Cost Sharing Reporting and Documentation

Cost sharing is the portion of a project or program cost that will not be borne by the sponsor. Cost sharing occurs when either a sponsor requires a recipient to commit funds beyond an award amount, or the award recipient voluntarily commits other funds to a project or program. When cost sharing for federal awards, the obligation must be met using non–federal fund sources. Note that such sources may only be "used" once as cost sharing/matching funds.

In order for charges to be allowed as cost sharing, they must also meet the criteria of allowability as a direct charge on the award. This means that the cost sharing expenses must meet all conditions of both the sponsor award and the Office of Management and Budget 2 CFR Part 200.

There are three types of cost sharing:

  1. Mandatory – Cost sharing that the sponsor requires as a condition of the award.

  2. Voluntary Committed – Cost sharing committed in the budget proposal that is not required by the sponsor (highly discouraged due to the fact that funds are usually drawn away from other institutional sources, could effect negotiated Facilities & Administrative or F&A rate, additional audits).

  3. Voluntary Uncommitted – Cost sharing that usually occurs when costs exceed the proposed budget, or costs for salary that exceeds the National Institutes of Health (NIH), Substance Abuse and Mental Health Services Administration (SAMSHA), or Agency for Healthcare Research and Quality (AHRQ) caps.


  1. Sponsored Projects Services (SPS) Account Setup – SPS will establish grant award activity in Banner FIS, which will allow cost sharing expenditures to be tracked.

  2. Department Grant Administrator (DGA) – will be responsible for entering the grant award activity code for all cost sharing items. In the event that the department/center is using third-party cost sharing, the DGA will be responsible for getting the third-party documentation and forwarding to SPS.

  3. SPS Financial Staff – will review cost sharing expenditures to determine if they meet the following requirements to be documented as cost sharing on an award:
Allowable for Cost Sharing
  1. The charges occurred during the effective dates of the award,
  2. The charges were reasonable and necessary,
  3. The charges were allowable under 2 CFR Part 200 and per the terms and conditions of the award, and
  4. The charges have been properly documented.

Unallowable for Cost Sharing
  1. Charges outside the effective dates,
  2. Cost sharing federal funds to another federal award (unless the federal agency agrees to cost share with another federal sponsor),
  3. Expenditures that have already been previously reported, and
  4. The expenditures are unallowable per 2 CFR Part 200, or terms and conditions of award.