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Prepared by the Office of Grants and Contracts1 COST SHARING.

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Presentation on theme: "Prepared by the Office of Grants and Contracts1 COST SHARING."— Presentation transcript:

1 Prepared by the Office of Grants and Contracts1 COST SHARING

2 Prepared by the Office of Grants and Contracts2 What is cost sharing? Any project costs that are not funded by the sponsoring agency. This requirement is generally listed in the program announcement or the Request For Proposal (RFP), in the Notice of Grant/Contract Award. Mandatory Cost Sharing: cost sharing that is required by the funding agency as a condition of the award. Voluntary Cost Sharing: cost sharing that is not required, but offered by the funding agency in the proposal. Cost sharing that is proposed voluntarily becomes mandatory once the award is made and must be tracked and documented. All cost sharing must be approved by the Head of the Department that will be supplying the cost sharing, the College Dean, and the Chief Operations Officer before a proposal is submitted to a granting agency.

3 Prepared by the Office of Grants and Contracts3 Why is it so important? Because of budget cuts on both the federal and the state level, agencies will be looking to the institutions to cover more of the cost of a project. There is one major caution to consider: the university discourages the practice of offering unnecessary cost sharing on a voluntary basis. University resources should only be committed in those instances where cost sharing is mandated by a sponsor or is necessary to make a proposal competitive. In all situations, the use of cost sharing should be kept to a reasonable level because of the burden that it places on university resources.

4 Prepared by the Office of Grants and Contracts4 How does it impact your college? Due to the recent budget cuts, colleges may not have the funds to subsidize your program. When an authorizing individual (i.e., the department chair) signs the Proposal Routing Sheet and there is any kind of cost sharing from his/her college on that form, he/she is committing to those costs.

5 Prepared by the Office of Grants and Contracts5 Where does it come from? Cost sharing comes from: project costs funded by university faculty salaries and fringe benefits, travel, equipment, supplies, or reduced indirect costs. Other sources include: project costs funded by other grants or contracts, and in-kind contributions donated by third parties. In the case of a federal project, cost sharing by other grants or contracts must be non-federal money. Cost sharing commitments must be expressed in terms that can be readily translated into absolute dollar amounts. Unless waived by the terms of the project/program, federal cost principles require that cost sharing contributions meet all the following criteria: Verifiable by department/university records Not included as contributions for any other project/program Necessary and reasonable for the accomplishment of project/program objectives Allowable under applicable cost principles Not paid by the federal government under another federal award Provided for in the approved budget or proposal. Total compensated effort for an individual using effort to meet cost sharing requirements cannot exceed 100% Costs are incurred during the same time period as the award

6 Prepared by the Office of Grants and Contracts6 What are some terms used to refer to cost sharing? Assigned Time: When a faculty member is released from his/her regular University duties (e.g., teaching or committee work) to work on other assigned tasks (e.g., Grants and Contracts or other assignments as approved by Dean or Department.) Also referred to as Released Time. Cash: actual expenditures Contributed: Hard Money: cash from non-sponsored funds In-Kind: Can include both university overhead (UP) and third-party contributions of services or goods; cash contributions can come from UP sources (non-federal) or third-party cash contributions (gifts or grants earmarked for and under control of the principle investigator (PI) for use on the project). Matching: When a program requires a percentage of the total project costs in hard dollars as a match, such as a 1:1 match on equipment grants. Non-Federal Funds: Soft Money: cash from sponsored funds Mandatory: requires the University/Foundation to contribute a portion or percentage of the project costs determined by the terms of the project award. Voluntary: the portion of the sponsored project, contributed to the project by the University/Foundation on its own initiative.

7 Prepared by the Office of Grants and Contracts7 Why is it necessary to track and document? Documentation and accounting for cost sharing is as important as documentation of direct costs charged to the award. All documentation on cost sharing is subject to audit in accordance with the funding agency policies. All cost sharing commitments, whether mandatory or voluntary, must be tracked and certified in order to remain in compliance with funding agency requirements. The university must have accounting systems in place to accurately track, value, and report on the status of all cost sharing commitments. Documentation is used to ensure that the cost share approved is allowable as defined by Federal requirements, and that cost sharing provided by sub recipients is adequately monitored.

8 Prepared by the Office of Grants and Contracts8 Who is responsible for tracking and documenting? The Project Director is responsible for documenting and tracking of cost sharing. The Project Director will be the point of contact for the University and will be called on to provide various types of certification. The Dean and Chair of the Department have the responsibility to ensure that the college and department cost sharing commitments can and will be met.

9 Prepared by the Office of Grants and Contracts9 How is cost sharing documented? Effort Reports: Commonly used effort certification verification forms/time sheet Letters of Support: Detail what was provided and the value from on-campus or third party providers Copies of Paid Invoices: Used for specific items of cost sharing as detailed in the budget Equipment: Education discount must be taken into consideration when calculating value, and equipment cannot be used as cost sharing/matching on another project Outside Partners: Effort reports or letters of support

10 Prepared by the Office of Grants and Contracts10 What are some challenges of tracking and documenting cost sharing? Project directors have not been asked for this information prior to receiving this award. Timeliness of documenting cost sharing Inadvertently agreeing to cost sharing that was not expected to be tracked Policies are not necessarily congruent among funding agencies Sometimes there are no clear written policies Inadequate grant accounting systems to track cost sharing or maintain supporting documentation Overstatement and inaccurate valuation of cost sharing commitments

11 Prepared by the Office of Grants and Contracts11 How can we be in compliance with funding agency requirements? Effectively training Grant Administrators Notifying Project Directors of necessary requirements to be fulfilled during the course of the award Writing policies and procedures regarding compliance with federal and state regulations.

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