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.
Types of Cost Sharing
There are three types of cost sharing:
- Mandatory – Required by the sponsor as a condition of the proposal submission and acceptance of the award. Such a requirement will be outlined in the funding announcement and/or award document.
- Voluntary Committed – Cost sharing committed in the budget proposal that is not required by the sponsor (highly discouraged since funds are usually drawn away from other institutional sources, could affect negotiated Facilities & Administrative (F&A) rate, prompt additional audits). Once offered by the institution and agreed to by the sponsor, it becomes an obligation the university must fulfill.
- Voluntary Uncommitted – Cost sharing that is over and above an amount that was committed and budgeted for in a sponsored agreement. It is neither pledged explicitly in the proposal nor stated in the award documents, but it occurs in the course of executing a project, often when an individual expends more effort on the project than his or her commitment requires.
Cost Sharing vs. Institutional Support
Institutional Support is NOT cost share. It is a general description of how institutional resources will benefit the project, but this is not quantified in the grant proposal. Institutional support uses generalized language, and only gives estimates of value and does not require tracking and documentation in post-award as cost sharing does.
Responsibilities
- Sponsored Projects Services (SPS) Account Setup – SPS establishes an activity code in Banner FIS, which is the grant number, and will allow cost sharing expenditures to be tracked.
- Department Grant Administrator (DGA) – The DGA is responsible for entering the grant award activity code for all cost sharing items. If the department/center is using third-party cost sharing, the DGA will be responsible for getting the third-party documentation and submitting it to the post-award team at SPS.
- SPS Post-Award – Post Award reviews cost sharing expenditures to determine if they are allowable expenses. They will also calculate and input waived F&A so that it is properly tracked to the award in EPCS and Cognos. Post-award is responsible for reporting cost share to the sponsor. If you have any questions about available reports to check cost share progress, please reach out to your post-award team.
Allowability of Cost Shared Expenses
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.
- Allowable for Cost Sharing (assuming the charges are properly documented)
- The charges occurred during the effective dates of the award,
- The charges were reasonable and necessary, and
- The charges were allowable under 2 CFR Part 200 and per the terms and conditions of the award.
- Unallowable for Cost Sharing
- Charges outside the effective dates,
- Cost sharing federal funds to another federal award (unless the federal agency agrees to cost share with another federal sponsor),
- Expenditures that have already been previously used as cost share on another award, and/or
- Any expenditures which are unallowable per 2 CFR Part 200, or unallowable as per the terms and conditions of award.
Additional Information
See, Applying for Your Award: Cost Sharing for more information on how to include cost share in your application.
See also, the Office of the Vice President for Research and Innovation's Policy for Institutional Commitment webpage for information on how to request institutional commitment from the OVPRI.