is not covered by this statement and should not be recorded in the University's accounting system. It is defined as "staff and faculty effort that is over and above that which is committed and explicitly budgeted in a sponsored agreement."

Cost Sharing Commitment on Proposals and Awards

When a proposal includes cost sharing, it must have the approval of the unit that provides the resources. The Principal Investigator (PI) is responsible for ensuring that:

  • Funds are identified for cost sharing at the time the proposal is submitted.
  • Exactly one cost sharing account can be associated with one grant account, but no cost sharing account can be associated with more than one grant account.
  • Third party contribution is properly documented.
  • Allowable, allocable, necessary and reasonable costs are incurred during the effective date of the award and are timely and accurately charged to the appropriate cost sharing account.
  • Cost sharing cannot be paid from federal funds unless specifically authorized.
  • During the life of the project, prior approval from the federal sponsor will be requested when effort committed by the PI is to be decreased by 25% or more. This applies to changes in committed levels of effort to be charged directly to the project, as well as to that which will be cost shared on the project.

Cost Sharing Documentation Procedures

Pre-Award Procedures

  • When a proposal includes cost sharing from University resources, the proposal routing form submitted through the Division of Sponsored Programs (DSP) may indicate the MFKs of the funding sources, include a detailed budget, or state the percent effort of key personnel if that information is not in the proposal budget. A cost sharing account is required for awarded projects. The cost sharing account request must be submitted to the Grant Accounting Office (GAO) within 30 days after the AAAN is sent to the PI / Department. To request a new cost sharing account departments should use the Request for GL Chartfields & WhoKeys application which is available to all GLDSS online users in Self Service – Business & Financial Systems. Currently the Grant/Program and WhoKey forms allow for a single value to be requested in the same transaction. If multiple values need to be established, they will need to be submitted as separate requests.
  • When a project is awarded with an amount different from the proposal budget, the PI must prepare a revised budget that includes information on key personnel effort committed to the project and may seek DSP assistance to revise the cost sharing if necessary. The PI will notify DSP and GAO of the change.

Post Award Procedures

  • A companion cost sharing account will be established as soon as the new cost share request created in Request for GL Chartfields & WhoKeys application has completed routing through the workflow. The cost sharing account will have a grant ID "3" and may be used for more than one fund.
  • GAO will monitor expenditures spent from the cost sharing account as well as from grant/contract account. Both resources should be spent as the project progresses. The cost sharing account like the externally sponsored account, will be closed 90 days after the end of the award period.
  • If cost sharing is not to be provided as proposed, or when effort committed by the PI is to be decreased by 25% or more of the total committed effort (grant account and cost sharing account), prior sponsor approval from the sponsor must be requested by the PI through DSP.
  • Allowable cost sharing may include: faculty, student or staff effort, fringe benefits, supplies, equipment, travel, other costs, subcontracts, tuition, the associated F&A and unrecovered F&A if approved by the federal agency, in-kind and third-party contributions. Existing University-owned equipment, university facilities or amounts in excess of a salary cap should not be used for cost sharing.
  • If cost sharing obligations are met by third-party, such as in-kind contributions (volunteer services), documentation in the form of a letter from the individual or organization should be obtained by the PI. Each letter should include: period of effort; amount and value of effort for each individual or labor category, breaking out salary and benefits; and a statement that the source of support for the effort is non-federal and not identified as cost sharing for another project. The PI must approve these letters, indicating that the contribution was received.
  • Donated supplies, equipment, buildings, land or loaned equipment or space, and other contributions should be valued at the current fair market value or in accordance with the applicable cost principles. The PI is responsible for providing documentation acceptable to GAO.
  • When cost sharing is required from a subrecipient, it should be documented on subrecipient invoices. GAO will not authorize final subcontract payments until cost sharing requirements are met. The subrecipient cost sharing requirement should be included in the subcontract budget submitted through DSP.
  • GAO will report to the sponsoring agency on cost sharing along with expenditure of sponsor funds as required by award terms.

Last updated: 12/22/2022