Responsible Office: Division of Sponsored Program Administration
Originally Issued: September 2003
Revised: Not Applicable
The purpose of this policy is to provide guidelines on the proper tracking and reporting of cost sharing.
2.1 Cost sharing is the portion of project expenses that is not reimbursed by the sponsor. Federal sponsoring agencies have required cost sharing since 1966. OMB Circular A-110 requires that in order to qualify as cost sharing, a cost must meet the following criteria:
- It must be verifiable in the Institution’s records
- It cannot be used as cost sharing on another project or program
- It must be necessary and reasonable for proper and efficient accomplishment of the project or program objectives
- It must be allowable under OMB Circular A-21 (the cost must qualify as a direct cost)
- It cannot be paid by the Federal Government under another award, except where authorized by Federal statute
- The cost sharing commitment must conform to other provisions of A-110, as applicable
- Un-recovered indirect costs may be included as cost sharing only with prior approval from the awarding agency.
2.2 There are three categories of cost sharing: mandatory, voluntary committed and voluntary uncommitted.
- Mandatory cost sharing is cost sharing that is required on a specific grant or contract by the terms of the agreement or by the sponsor’s specific requirement.
- Voluntary committed cost sharing is cost sharing that was not required by the sponsor, but is included in the proposal by the Principal Investigator either in the budget or in the narrative.
- Voluntary uncommitted cost sharing is a contributed resource that is not included in the proposal or award.
Cost Sharing has a significant financial impact on the department providing the funds and on the Institution as a whole. Committed cost sharing (mandatory and voluntary) must be tracked and accounted for separately from other Institution funds and it must be included in the “Organized Research” base when calculating the Institution’s Facilities and Administrative (indirect cost) rate. Because cost sharing can reduce the F&A rate, commitments should be kept to a minimum or only applied when required by the sponsor.
Cost sharing commitments begin with the proposal. They should be indicated on the Routing Sheet and in the budget submitted with each proposal to an external sponsor.
4.1 Cost sharing commitments will require approval by the Department Chair and Dean’s Office.
4.2 Charges will be recorded against the sponsored and cost share accounts as directed by the Principal Investigator, on Personal Action Requests, check requests, etc. Principal Investigators and their departmental administrators are responsible for monitoring the activity in their cost sharing accounts to ensure that charges are allowable, allocable and reasonable. Principal Investigators are also responsible for ensuring that all cost sharing obligations are met.
4.3At the end of an award the Division of Sponsored Program Administration will verify that the cost sharing commitment was met.