Printed on: 07/22/2017. Please go to http://policy.umn.edu for the most current version of the Policy or related document.

ADMINISTRATIVE POLICY

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

Responsible University Officer(s):

  • Vice President for Research (Interim)

Policy Owner(s):

  • Associate Vice President for Research Administration
  • Associate Vice President and Controller

Policy contact(s):

Date Revised:

August 2014

Effective Date:

October 1998

POLICY STATEMENT

The University wants to minimize its cost sharing on sponsored projects. Cost sharing will be offered by the University if 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 are responsible for including it in the proposal budget.
  • Cost sharing cannot include contributions from other sponsored projects, unless they are specifically authorized by both sponsors.
  • An expense used as cost sharing may only be used once (e.g.; a cost on a gift fund 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 specifically authorized by that sponsor. Thus, to qualify for cost sharing all charges must be:
    • allowable under University and sponsor policies and the terms of the NOGA;
    • allocable as a cost to the project;
    • reasonable and necessary for performance of the project; and
    • allowed as a direct cost on the project.
  • All effort on the project should be included as a direct cost in the proposal unless specifically authorized on a PRF as committed cost sharing.

Because cost sharing often involves use of departmental or collegiate funds, department heads or deans may impose limits on the amount of cost sharing volunteered by faculty and staff in their units.

Units who have committed cost sharing (including matching, and in-kind expenses) must conform to University and federal policies and the cost sharing must be verifiable through documentation.

REASON FOR POLICY

The University encourages, supports, and values the efforts of faculty to obtain external funding for their research endeavors. Faculty must therefore be given substantial latitude in developing the scientific and financial aspects of their proposals to increase their success in the highly competitive arena of sponsored projects. However, it is essential that the use of cost sharing does not overburden departmental resources and facilities and administrative (indirect) recoveries. Excessive or unnecessary cost sharing can also have the effect of reducing the facilities and administrative (indirect) cost rate.

Sponsors and auditors must be able to verify that funds committed to cost sharing have been provided. Therefore, this policy and its procedures have been developed to help faculty properly include and report cost sharing, and to indicate when the approval of the department head, dean or other administrators is required.

PROCEDURES

FORMS/INSTRUCTIONS

APPENDICES

FREQUENTLY ASKED QUESTIONS

CONTACTS

Subject
Contact
Phone
Fax/Email
Primary Contact(s)
612-624-1648
Project administration
Grant Administrator, SPA
 
Effort certification
Effort Helpline
612-625-7824
 

DEFINITIONS

The terms "cost sharing," "matching," and "in-kind" refer to that portion of the total project costs not borne by the sponsor. The terms "cost sharing," "matching," and "in-kind" are often used interchangeably. Attention should be given to sponsor definitions of those terms. The University's use of these terms is outlined below.

Committed
Mandatory or voluntary committed 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.
In-Kind
Non-cash contributions contributed by a third-party, such as when individuals at another organization volunteer their time, equipment, or facilities. OMB A-110 Section C23 or (after 12/26/14) 2 CFR 200.306 dictate the terms by which in-kind contributions are valued for the purpose of fulfilling cost sharing obligations.
Mandatory Committed Cost Sharing
Sponsor-driven, i.e., cost sharing required by the sponsor as a condition for proposal submission.
Matching
The term "matching" is a cost sharing term that is typically used to denote 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 that must be documented by the department and is not reported to the sponsor. Although this type of cost- sharing is not reported, it is subject to audit.
Reportable
Committed cost sharing or matching/in-kind that must be documented by the department and must be reported to the sponsor by Sponsored Financial Reporting.
Voluntary Uncommitted Cost sharing
Voluntary cost sharing are project costs 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 sharing account) nor included as project-related effort in the investigator's effort statement. Instead, that effort becomes part of the investigators non-sponsored activities for the University. Note, however, that if a PI choses 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 commited cost sharing.
Voluntary Committed Cost sharing
Cost sharing specifically pledged on a voluntary basis in the proposal's budget/budget justification or the award and 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.

RESPONSIBILITIES

Principal Investigator
  • When developing a proposal, principal investigators must:
    • commit mandatory cost sharing.
    • consider all resources required to complete the project's objectives, including their own effort, and budget accordingly.
    • check 'yes' to the question on the Proposal Routing Form if they are proposing to commit cost sharing/
  • Request and document availability of cost sharing from the source able to commit those resources.
  • At time of award or when cost sharing is later committed, request SPA to establish an EFS cost sharing chart string to track cost sharing.
  • Certify the proper percentage effort on their sponsored projects commensurate with the actual effort they expended, up to the effort level committed.
  • Consult with department head to verify that adequate resources are available if increases in cost sharing are necessary.
  • Ensure that committed cost sharing requirements are met and that documentation is in accordance with University guidelines and sponsor policy.
  • If required by the sponsor, obtain prior approval for changes to cost sharing commitments.
Department Administrator
  • Ensure that the grant administrator in SPA is notified when committed cost sharing is not listed or listed incorrectly on the NOGA.
  • Ensure that committed cost sharing requirements are met and that documentation is in accordance with University guidelines and sponsor policy.
  • Assist PIs and Department Heads in fulfilling their cost sharing responsibilities, as needed.
Department Head
  • Provide a chart-string to pay for cost sharing. Review proposal and PRF to verify that proposed cost sharing commitments are correctly identified on the PRF.
  • Evaluate the appropriateness of committed cost sharing.
  • Define a process that ensures increases in committed cost sharing is 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 on the Proposal Routing Form when there is a request to the Dean's office to provide matching funds.
Sponsored Projects Administration
  • Grant administrators: Review proposal budget, budget justification and PRF to verify that proposed cost sharing commitments are correctly identified on the PRF.
  • Resolve discrepancies between PRF data and sponsor's award notice. Review award terms and conditions and ensure that committed cost sharing is noted on the Notice of Grant/Contract Award.
Sponsored Financial Reporting
  • Report committed cost sharing as required by the sponsor.
  • At project termination, inform department and principal investigator if they have not met reportable cost sharing commitments.
Vice President for Research
  • As necessary, approve cost sharing.

RELATED INFORMATION

HISTORY

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.
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