Kiev, Ukraine October 2009 Cost Share

Objectives  Understand the definition of Cost Share  Identify USAID regulations that apply to Cost Share  Determine Allowable and Unallowable Cost Share  Account for Cost Share  Report Cost Share

Cost Sharing Is… “The portion of the project or program costs not borne by the United States Federal Government” [Source: 22 CFR Definitions]

Purpose of Cost Share  To further the objectives of the program  Ensure that the recipient will build its organizational capacity for resource mobilization  To promote sustainability  Expand the impact of the program  Demonstrate recipients’ degree of support

Consequences of Not Meeting Cost Share Goals  Reduction in funding: 1.The AO may reduce the amount of USAID funding for the following funding period, or, 2.If the award has expired or has been terminated, may require that the recipient refund the difference to USAID  Opportunity lost for programmatic achievements

USAID Regulations  22 CFR (U.S. Organizations)  USAID Standard Provisions  USAID ADS  AAPD  USAID Policy Papers - “USAID Partnership in International Development with Private and Voluntary Organizations”

Cost Share Criteria  Are verifiable from the recipient’s records  Are not included as contributions for any other USG federally-assisted project  Are necessary and reasonable for proper and efficient accomplishment of project or program objectives  Are allowable under applicable cost principles  Are not paid by the Federal Government under another award or through indirect cost recovery  Are provided for in the approved budget  Confirm to provisions in applicable regulations

Cost Share Examples  Cash, Goods or Services  Funds spent from Non-U.S. Government Sources  Labor of Grantee Volunteers or Employees  Donated Equipment, Buildings and Land  Program Income

Donated Cash, Goods, Services  Donated supplies include items such as expendable equipment, office supplies, laboratory supplies, software and contributed utilities.  Examples: Donated condoms, computers for grant work and brochures.  Note: Source, origin, and nationality, and commodity restrictions rules DO NOT apply to cost share.

Funds from Non-U.S. Government Sources  Use of non-U.S. Government funds towards a Cost Share requirement.  Examples: Global Fund, Private Foundation, Organization’s (Recipient/Subrecipient), unrestricted funds.

Labor: Employees & Volunteer Time  Activity must support program performance  Services can be of any skill level as long as work is relevant to the goals and objectives of the program  Time must be recorded using timesheets or similar mechanism  Hourly/Daily rates justified - Question –First look in-house (in organization) for similar work –If not available – then consider rates in labour market

Donated Equipment, Buildings and Land  Normally only depreciation for equipment and building may be made (determined in accordance with org accounting policy). The full value of the equipment or the fair rental charge for land may be acceptable if approved by AO. –Value may not exceed fair market value of a good of the same age and condition at the time of donation.  Examples: motor vehicles, servers, Porta cabins

Backup Documentation by Type of Cost Share

Backup Documentation

Flow Down of Cost Share  Cost share requirements vary by recipient  Cost share is often flowed down to sub-recipients and reflected in a submitted cost share plan and in sub-agreement  Reporting system for sub-partners should be clearly defined

Exercises  Regulations  Documentation

NGO In-Kind Contributions Example: You have a sub-grant with a local NGO to establish clinics in rural areas. The NGOs have their own land and buildings in areas where they want to establish these clinics and will not charge any rent. If the NGO had to rent buildings to establish these clinics, they would have paid $2,000 per month. Can the value of the rent of those buildings be counted as Cost Share? Documentation Guidelines The agreement that details what contribution the NGO will make to the project and its estimated value. Financial reports or other documentation from the NGO that support the valuation of the contribution (i.e. if the NGO is contributing clinic space, the documentation could include quotes for comparable rental space in the area).

Funds from Non-USG Sources - Contributions to NGOs Example: You have a sub-grant for $5,000,000 with a local NGO. This NGO also has a $1,000,000 sub-grant from the Packard Foundation. It is renovating clinics throughout India to support the activities of your program. The Packard Foundation agrees to pay $75,000 from its sub-grant to contribute to the costs of the clinic renovations. Can this $75,000 can be counted as cost sharing? Documentation Guidelines A signed statement/contract from the donor that details the value and purpose of the donation (this will likely be a statement/contract between the donor and the NGO). Financial records and/or a memo with supporting documentation (receipts, agendas, etc.) from the NGO that provides details on how the funds were spent.

Donated Property (Equipment) Example: The Gates Foundation is closing out a project in your country, and would like to donate a used vehicle to your project there. Can this contribution count as Cost Sharing? Documentation Guidelines Information on fair-market value for the donated goods including quotes from vendors and/or copies of invoices for similar items. Depreciation calculations (including current fair market value and useful life of the donated item). In cases of donated land, buildings, or space, a valuation information from an independent appraiser. A signed statement from the donor that details the equipment that was donated to your organization. A memo/report detailing how the equipment was/is being used.

Volunteer Services Example: A graduate student attending a university in your country volunteers to provide Monitoring and Evaluation services to your project for a period of one year. The project could use her services but cannot afford to pay her so she volunteers her time. Can the project count the value of her donated time, plus applicable fringe benefits, as Cost Sharing? Documentation Guidelines Timesheet Documentation for the valuation of the services. This could include Local FSN Scales; Financial report detailing the rate of pay for a similar position(s) at your organization; Copy of hire letter of a similar position at your organization Description of work performed A brief memo stating the work performed and the deliverables met by the volunteer should be included as documentation.

Any Questions?