Cost sharing or matching is that portion of the project or program costs that are not paid by the funding agency.
Costing sharing includes all contributions, including cash and in-kind, that a recipient makes to an award.
If the award is federal, only non-federal expenses qualify as cost sharing, and each expense must meet the same allowability tests (allowable, allocable, necessary/reasonable, and consistently applied) as any direct-charged expenses. Cost shared effort is part of the total committed effort for individuals working on the project. Reported cost share is auditable and must be allowable under cost principles and verifiable to financial records.
Mandatory versus Voluntary Committed
There are two types of cost sharing that must be documented and tracked:
- Mandatory cost sharing is required by the sponsor as a condition of obtaining an award. It must be included or a proposal will receive no consideration by the sponsor.
- Voluntary Committed cost sharing occurs when resources are offered by the university (documented and quantified in the proposal) but it is not a specific sponsor requirement. Voluntary committed cost sharing is not expected nor used as a factor during the merit review of federal applications or proposals, per Uniform Guidance §200.306. For proposal opportunities where cost sharing is not a requirement, it is in the best interest of the university to directly charge federal agencies for project expenses instead of offering to cost share. When cost share is proposed and the award is made, it becomes a binding commitment which the university must provide and document as part of the performance of the sponsored agreement.
A faculty member proposes to spend 30 % of her total time worked for UC Davis as effort on a project sponsored by NSF. She plans to charge 10 % of her salary to the project. The remaining 20% of her effort is cost share because she is committing the effort, but is not charging the entire 30% to the sponsor.
It is expected that faculty members and senior researchers (key personnel) on sponsored research projects will make a commitment of effort to the project. Generally, it is not acceptable for a principal investigator to submit a research proposal without a commitment of PI effort. If effort is committed and expended, but not directly charged to the project, it must be tracked as cost share.
If a project requires the purchase of new equipment as a condition of an award, it is allowable to purchase the equipment and cost share all or part of the expense in proportion to the value to the sponsored project. Meaning, if a piece of equipment is purchased with the expectation of using it 50% on a sponsored project and 50% for other university purposes, then 50% of the total cost may be direct charged OR cost shared to the project. If cost shared, the equipment expense must be reported as cost share in the General Ledger Transactions section of the Cost Share Application. The equipment should also be identified as cost shared in the Capital Asset Management System.
Equipment that is owned by the university prior to the start of the award is not allowable as cost sharing, as the equipment was not purchased during the award period (doesn’t meet the allowability test) AND the sponsor is already paying for a portion of the equipment through the indirect costs assessed on the project’s direct charge expenses (AKA “double-dipping”). However, university-owned equipment can still be used on sponsored projects. In each case, the proposal should explicitly state that “the equipment is available for the performance of the sponsored project at no direct cost to the sponsor."
Reporting as cost share the USE of existing equipment is allowable only when an approved recharge rate has been established and published. However, if the equipment was purchased with federal funds, it is not allowable to cost share the use (also “double-dipping”).
|Space and Facilities
It is not allowable to claim the value of university facilities as cost sharing, as the use of our facilities is partially paid for by sponsors through the application of the indirect cost rate (again, “double-dipping”). The principal investigator MAY offer the use of a research lab or facilities for the project, in which case, the proposal should state “the facility or lab will be available for the performance of the sponsored agreement at no direct cost to the project."