Cost Sharing Guidelines
Link to Cost Share-at-a-Glance
I. Introduction
Some funding agencies require that the University participate in the total cost of the project. Cost sharing refers to the portion of the project or program cost that is not borne by the sponsoring agency. When cost sharing is required by the sponsor, once an award is made all cost sharing commitments in the proposal are considered to be mandatory, and as such, represent binding obligations to the University, the Principal Investigator / Project Director (PI/PD) and the Foundation. The cost sharing principles in this document apply to all grants, whether federal or non-federal.
The practice of the University/Foundation is to make a cost sharing commitment only when required by the sponsor or by the competitive nature of the award and then to cost share only to the extent necessary to meet the specific requirements of the sponsored project. The cost sharing commitment must be recorded on the "Sponsored Projects Approval Form" and in the proposed budget, and must be documented and approved by the responsible University and Foundation officials on the Pre-Award Request for Cost Share form..
Throughout the project's life, the PI/PD and the University must provide sufficient documentation to the Foundation to substantiate the actual cost sharing contribution. All documentation on cost sharing is subject to audit, internally, by the Chancellor's Office, and by the granting agency.
These guidelines were jointly developed by the Foundation and the Office of Research and Sponsored Projects.
II. Definitions
Approval signature. The (University) signature of the person who has authority to commit the stated resource.
AVPR (Associate Vice President for Research). The university official in charge of the Office of Research and Sponsored Projects, in the division of Academic and Student Affairs.
Cash contributions. Cash outlay from non-federal third parties, such as corporations, foundations, private parties, etc.
Commitment period. The dates during which the resources will be available to the project, whether or not this coincides with the project performance dates.
Cost sharing. The sharing of actual program or project costs. It is that portion of a project cost not reimbursed by the sponsor. In this document "cost sharing" will be used to refer both to cost sharing and to cost matching, unless otherwise stated.
Cost matching. A specific form of cost sharing, in which the institution provides additional resources (usually cash) for the project expenses in some proportion to the amount to be externally funded. In this document "cost sharing" will be used to refer both to cost sharing and to cost matching, unless otherwise stated.
F&A (facilities and administration). See indirect costs. F&A represents the expenses of doing business that cannot be directly charged to a particular grant or contract and are necessary for the general operation of the organization and project, such as use of space/facilities, utilities, and central administrative services.
Sponsored Projects Approval Form. The internal routing sheet to be completed by the PI/PD, who fills in the information request for the grant proposal, and then obtains the requisite campus approval signatures. A separate request for cost share approval form is attached when cost share is requested.
Grants development specialist. Provides pre-award services including funding searches, proposal and budget development, and review and submission of proposals. Provides assistance in documenting request for cost share.
Grants post-award administrator. Responsible for administering the external funds associated with each project received by the Foundation. Works with PIs to facilitate the appropriate use of the financial resources available to them and serves as liaison between the project and the sponsoring agency. Assists in the documentation of cost share commitment on the Post Award Assignment of Cost Sharing Commitment form.
Indirect costs (see F&A). The indirect cost rate is negotiated with the federal government every two years. The grants development specialist will provide the current rate. These funds are used to offset the costs associated with research and sponsored projects which cannot be specifically attributed to an individual project.
In-Kind contributions. The value of all non-cash contributions, including services and property, provided by the grant recipient (referred in this document as recipient in-kind contributions) and/or non-federal third parties (referred to in this document as third party in-kind contributions). Potential third parties include non-federal public agencies and institutions, private organizations and individuals.
OMB Circular A-21, Cost Principles for Educational Institutions. Establishes principles for determining the costs that apply to research, training, and other sponsored work conducted under grants, contracts, and other agreements between universities and the federal government.
OMB Circular A-110. Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education. The primary source for determining the allowability of cost sharing on grants and agreements between the federal government and institutions of higher education. Subpart C, Section 23 of that circular provides definitions and guidelines for the computation of cost share and match.
PI/PD. Principal investigator and project director are the terms used to identify the faculty or professional staff member who has a long-term commitment to the University, and who is actively engaged in extramural grant writing/support. The PI/PD is the primary programatic contact with the funding agency and is responsible for the implementation of the research or project.
Pre-Award Request for Cost Sharing Approval form. The form used to identify proposed cost share items and obtain approval signatures. This form is an addendum to the Sponsored Projects Approval Form when cost sharing is required to be committed for the grant.
Post Award Assignment of Cost Sharing Commitment form. The form used to confirm cost share after the award is made. This form includes account numbers to which cost share is to be charged and requires administrative signatures at the time of commitment. This form is an addendum to the Pre-Award RCS Approval form.
III. Cost Sharing Approvals
A. General Guidelines for Approvals
Appropriate university administrators must specifically authorize their funds and/or resources to be used for cost sharing. Outside sponsors must specifically authorize their funds to be used for cost sharing on letters of commitment that specify the dollar value. The budget and/or budget justification must show which costs will be born by the project, and which costs will be borne by the sponsor of the cost shared items. All documentation on cost sharing is subject to audit in accordance with the sponsor’s policy.
The grants development specialist will assist PI/PDs in determining whether proposed cost share meets the guidelines. PI/PDs are cautioned not to imply cost sharing that is not included in the budget because the University, PI/PD and Foundation may be held responsible for implied cost sharing. For example, the following statements in the proposal narrative or budget justification would be considered cost sharing:
Dr. X will devote 20% of her time to the project at no cost to the agency.
The department will purchase a cryofreezer in support of Dr. X’s project.
The following statements would not be considered cost sharing:
Dr. N will be providing expert advice and consultation to the project.
Dr. N has access to the departmental cryofreezer.
All cost sharing must adhere to the following criteria as outlined in OMB Circular A-110, in addition to CSUSM policies:
Are verifiable from the recipient’s records
Are not included as cost sharing contributions for any other federally assisted project
Are necessary and reasonable for proper and efficient completion of the project or program objectives
Are allowable under the applicable cost principles (OMB Circular A-21, or other sponsor regulations if the sponsor is non-federal)
Are not paid by the Federal Government under another award, except where authorized by federal statute to be used for cost sharing or matching
B. Procedures for Cost Sharing Approvals
During the proposal preparation process, the PI/PD will:
Determine the need for cost share as documented in Sponsor’s guidelines or policy.
Consult with the associate vice president for research (AVPR) and the appropriate department, college, or other office to determine the cost sharing method and amount to be used, and the sources of all funding or in-kind contributions.
Review the cost-sharing plan with the Foundation grants development specialist and resolve any questions concerning appropriateness and allowability.
Fill out the Pre-Award Request for Cost Sharing Approval form, which is then routed for approvals with the Sponsored Projects Approval Form.
Upon notification of award:
The PI/PD will work with the Foundation grants post-award administrator to review the cost share commitments and fill out the Post Award Assignment of Cost Sharing Commitment form..
If the sponsor awards fewer funds than proposed and the project scope remains the same, it will be necessary to show cost sharing at the original rate. If the scope is also reduced, cost sharing may still be necessary but should be reduced in proportion to the amount of sponsor funding. PI/PDs must notify the appropriate administrator who must again approve the new cost shared amount.
If the approved cost shares are no longer available, the post award administrator will work with the AVPR to obtain a written commitment from the appropriate administrator to assume full financial responsibility for the cost sharing.
Without appropriate documentation, the Foundation may not be able to accept the award.
IV. Allowable and Unallowable Cost Share, Valuation, and Documentation
Allowable Cost Share - Please refer to Appendix A: Cost Share At-A-Glance
The preferred form of cost sharing uses “direct costs” derived from gifts, endowments, and other non-sponsored sources, such as salary and wages, lab supplies, curricular materials, equipment, and travel. In the case of equipment or space, its use value can be counted if the purpose of the award supports the activities that require the equipment or space.
Under the following special circumstances, and with the approval of the Foundation’s Executive Director, F&A may be committed as cost sharing:
The sponsor’s policy does not allow the University to recover indirect costs at the full federal rate
The sponsor will allow the use of unrecovered F&A to satisfy their cost share requirements
Approval has been given by the appropriate college dean and the Associate Vice President of Research for use of unrecovered F&A.
Unallowable Cost Sharing
Contributions designated for other projects
Federal funds on federally funded projects, unless specifically approved by both federal funding agencies
Items that cannot be verified
Office supplies, postage, phone and copying costs are strongly discouraged because of the difficulty documenting such expenses
Expenses that are normally unallowable for reimbursement, such as alcohol and entertainment, memberships in community organizations, and, in some cases foreign travel, as specified in Section J of OMB Circular A-21.
Indirect costs associated with the cost shared expenses
C. Valuation Methods
Values for recipient and third party contributions of services and property shall be established in accordance with applicable cost principles (OMB Circulars A-21 and A-110). This may require verification of the value of the remaining life of the property or its current fair market value.
D. Documentation of Cost Share
Cost share expenditure documentation must be provided during the life of the award to reflect actual expenses of the project, as well as any negotiated changes in terms, conditions or scope of project. PI/PD must ensure that documentation is provided at the following times:
At the proposal stage (Pre-Award Request for Cost Share )
At the award stage (Post Award Assignment of Cost Sharing Commitment)
At the end of each semester (purchase orders, check requests, etc.)
At the end of the award
Federal regulations require full accountability for costs committed in the fulfillment of sponsored programs. If a sponsor requires financial and/or narrative reports on total project costs, it is the responsibility of the PI/PD, to monitor, track, and assist the Foundation Office of Grants and Contracts with the reporting requirements. It is important that PI/PDs forward supporting documentation for all types of cost sharing to the Foundation office of grants and contracts. The post award administrator will assist the PI/PD with this process and its timing.
V. Disallowed Costs and Other Liability Issues
A. Disallowed Cost Sharing
The Foundation will review all cost-sharing documentation and will seek to resolve as quickly as possible with the PI/PD any problems that are identified. Responsibility for covering costs that are subsequently disallowed by the Sponsor shall be allocated in accordance with the following principles:
If the Foundation, PI/PD Dept., and college approved the costs, the Foundation and the Project Director’s department or college shall be equally responsible for covering costs.
If the Foundation did not approve the costs, the Project Director’s department or college shall be solely responsible for covering the costs.
B. General Liability
A general liability policy provides the CSUSM Foundation with coverage for most activities of the Foundation, its employees, and volunteers. The general liability policy will not provide coverage for activities that are not considered in the scope of the project or the course of employment.
Revised 7/28/04