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

Responsible Officer

Michael Oakes

Vice President for Research (Interim)

Owner

Pamela Webb

Associate Vice President for Research Administration

Nicole Pilman

Director of Sponsored Financial Reporting

Primary Contact

April Coon

Director - Sponsored Projects Administration

Last Revised

12-28-2018

Effective Date

10-15-1998

Policy Statement

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 only be used 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 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 Notice of Grant/Contract Award (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 budget unless specifically authorized on a Proposal Routing Form (PRF) as committed cost sharing and all effort commitments must be met.

Because cost sharing often involves use of departmental or collegiate funds, department heads or deans must approve the commitment via the PRF and 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 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 tracked through EFS.

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 and /or other University 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

Proposal Routing Form
University of Minnesota Notice of Grant/Contract Award (NOGA)

Appendices

Frequently Asked Questions

Contacts

Subject	Contact	Phone	Email
Primary Contact(s)	April Coon	612-624-7021	[email protected]
Project administration	SPA Grant Administrator	612-624-5599
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 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.

In-Kind

Non-cash contributions contributed by a third party, such as when individuals at another organization volunteer their time, equipment, or facilities. 2 CFR 200.306 dictates the terms by which in-kind contributions are valued for the purpose of fulfilling cost sharing obligations.

Mandatory Committed Cost Sharing

Sponsor-driven and required as a condition for proposal submission.

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 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 reported to the sponsor by SFR.

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.

Voluntary Uncommitted Cost sharing

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 share chart-string) nor included as project-related effort in the PI’s effort statement. Instead, that effort becomes part of the PI’s 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 committed cost sharing.

Responsibilities

Principal Investigator (PI)

When developing a proposal, must:
- Commit mandatory cost sharing.
- Consider all resources required to complete the project's objectives, including own effort, and budget accordingly.
- Check 'yes' to the question on the Proposal Routing Form if 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 share chart-string to track cost sharing.
Certify the proper percentage effort on sponsored projects commensurate with the actual effort expended, up to the effort level committed.
Verify with department head 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.
Obtain from the provider of in-kind commitments documentation that identifies and quantifies the value of that cost share and then provide that documentation to SFR for reporting purposes and retain copies within department project files.
If required by the sponsor, obtain prior approval for changes to cost sharing commitments.

Department Administrator

Notify the grant administrator in SPA 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 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 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 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 on the PRF when there is a request to the Dean's office to provide matching funds.

Sponsored Projects Administration (SPA)

Grant administrators: Review proposal budget and budget justification 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 NOGA.

Sponsored Financial Reporting (SFR)

Report committed cost sharing as required by the sponsor.
At project termination, inform department administrator and PI if they have not met reportable cost sharing commitments.

Vice President for Research

As necessary, approve cost sharing.

Related Information

Administrative Policy: Effort Certification
Administrative Policy: Charging of Facilities and Administrative/Indirect Costs to Sponsored Projects

History

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.

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