Cost Sharing Reporting and Documentation

Examples of Cost Sharing Include

• Purchasing equipment or supplies using University resources
• Committing faculty or staff effort at no cost to the sponsor
• Program income, if approved by sponsor

Cost sharing can be mandatory or voluntary. Mandatory cost sharing is usually addressed in the sponsor’s RFP or application. Voluntary cost sharing is usually considered when it increases the chances of funding or deemed beneficial to the University.

The University’s objective is to obtain maximum cost reimbursement from its sponsors. Voluntary commitment to cost share may have an adverse effect on the University’s recovery of Facilities and Administration (F&A) costs. Such a commitment reduces the PI/PD’s flexibility to conduct other research (because their effort is pledged to a specific project) and also increases the requirements for auditable recordkeeping.

Note: When an award is received in which cost sharing (whether mandatory or voluntary) is proposed, the cost sharing becomes a binding commitment and is subject to audit. 

After a Cost Share Commitment is Made

When an institution commits to sharing in the cost of a sponsored project, it assumes an obligation to the sponsor and accepts certain responsibilities for tracking and reporting cost share expenditures. The fulfillment of cost-shared effort commitments is reflected in the Personnel Activity (PAR), or effort report, by indicating percentages of work performed by staff members on sponsored projects. Such reports include effort that was performed for sponsored projects, but not directly charged to the grant or contract account.

Cost Sharing Contributions May Be Made In Two Ways

• In-Kind Contributions: In-kind contributions are those wherein a value of the contribution can be readily determined, verified and justified but where no actual cash is transacted in securing the good or service comprising the contribution. Two examples of in-kind contributions are: (1) The donation of volunteer time valued at a rate that would be reasonable for the time devoted had the volunteer been compensated for the time. (2) The donation of non-institution space where such space would normally carry a fee for purposes other than supporting this particular project.
• Cash Contributions:  Cash contributions differ from in-kind contributions in that an actual cash transaction occurs and can be documented in the accounting system. This includes allocation of compensated faculty and staff time to projects. Although it is easy to mistake the allocation of compensated faculty/staff time as a donation or as In-Kind because the faculty or staff member would be compensated regardless of the advent of the sponsored project, the value is the result of a cash transaction and should be treated as a cash contribution. Other examples of cash contribution include the purchasing of equipment by the institution or other eligible sponsor for the benefit of the project requiring cost sharing.

Both in-kind AND cash contributions must be:

• Verifiable from the grantee's records
• Excluded as contributions for any other federally-assisted program
• Necessary and reasonable for proper and efficient accomplishment of project objectives (i.e. within the scope of the project as specified)
• Unpaid by the federal government under another assistance agreement unless authorized under the agreement, laws, and regulations to which it is subject
• Charges incurred as project costs

Unacceptable Cost Share Expenditures

• Costs funded by other sponsored programs unless approved by sponsor
• Costs pledged as cost sharing for another funded project
• Otherwise unfunded salary effort that is outside of the contractual appointment (i.e. unfunded summer months for faculty with nine month academic appointment)
• Costs that are financed through F&A (indirect) costs recovery, except those paid through the Grants and Contracts Incentive Funds Program (PDF)
• Costs of construction or renovation of University buildings (except in rare circumstances and with the express sponsor prior approval)

PI/PD Responsibilities in a Cost Sharing Commitment are to ensure

• Funds are provided for cost-shared direct costs
• Verification of the cost sharing commitment is provided at the time the proposal is submitted via the Proposal Routing and Approval Form (PRAF)
• Salary and non-salary cost sharing are properly identified in the University records
• Cost-shared expenses for each project are accounted for in separate University accounts
• Allowable costs are timely and accurately charged to the appropriate cost sharing account
• Expenditures on cost sharing accounts are certified
• Records for cost sharing accounts are retained for the same time period as the records for related sponsored agreement