Handling Cost Sharing (including Matching and In-Kind Contributions) After Award Acceptance
1. Receive the Award and Adjust Cost Sharing if Appropriate
If the project was awarded as proposed:
No adjustments to the budget or cost sharing will be necessary.
If the project was awarded less funding than proposed:
Cost sharing listed in the proposal assume full funding by the sponsor. If the proposal included the recommended statement that cost sharing committed in the proposal will be reduced proportionately to any reductions in the amount of the award, then the level of required cost sharing will be adjusted proportionately. Cost sharing over that required level is voluntary uncommitted cost sharing.
If the award is reduced and the recommended statement was not included, cost sharing must remain at the level listed in the award document. Sponsor approval is required to decrease the commitment. Cost share commitments must be honored in full regardless of PI reductions in effort.
If the decreased award results in a need to cost share some of the project costs to accomplish the project workscope, then the resulting cost sharing is considered voluntary uncommitted.
2. Communicate Cost Sharing Documentation Requirements
If the cost sharing question on the Proposal Routing Form was checked 'Yes,' the Notice of Grant/Contract Award (NOGA) will indicate that a cost sharing commitment was made. The grant administrator in SPA is responsible for indicating on the NOGA the nature of the commitment (e.g., dollar amount or percent effort) and whether it is reportable to the sponsor.
If the NOGA does not reflect cost sharing but should, the department is still responsible for meeting the commitments and must notify the grant administrator so that the NOGA can be corrected.
Committed Cost Sharing Contributions
What is considered 'committed'?
If the proposal budget, budget justification or award specifically pledges cost sharing, it is considered committed, regardless of whether at proposal time it was mandatory (required by the sponsor), or voluntary (offered by the principal investigator).
Voluntary Uncommitted Cost Sharing Contributions
If a principal investigator decides to donate additional departmental resources (equipment or staff time) to the project, it is a decision that must be made with the consent of the department head. These additional resources are considered "voluntary uncommitted cost sharing."
Voluntary uncommitted effort should not be certified on an effort statement as effort devoted to the benefitting sponsored project. Instead, that time should be certified as general university paid time. If, however, an investigator decides to use that effort to meet the effort levels promised to the sponsor, then that effort changes from being "voluntary uncommitted" to "voluntary committed" effort. Like all other voluntary committed effort, it must be tracked on a cost-share chart string and certified in the effort system as effort associated with the sponsored project.
3. Document the Cost Sharing Commitments
Requirements: The following requirements apply to committed cost sharing:
- are stated on the Notice of Grant/Contract Award (NOGA);
- must be consistent with the terms and conditions of the sponsored agreement, including direct costing provisions;
- must be allowable, allocable as a cost to the project, and reasonable and necessary for performance of the project;
- must be documented according to the section below on "Documenting Cost Sharing";
- are reported to the sponsor by Sponsored Financial Reporting, if required by the sponsor;
- must be specifically designated for only that project, i.e., they cannot include contributions used on other projects unless prior approval has been received (for example the full amount of a gift designated as a match on one project cannot also be used as a match on another project); and
- cannot originate from sponsored funds unless specifically authorized by both sponsors.
How to document committed cost sharing: Accurate records must be maintained by the department in accordance with the University's record retention obligations for the award. Cost sharing records must be kept in the departmental project files for the same length of time as other award documents.
- Salary or wages: These expenses are charged to established cost sharing chart-strings and documented through certification of Effort Statements.
- Third-Party Labor Contributions: The organization must document the time commitments through its own financial system and this documentation must be retained by that organization for audit purposes. The value of the cost sharing may not exceed the actual cost to the third party labor contributor, including salary, fringe benefits, and indirect costs at the federally approved F&A rate of the third party contributor (if any). If this cost sharing must be reported to the sponsor, the provider of the cost share must send a letter or report to the PI or unit administrator that identifies the time and the value of that time. This letter must be written after the individual has contributed the effort. Estimates cannot be accepted. The PI / unit administrator must then forward the letter to Sponsored Financial Reporting for reporting to the sponsor, if required.
- Non-salary items: These expenses are charged to established cost sharing chart-strings and approved as necessary by unit Certified Approvers.
- Non-salary items contributed by a third party. The cost or value of these items must be certified by the provider using the rules outlined in OMB A-110, Section C23 (AFTER 12/26/2014, 2 CFR 200.306) and documentation of the value provided to the PI or unit administrator. Once the amount of such contribution is known, the PI or unit administrator must also share that documentation with Sponsored Financial Reporting. Both the provider and the unit must retain documentation of that cost sharing for audit purposes.
4. During the Project Period, Adjust Cost Sharing if necessary
Mandatory Committed or Voluntary Committed Cost Sharing:
First check the terms and conditions of the award and the sponsor's policies. Sponsors generally require prior approval for decreases in levels of committed cost sharing, and some sponsors require prior approval for changes in how the cost sharing will be provided or who is providing that cost sharing.
How to obtain prior sponsor approval:
- The unit must generate a letter that explains why the change is necessary, and obtain the PI's endorsement. Route the letter through the appropriate grant administrator in Sponsored Projects Administration.
- The grant administrator will review and have the letter endorsed on behalf of SPA, and forward it to the sponsor.
- Upon approval by the sponsor, the grant administrator will issue a revised Notice of Grant Award reflecting the updated obligation.
If prior sponsor approval is not necessary, department personnel and principal investigators must document the reasons for the changes, send copies to SPA and SFR, and keep this documentation with the department's project files. Cost sharing is often checked by auditors and this information will be necessary in case of an audit.
Because uncommitted cost sharing does not need to be documented, these adjustments can be made without providing documentation for the file. However if the voluntary uncommitted cost sharing is used to satisfy effort reuirements, it is necessary to treat that cost sharing as voluntary committed cost sharing.
5. Report Cost Sharing
If required by the sponsor, Sponsored Financial Reporting, with the assistance of the department, reports committed cost sharing. Either the terms and conditions of the particular award or the sponsor's policies will indicate whether the cost sharing is reportable. If the sponsor is silent, Sponsored Financial Reporting will not report it, however departments must maintain supporting documentation.
6. Cost Sharing Oversight
At project end, any cost sharing commitments listed on the NOGA must have been documented at the level indicated on that document. The principal investigator must document any changes to that commitment, either through a prior approval request or a note in the project file (see step 4, above). This documentation may be reviewed by auditors.