6.5 Cost Sharing & Approval Requirements
The portion of the total sponsored project costs not funded by a sponsor is considered to be "cost sharing". The University discourages voluntary committed cost sharing when submitting proposals to an external sponsor and expects that all proposal submissions only include the minimum amount of cost sharing necessary to meet the sponsors' requirements.
Cost sharing in all forms is proposed and approved during proposal preparation in eProposal as part of the document summary sheet, and must be identifiable, verifiable and auditable. Resources committed to cost sharing may be used as cost sharing on only one project or program. Funds from any federal source may not be used as cost sharing on other federal awards. If F&A costs are defined as unallowable by the sponsor, then these costs tend to also be unallowable as cost share.
For most sponsors and programs, cost sharing is not a requirement in order to receive the award.
There are several types of cost sharing:
Mandatory Cost Sharing
Funding, either required by the terms and conditions of the award or by federal statute, that requires a University contribution toward the project as a condition of receiving the award.
While requests for mandatory matching are generally approved, last minute requests for matching funds are highly discouraged by the Office for the Vice President for Research, as they require that the budget for such requests be reviewed by both OSP and the VPR and that the necessary documentation be in place prior to submission.
Voluntary Committed Cost Sharing
A cost associated with a sponsored project and supported with University and/or other non-sponsored funds, which was identified in the proposal, but was not required or funded by the sponsor. Some common examples include:
- A percentage of effort of faculty or senior researchers included in a proposal budget or stated in the text of the proposal for which no compensation or only partial compensation was requested; and
- The purchase of equipment for the project, identified in the proposal, for which no funds or partial funds were requested.
The University does not typically cost share on a voluntary basis. A voluntary commitment of sponsor-uncompensated effort and/or other types of commitment should be made only where the competitive circumstances or perceived institutional benefit of receiving the award are deemed to be sufficiently strong warrant the commitment.
Approval for voluntary committed cost sharing should be discussed with OSP prior to seeking formal approvals.
A cost associated with a sponsored project and not funded by the sponsor, which was not committed in the proposal or in any other communication to the sponsor. This includes effort of faculty or senior researchers that is over and above that which is committed and budgeted for in a sponsored agreement. Some common examples include:
- Donated faculty effort on a sponsored project over and above the effort identified in the proposal or award; and
- Academic year effort on a sponsored project for which only summer salary was proposed, if the effort was not listed either on the budget page or in the body of the proposal.
The requirement by some sponsors that grant funds be matched in some proportion with funds from another party, either from the University or another sponsor. Matching may be in the form of actual cash expenditure of funds or may be an "in-kind" match, which is the value of non-cash contributions to the project. In-kind or matching contributions made by a party other than the University require documentation from that third party supporting the use of the funds as in-kind/matching.
Once cost sharing resources are committed, it is imperative that the University document the fulfillment of its responsibility to account for cost sharing commitments.
The most common method of tracking cost share at award, especially when there is a cost sharing cash outlay, is the preparation of a "matching" project. The assigned project numbers are subsequently used to track committed shared costs within the University's accounting system.
The Dean, Chairperson, and/or Principal Investigator provide source chartfields for all cash matching as agreed upon and documented in the document summary sheet. If cost sharing commitments exist on the part of the University President or a Vice-President, OSP will need the appropriate chartfields to which the committed shared costs are charged. Project numbers will not be set up until all matching requirements have been identified and all approvals are obtained.
Note: Proposals which ask for no Principal Investigator or Senior Personnel salary support implies cost sharing (minimum of .05 FTE). Implied salary support cost-sharing constitutes a cash outlay, and the Principal Investigator is therefore required to provide a source chartfield at award to account for percent of effort committed.
Sponsored Projects and Research Accounting may jointly decide to use alternative methods of tracking cost sharing when source chartfields are not the appropriate mechanism for managing cost sharing commitments.
Mandatory, voluntary committed cost sharing and in-kind/matching must be identified, administered, and accounted for consistently. Cost sharing can also be provided in the form of salary and accompanying benefits, materials and supplies or even by waiver of F&A costs; the source of these funds are 1000, 2000, or 6000 type activities.