Definition

Cost sharing or matching on grants and contracts reflects the university’s contribution to the total costs of a sponsored research project. Cost sharing, therefore, represents the portion of the project costs not paid for by the sponsor. Mandatory cost sharing is required to be reported on the financial reports and to be supported through the accounting records.

General Information

Cost sharing should be limited to those situations where it is mandated by the sponsor. In certain circumstances, the University may determine that a contribution is necessary to ensure the success of a competitive award or competition. All cost sharing dollars require written approval from the source of the commitment.

The PI or department should refrain from making commitments voluntarily, as any promised cost share becomes part of the project cost, even if only mentioned in the narrative and not in the budget. Once awarded, the commitment will have to be tracked in the University’s accounting system and is subject to audit. Failure to comply with the cost-sharing commitment may result in a loss of funding.

Types of Cost Sharing

Typical examples of cost sharing include the percentage of personnel effort to be expended on the project; associated employee benefits; Graduate Research Assistant Tuition and un-recovered indirect costs. Costs incurred prior to the award are not allowable matches. Program income earned under an award may not count as cost sharing unless authorized by the sponsor.

Cash contributions are sources of funds from either internal or external sources.  University cost sharing is considered cash, as it can be accounted for from the University’s records. In-Kind contributions are non-cash contributions typically provided from outside sources such as donations of equipment, sub-contractors of time or facilities, or volunteer services.

Required Approval

Identification of the source of cost sharing is to be made at the time the proposal is submitted. Cost sharing/match accounts are to be set up for each grant as required and used to charge the cost sharing expense. These accounts should be established at the time the award is received and set up in the University’s KFS system.

For internal commitments, the “Cost Share Commitments” section on the Internal Proposal Review form should be completed and signed by the appropriate Unit/Department Head or Dean.

For external (“third party”) cost share, a letter of commitment signed by the contributing party’s authorized official is required.

Criteria for Cost Sharing Commitments

The Uniform Guidance  states that contributions, including cash and third party in-kind, are acceptable as cost-sharing contributions.

The cost sharing/match must meet a number of criteria to be accepted. The contribution must be:

• Verifiable from the recipient’s records. You will be asked to specify an account in the University’s accounting system (KFS);
• Not included as a contribution for any other project;
• Necessary and reasonable to accomplish the project’s objectives;
• Allowable under the Cost Principles;
• Not paid by the Federal Government under another award, except where authorized by Federal statute to be used as cost sharing or matching; and
• Provided for in the approved budget.

A periodic review of the financial statements will ensure that cost sharing commitments are being met and that unrestricted funds to cover the cost share commitment have been transferred in a timely manner to the cost sharing/match accounts. Transfers from unrestricted accounts to the cost sharing accounts should be made in the fiscal year in which the costs are to be incurred.