University of Minnesota  Administrative Policy

Offering Cost Sharing (including Matching and In-Kind Contributions) on Sponsored Projects

Policy Statement

The University encourages, supports, and values the efforts of faculty to obtain external funding for their research endeavors. The University wants to minimize its cost sharing on sponsored projects. The University will only offer cost sharing if it is mandated by the sponsor or needed to accurately reflect the resources required to conduct the project. Core cost sharing principles include:

  • If cost sharing is mandatory, Principal Investigators (PIs) must include it in the proposal budget and are expected to meet that commitment.
  • Cost sharing cannot include contributions from other sponsored projects, unless they are specifically authorized by both sponsors.
  • An expense used as cost sharing may be used only once (e.g.; designated as a match on one award cannot also be used as a match on a second award).
  • Costs used to satisfy cost sharing commitments are subject to the same policies as other costs under the approved budget, unless they are authorized specifically by that sponsor. Thus, to qualify for cost sharing all charges must be:
    • allowable under University and sponsor policies and the terms of the award;
    • allocable as a cost to the project;
    • reasonable and necessary for performance of the project; and
  • All effort commitments must be met regardless of funding source. If effort is committed as cost sharing, it must be approved by the department head at the time of the proposal. All effort on the project should be included as a direct cost in the proposal budget unless authorized specifically as committed cost sharing and all effort commitments must be met.

Because cost sharing typically involves use of departmental or collegiate funds, department heads or deans must approve the commitment at the time of proposal and may impose limits on the amount of cost sharing committed by faculty and staff in their units.

Units who have committed cost sharing (including matching and in-kind contributions) must conform to University and federal policies and the cost sharing must be verifiable through documentation that is retained according to the University's record retention obligations for the award. Committed cost sharing other than in-kind contributions must be recorded through EFS (PeopleSoft Enterprise Financial System).

Reason for Policy

Because faculty are given latitude in developing the scientific and financial aspects of their proposals, it is essential that the use of cost sharing does not overburden departmental and/or other University resources. Excessive or unnecessary cost sharing can impact the recovery of facilities and administrative (indirect) costs as well as the negotiated institutional facilities and administrative (indirect) cost rate.

Sponsors and auditors must be able to verify that funds committed as cost sharing have been provided. Therefore, this policy and its procedure have been developed to ensure that cost sharing is properly included in proposals and reported to sponsors.

Contacts

SubjectContactPhoneEmail
Primary Contact(s)April Coon612-624-7021[email protected]
Project administrationSPA Grant Administrator612-624-5599 
Effort certificationEffort Helpline612-625-7824 
Responsible Individuals
Responsible Officer Policy Owner Primary Contact
  • Vice President for Research and Innovation
  • Associate Vice President for Research and Innovation, Administration
  • Director of Sponsored Financial Reporting
  • April Coon
    Director - Sponsored Projects Administration

Definitions

Committed Cost Sharing

Mandatory or voluntary cost sharing quantified in the proposal budget, budget justification, or stated in award documents.

 

Cost Sharing

The portion of project costs not paid by the sponsor. The term includes cash contributions, in-kind (non-cash) contributions, and matching funds.

 

Effort

The proportion of time spent on any activity and expressed as a percentage of the total professional activity for which an individual is compensated by Institutional Base Salary. Total effort for an employee must equal 100% (a margin of error of one percent (+/- 1%) is acceptable due to rounding). An individual's total time compensated by Institutional Base Salary serves as the basis for determining their total effort.

 

In-Kind

Non-cash contributions contributed by a third party, such as when individuals at another organization volunteer their time, equipment, or facilities.

 

Mandatory Committed Cost Sharing

Cost sharing that is sponsor-driven and required as a condition for proposal submission. Upon receipt of an award based on a proposal that included mandatory cost sharing in the budget/budget justification, the cost sharing becomes "committed" and an obligation that must be fulfilled.

 

Matching

A percentage or dollar equivalency relative to the agency-provided budget. For example:

  • A 1:1 match would require $100 of University cost sharing for every $100 received from an agency.
  • A 30% match would mean that of a total budget of $100, the agency would provide $70 and the University would need to cost share $30.

Nonreportable

Committed cost sharing, other than in-kind contributions, where the sponsor is silent or indicates it is not reportable and must still be documented by the department in EFS.

 

Reportable

Committed cost sharing that must be documented by the department in EFS and reported to the sponsor by SFR.

 

Voluntary Committed Cost Sharing

Cost sharing specifically pledged voluntarily in the proposal's budget/budget justification or the award that becomes a binding requirement of the sponsored project. Upon receipt of an award based on a proposal that included voluntary cost sharing in the budget/budget justification (whether or not the agency explicitly calls out the cost sharing), the cost sharing becomes "committed" and an obligation that must be fulfilled. 

 

Voluntary Uncommitted Cost Sharing

Additional departmental resources (i.e. equipment or effort) provided to the project that are not pledged in the proposal or required in the award and therefore subsequently not stated on award documents. This type of cost sharing is not tracked (e.g., in a cost share chartfield string) nor included as project-related effort in the Pl's effort statement. Instead, that effort becomes part of the Pl's non-sponsored activities for the University. Note, however, that if a Pl chooses to use voluntary uncommitted cost sharing to fulfill a sponsor requirement (such as to meet a required effort obligation), then this must be treated the same as voluntary committed cost sharing.

 

Responsibilities

Principal Investigator (Pl)

  • When developing a proposal, must:
    • Understand the cost sharing requirements that are outlined in the sponsor's program announcement.
    • Know the University’s core cost sharing principles.
    • Consider all resources required to complete the project's objectives, including own effort, and budget accordingly.
    • Indicate committed cost sharing and obtain appropriate approval.
    • Whenever in-kind funds are committed from sources outside the University, obtain documentation of that contribution from a representative able to legally bind the source of those funds and attach it to the proposal.
  • At time of award or when cost sharing is later committed, request SPA establish an EFS cost share chartfield string to track cost sharing.
  • Certify the proper percentage effort on sponsored projects, including cost sharing, commensurate with the actual effort expended, up to the effort level committed.
  • Ensure that committed cost sharing requirements are met and that documentation is in accordance with University guidelines and sponsor policy.

Department Administrator

  • Assist PI with notifying the grant and contract officer in SPA when committed cost sharing is not listed or listed incorrectly on the NOGA (Notice of Grant Award).
  • Ensure that committed cost sharing requirements are met and that documentation is retained in accordance with University guidelines and sponsor policy.
  • Ensure that documentation for in-kind commitments has been provided to SFR for reporting purposes and retained within department project files.
  • Assist PI and Department Head in fulfilling their cost sharing responsibilities, as needed.

Department Head

  • Confirm that the department can provide funds to meet the committed cost sharing and provide a nonsponsored chartfield string.
  • Review proposal to verify that proposed cost sharing commitments are correct and approved.
  • Evaluate the necessity and appropriateness of committed cost sharing.
  • Define a process that ensures increases in committed cost sharing are reviewed and approved within the department.
  • Verify that matching/in-kind commitments are available and documented.

Dean

  • If necessary, approve cost sharing funds that come from sources outside the department.
  • Review the accuracy of the cost sharing/matching question at the time of proposal when there is a request to the Dean's office to provide matching funds.

Sponsored Projects Administration (SPA)

  • Review budget and budget justification to verify that proposed cost sharing commitments are correctly identified and approved at time of proposal.
  • Resolve discrepancies between proposed cost share and sponsor's award.
  • Review award terms and conditions and ensure that committed cost sharing is identified and communicated to the department at time of award.

Sponsored Financial Reporting (SFR)

  • Submit reportable cost sharing as required by the sponsor.
  • Inform department administrator and Pl if the reportable cost sharing commitments have not been met at time of reporting.

Vice President for Research and Innovation

  • As necessary, approve cost sharing.

Related Information

History

Amended:

June 2023 - Comprehensive review.

  • No requirement changes
  • Modified some terminology:
    • “Grant Administrator (GA)” to “Grant and Contract Officer (GCO)”
    • Replaced “PRF” with “at proposal time” in anticipation of MN-GEMS launch
  • Clarified ties to effort policy
  • Overhauled and combined the two procedures into one
  • Added a question to the FAQs about using the terms: "cost sharing," "matching," and "in-kind" about how these terms are used interchangeably

Amended:

December 2018 - Comprehensive Review. Minor Revision. Updated Policy Owner/Contact and Frequently Asked Questions to provide additional clarification, reflect U/M effort reporting period, remove OMB A-110 reference. Reorganized/updated proposal and award time procedures, removed duplications.

Amended:

August 2014 – Comprehensive Review. Minor Revision. Updated definitions to use national norms (including 2 CRR 200).  Changed procedures to indicate that voluntary uncommitted cost sharing need not be tracked as project-related effort for any project personnel.  Updated Handling Cost sharing, Matching and In-Kind Contributions after Award Acceptance procedure for EFS.

Amended:

June 2008 - Updated information for EFS.

Amended:

December 2003 - Updated definitions. Clarified how SPA handles cost sharing on awards that do not receive full funding.

Amended:

Effective July 1, 2002 - Added oversight functions for departmental staff and central administrators. Reformatted award-time procedure into step-by-step process. Clarified policy that while faculty and senior researchers (principal investigators without faculty rank) do not have to certify uncommitted cost-shared effort, all other project personnel do. Added information regarding changing cost sharing during the project period. Added Frequently Asked Questions.

Amended:

July 2001 - Changed requirement that PIs must show 1% effort. Differentiated between mandatory and voluntary and between committed and uncommitted. Updated Related Information, definitions, responsibilities and procedures to reflect changed requirement.

Effective:

October 1998

Supercedes:

Guidelines for Cost Sharing and Matching on Sponsored Projects, dated 8/96.