Policy for Cost Sharing on Sponsored Projects
Cost sharing is a commitment made by the University
towards the total cost of a sponsored project. These costs represent actual
expenditures above and beyond what a department is already spending on their
operations. The expenditures must be identifiable and made within the start and
end dates of a grant. The use of existing university property or equipment does
not represent cost sharing.
Mandatory Cost Sharing: Cost sharing which is
required by the sponsoring agency as a condition of the award. This type of
cost sharing must be included in the proposal budget and is usually included on
the notice of award. It must be fully documented in the University's accounting
records through the grant account.
Voluntary Committed Cost Sharing: Cost sharing
which is not required by the sponsoring agency, but which has been committed by
the University. If this type of cost sharing is included in the proposal
budget, it must be fully documented in the University's accounting records. A
common example of voluntary cost sharing is when a PI commits a percent of
effort to the project in the budget without any corresponding request for
Voluntary Uncommitted Cost Sharing: Cost sharing
that is not committed or budgeted for in a sponsored agreement. It need not be
tracked for accounting purposes or reported to the sponsor. Voluntary
uncommitted cost sharing commonly results from cost overruns on a project or
from PI effort exceeding the amount proposed.
Effects of Cost Sharing
The University policy is to provide cost sharing only when
required by agencies. In limited cases, cost sharing will be considered and
subject to approval if it is considered necessary due to the competitive nature
of the proposal. University cost sharing entails the reallocation of department
or University resources towards a specific sponsored agreement. Because
resources can be scarce, it is important not to over-commit funds when the
sponsor does not require them and when the project can be completed without
It should also be noted that cost sharing commitments
reduce the University's facilities and administrative rate (indirect cost rate)
as it is considered a part of the research base when calculating the rate.
In order to be an allowable cost sharing expense,
costs must comply with all of the following:
- It must be necessary, reasonable, and directly related
to the project objectives.
- It must occur within the start and end dates of the
- It must be verifiable in the University's accounting
or time & effort records. The tracking, reporting and certifying of cost
sharing are subject to audit.
- It must be an allowable expense under Federal
regulations (A-21) and the terms of the sponsoring award.
The following would be considered unallowable cost
- Administrative salaries, services and supplies which
are not permitted by the sponsor as they are included in our F&A rate.
- Existing University equipment or facilities.
- Salary dollars above a regulatory cap.
- Expenses used as cost sharing in any other sponsored
- Federal dollars from another award.
- Unallowable costs as defined in A-21, section J found
Relationship to Effort Reporting
When a faculty member's time is pledged as cost sharing in
a proposal, the pledge should be reviewed by the PI, the department and Academic
Affairs to assure that the contribution to the project still is within the 100%
effort distribution. Since all cost sharing (mandatory & voluntary) must be
fully documented, the PI must include and certify effort towards the project
that was not directly charged, on their monthly time & effort report. This time
& effort report is the University's means of verifying that cost sharing was
performed as promised and commitments were met.
Third Party Cost Sharing
If a sub-awardee makes a cost sharing commitment in their
proposal budget, the University will require the sub-awardee to maintain
records, report and certify this cost sharing in their invoices to the
University. Invoices without cost sharing details and certification will not be
paid. The PI must approve these invoices for payment, indicating that the
contribution was received.
If committed cost sharing is provided by a third party who
is not a sub-awardee, the PI will gather documentation on the third party's
letterhead that the cost sharing occurred and its value. Donated supplies,
equipment, buildings, and other contributions should be valued at the current
market value. Donated services should be valued on rates paid for similar
Changes in Cost Sharing Commitments
The actual effort and other costs required to accomplish
the goals of a sponsored project might differ from what was proposed and
awarded. If changes to the amount pledged for cost sharing are required, a
revised cost sharing plan should be submitted to grants accounting for
concurrence and forwarded to the awarding agency for approval. The University
is bound to meet cost sharing requirements. If it does not, the award will be
The University is responsible for demonstrating that it
has met mandatory cost sharing commitments. In order to do so, all shared
direct costs must be identified by the PI as part of the proposal preparation
and approval process. The proposal budget should show committed cost sharing
and its sources including account numbers. Once awarded, it is preferable
to fund the cost sharing commitments when the grant account is established.
Grants accounting is responsible for reporting this cost sharing to sponsoring