Time with Office of Sponsored Programs April 4, 2011 Topic: Cost Share

What Is It Cost Share – the portion of a project’s costs not funded by the sponsor. Types include:  Mandatory – cost sharing required by the sponsor as a condition of award.  Voluntary – not required by the sponsor, but has been offered in the budget or proposal narrative. –THEREFORE, BECOMES A REQUIREMENT OF THE AWARD

Methods of Cost Sharing University  Costs covered by the institution –Documented in the financial system  F/A Third Party – Other than University or Sponsor  Subcontractor –Verify appropriateness, reasonableness  Services, Equipment or Materials –Obtain a letter at proposal to quantify commitment –Ensure proper documentation –Certification from third party at award end

Compliance Requirements Cost sharing must be:  Allowable as a direct cost  Incurred during the award period  Necessary and reasonable for the award  Verifiable from the University’s records  Counted one time  Federal $ cannot be used to match Federal $

At Proposal Committed cost share must be approved Evaluate for reasonableness  Both $$ and % of total cost  Ability to meet and compared with existing commitments Ensure all cost sharing is identified – direct or implied  Implied – certain language and other wording insinuates the PI will commit effort

At Award Set Up All cost share must be accounted for in the Financial System.  Establish cost share ChartFields-  MUST BE TIED TO THE PROJECT  OSP will establish the chartField  If using development funds, OSP must have program code Third party cost share is not tracked in the University’s financial system.  Obtain a letter to quantify commitment

During Award All cost sharing must be:  Verified, recorded, and reported  Monitored  Properly documented Effort reports include cost sharing  Fund 0000 with same project number

Closeout of Award Reported in final financial report Ensure all cost sharing is:  Allowable  Properly documented  Met per commitments  Certification from third party

FAQs How do I know whether my grant requires cost sharing? –Check the sponsor program announcement for any cost sharing requirement. –Cost sharing is required for specific programs-DOE.

FAQs How does unrecovered F&A (indirect) cost get documented in the system? –OSPA’s will make a manual calculation of the F&A and note it in the grant file.

FAQs Are costs incurred prior to the start date or after the expiration date of an award allowable as cost share? –No, these costs will not be allowable unless sponsor approval is obtained.  The project’s period of performance applies.

FAQs What does the PI need to do to use funds from a non-federal award to cost share on a proposal? –Approval from Department Chair or to ensure funds are not already committed. –No additional external approval needed.

FAQs When should the sponsor be notified? –Before you do any of the following, need approval from sponsor: Using unrecovered F&A as cost share. Cost sharing for different categories than original budget. –Work with OSPA to notify sponsor in all instances.

FAQs Specialized equipment was purchased from departmental funds in November This equipment will be used on a new project that is awarded in January Can the equipment be used as cost sharing on the new award? –No. The equipment was purchased outside the period of availability.

FAQs On a proposal requiring mandatory cost sharing, the PI decides to use 10% of his administrative assistant’s salary. Can this be used as cost sharing for the award? –No. Unallowable costs cannot be used as cost share. –However, if an unlike circumstance exits it may be allowable. –Obtain sponsor approval and document the unlike circumstance in the award.

FAQs The PI has not included any of her effort in a proposal, but does include other faculty salaries. Is there cost sharing involved with this award? –Yes. There is implied cost share as the PI will contribute some minimum amount of effort.

FAQs A $200K award includes a mandatory 5% cost share. The budget included $10K for equipment provided by the University and in the proposal narrative, the PI notes he will contribute 15% effort to the project. What is the total cost sharing involved with this award? –Total Commitment-15%  Mandatory 5% - $10K of equipment, and  PI effort of 15% of his salary-voluntary commitment (implied)

FAQs What are examples of awards where the PI is not required to commit any effort? –Equipment grants –Dissertation support, training grants, or other awards intended as “student augmentation” –Limited purpose awards such as travel grants and conference support.

FAQs The PI commits 10% of a faculty member’s salary as cost share. Later, the PI notes this faculty member will not be working on the award, but another faculty will be instead. Can the PI use the other faculty member’s salary to meet the cost share commitment? –If the faculty was named in the award, this is considered a change from the original proposal and requires prior approval from the sponsor before it is allowed.

FAQs How should third-party contributions be documented? –A letter signed by a representative from the organization and on the organization's letterhead which includes detailed information (i.e. name, number of hours worked, hourly rate of pay, dates). –The letter must be signed by an authorized representative of the organization and his/her title must be included.

FAQs Can University facilities, such as laboratory space, be offered as cost sharing? –No, only costs paid by the University can be used for cost sharing. –University facility costs are charged to sponsors through the indirect cost rate.

FAQs If a sponsor reduces or removes the effort of a specific person in the awarded budget -- for example, a 50% FTE Research Assistant -- is that cost sharing? –If the scope of work is reduced and the individual does not work on the project, then there is NO cost sharing. However, if the individual still works on that project as proposed, and is funded with other University funds, then it IS cost sharing. –The scope and budget should be reduced before accepting the award.

Requirements OMB Circular A-110 – Administrative Requirements, subpart C.23. OMB Circular A-21 - Cost Principles for Educational Institutions – J.10. Effort Reporting UM System - APM – Cost Share Sponsor Guidelines

Questions for OSP