2. Cost Sharing on Sponsored Projects
Presented by:
Michael Kostyshak-OSP Pre-award
&
Comfort Brownell-OSP Post-award

3. Agenda Brown’s Policy on Cost Sharing
Define Cost Sharing and the types of Cost Sharing
The impact of Cost Sharing on Brown
The Cost Sharing Approval Process
Post Award Accounting for Cost-Sharing

4. Policy Statement:
“The University must ensure that cost sharing requirements of sponsored agreements are:
Proposed
Approved
Accounted for
Reported
in a manner consistent with the requirements of the sponsor
and the University”

5. Definitions Cost Sharing Definition: What is Cost Sharing?
A portion of total sponsored project/program costs not funded by the sponsor
All contributions, including cash and in-kind, that a recipient makes to an award
It is further defined as either Mandatory or Voluntary.

6. Definitions Mandatory Cost Sharing: Required by the Sponsor
Identified or quantified in the proposal
A condition of receiving the award
A commitment of the University
Must be captured and documented

7. Mandatory Cost Sharing:
Example:
The PI would like to submit a proposal to the NSF Major Research Instrumentation (MRI) program which requires a 30% match
The total cost of the equipment is $130,000
Brown requests $100,000 from NSF
Brown must commit to provide $30,000 (Mandatory) of funding
Additional cost sharing would be voluntary
If Brown does NOT meet this obligation, we forfeit the funding from NSF.

8. Definitions Voluntary Cost Sharing : Voluntary Committed :
Not required by the Sponsor
Voluntary Committed :
Identified or quantified in the proposal
A Commitment of the University
Must be captured and Documented
Voluntary Uncommitted:
Not identified in the proposal, or any other communication to the sponsor
Not a condition of the award
Not a binding commitment of the University
Does Not require documenting or reporting

9. Voluntary Committed Cost Share
Example:
There is no Sponsor requirement to cost share
PI annual salary is $120,000
PI commits 50% effort to project in the proposal
Total PI salary = $60,000
Budget includes PI salary at $30,000 to the sponsor
The balance of $30,000 = Cost Share
Cost share must be approved at the proposal stage and
Accounted for at the award stage.

10. Voluntary Uncommitted Cost Share
Example:
The award requires 50% effort for the PI.
The PI actually spends 60% time on the project.
The department only charges the 50% effort to the award.
The 10% effort over and above the budget (commitment) is voluntary uncommitted cost share and does not have to be documented.

11. Definitions
In-kind
A non-cash contribution to a sponsored project or program
Provided by a party other than Brown University or the primary sponsoring agency
May be mandatory or voluntary
May be in the form of goods, services, real property, equipment, supplies or other expendable property directly benefiting and specifically designed for the project or program

12. In-kind Cost Sharing In-kind Example: Donation of scientific equipment
Requires letter from Donor
Dollar amount = Fair Market Value
Same approval process as any other cost share

13. “CAP” Cost Sharing Salary Cap Cost Sharing
Sponsor-imposed limit for individual salaries
Cannot be used as mandatory committed cost sharing
Must be identified (tracked) for cost accounting purposes
Examples:
NIH Salary cap = $185,100 over 12 months
NSF Limits Investigator effort to 2 months per year
May request more than 2 months with justification
May re-budget into salary and go over 2 months per year without prior approval

14. F&A as Cost Sharing Unrecovered Indirect Cost-Reduced F&A
F&A cost rate less than the rate allowed by the sponsor
E.g. Brown reduces its rate for a proposal
Unrecovered indirect cost attributed to the direct costs being cost shared on an award.

15. The Impact of Cost Sharing to Brown
Cost sharing has broad implications on the University:
Financial impact
Reduces total institutional dollars available for research endeavors
Inability to recover F&A costs associated with cost sharing dollars
Administrative/Compliance impact
Associated administrative requirements
Failure to properly document cost sharing may result in audit findings
Facilities and Administration calculation impact
May reduce University’s future indirect cost rate

16. Calculation of the Indirect Cost Rate
Indirect Costs
Direct Costs*
= Indirect Cost Rate
$62,500
= 62.5%
$100,000

17. Calculation of the Indirect Cost Rate
Indirect Costs
Direct Costs*
= Indirect Cost Rate
$62,500
= 56.82%
$110,000

18. Effect of Cost Sharing on the Rate
Are some costs better than others?
Cost Sharing from non-Brown sources intended for research
Part of the research base; no additional effect on F&A rate
Graduate student support
graduate students are partially excluded from MTDC (tuition, health fee) therefore there is less affect on base
Equipment
excluded from MTDC for research base

19. Why Cost Share? Sponsors issue RFPs requiring cost sharing
Subawardees should share the burden;
(pass down the Cost Sharing requirement)
Scope of work requires resources greater than commitment by sponsors
Competition for awards – The perception that cost sharing will enhance the ability to win awards*
*But see, NSF Clarification on cost sharing

20. *NSF Clarification on cost sharing:
Inclusion of voluntary committed cost sharing is prohibited
All organizational resources necessary for the project (both physical and personnel) must be described in the Facilities, Equipment and Other Resources section of the proposal
The description should be narrative in nature and must not include any quantifiable financial information
NSF-Mandatory cost sharing will only be required when explicitly authorized by the NSF Director
(see NSF Grant Proposal Guide (GPG) Chapter II.C.2.i for more information)

21. *UG Clarification on cost sharing:
Uniform Guidance
Voluntary committed cost sharing is not expected
Cannot be used as a factor during merit review
May be considered if required by Federal Regulations and specified in the funding opportunity announcement
Only Mandatory or Voluntary Committed cost sharing must be included in the base for F&A

22. What is Allowable as Cost Sharing?
Anything allowable in the regular budget categories and
sponsor guidelines:
Direct costs
Salary and benefits
Rented Space
Equipment
Travel
Supplies
Tuition
Indirect Cost
Reduced Rate
Forgone F&A (with sponsor approval)

23. Sources of Funds
Sources of cost sharing must be identified at the proposal stage
It is the PI’s responsibility to identify all sources of funds
May NOT utilize funds from another federal award.
Effort covered by NIH Career Awards is not considered cost sharing
Note that an exception is NEH
May include funds from non-federal awards ONLY when specifically allowed by the non-federal sponsor.

24. Sources of Funds Cost sharing is typically funded by: Cash Non-cash
Operating budgets
Other department designated funds
Other Department Funds (OVPR Equipment fund)
Gifts
Non-cash
Tuition subsidy
In-kind contributions

25. What is NOT Cost Sharing
Costs that occur before or after the period of performance of the project
Preliminary work done with department funds, start-up funds, or gifts, etc. prior to the proposed work
Work covered by other grants that have their own unique Scope of Work
Cost that are not allowable under the award

26. Cost Sharing Pitfalls Most sponsored projects require faculty effort
Beware of expressions of support in budget narratives and work scope that are not included in the budget figures
Revised budgets due to a sponsor cut in funding should include a corresponding cut in cost-sharing commitment
Beware of letters of support that reference the use of other funding; e.g. start up funds…
Remember that most direct cost sharing has a respective F&A component

27. Let’s Discuss The Rules
Brown University Cost Sharing Policy
Let’s Discuss The Rules

28. Brown’s Position
“Brown’s objective is to maximize sponsor cost reimbursement to support the continued growth of the research enterprise.”
Provide only the minimum amount of cost sharing necessary to meet sponsors’ requirements

29. Criteria for Cost Sharing UG 200.306(b)
Cost sharing must:
be verifiable from the recipient's records. 
not be included as contributions for any other federally-assisted project or program. 
be necessary and reasonable for proper and efficient accomplishment of project or program objectives.
be allowable under the applicable cost principles.
not be paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching. 
be provided for in the approved budget when required by the Federal awarding agency. 
conform to other provisions of this Circular, as applicable.

30. CASE STUDY

31. Case Study The sponsor requires a 1:1 match
The PI is committing 10% effort during the AY
Will only charge half of this to the grant.
An additional month of effort with start up funds.
The PI Academic Year salary for FYXX = $100,000.
Grad. Student Research Assistant at $15,000 AY
In-kind former grad student for 100 $10.00/hr.
Brown University’s full time fringe benefit rate is 32.4%, part time rate is 8.4%

32. July 1, 20XX – June 30, 20XX

33. Case Study
Particle analyzer at $90,000 will only charge the grant half
Harvard University will be a subcontractor at $20,000  
Other costs include Travel $2,000
Research supplies $2,000
$500 for publication charges
Brown includes 25% of tuition; the tuition rate for 20XX-20XX will be $41,524
Health services fee at $676
Office supplies and copying are unallowable

35. Case Study Brown University’s indirect cost rate is 62%
Standard deductions for calculating F&A
The sponsor does not allow lost F&A as cost sharing.

37. Original Case Study Budget

38. Alternate Case Study Budget
July 1, 20XX – June 30, 20XX

39. Approval process
Prior approval of cost share is required for proposals with cost sharing.
Must have source accounts for cost sharing
Make sure there is a BAT key setup for source account
Must always be signed by the PI and Dean or Director
May require additional approval
Signed Form must be submitted with proposal
Signed form is submitted in Coeus with the Proposal

40. Proposal awarded…Now What?
AWARD PHASE……
Proposal awarded…Now What?

41. Identifying Cost Share Requirement at the Award Stage
How do I know my award has cost share requirements?
Review proposal budget and budget justification
Check Coeus for approved Cost Sharing Commitment Form for proposals submitted after 10/1/2011
Mandatory or Voluntary Cost Sharing may be included in the budget and budget justification

42. Identifying Cost Share Requirement at the Award Stage
Log onto Coeus and click on the diamond icon shown below
Enter the account number received from OSP and double click on the active award

43. Identifying Cost Share Requirement at the Award Stage
Click the details tab and click on Cost Sharing-mandatory and voluntary committed cost sharing summary information

44. Identifying Cost Share Requirement at the Award Stage

45. Assigning WorKtags to Cost Shared Transactions
Finance
Source of Funding - Operating Funds:
Enter Grant Worktag and then change defaulted Fund 500 to Fund 120
Source of Funding - Endowment or Gift Funds:
Enter Grant Worktag then enter Endowment/Gift
Worktag
The Endowment/Gift related/default worktags overwrite the Grant related/default worktags
Cost Share could be funded from multiple sources. Example, Operating funds, gifts/ endowment. It is critical to include the correct worktags on the cost share transaction, in Workday.
Cost share worktags for non personnel charges are entered on the transaction directly in the operational system- example, included on journals, supplier invoices, etc.

46. Assigning WorKtags to Cost Shared Transactions
HCM-ASSIGN COSTING ALLOCATON
Source of Funding - Operating Funds:
Enter grant worktag
Change defaulted worktags –CC, BU, and Expense Purpose to those related worktags associated with the cost share source account/cost center
Change defaulted fund worktag to Fund 120
Cost share worktags for personnel charges are entered on a worker’s costing allocation in the HCM system

47. Assigning WorKtags to Cost Shared Transactions
HCM-ASSIGN COSTING ALLOCATON
Source of Funding - Endowment or Gift Funds:
Enter grant worktag
Change defaulted worktags –CC, BU, and Expense Purpose to those related worktags associated with the endowment or gift
Change defaulted fund worktag to Fund 400 for Endowment or Fund 600 for Gift

48. Monitoring/Tracking Cost Shared-Reports
Cost Share Actuals are monitored/tracked using the following reports:
The Sponsored Award Budget to Actuals Report
- For tracking non personnel charges
Effort Certification Reports
- For tracking cost shared effort
Cost share activities must be properly/correctly coded to appear on both reports.
Cost Share column will appear on the Sponsored Award Budget to Actuals Report if there are cost share activities. If there are no cost share activities, there will not be a separate column for cost share on this report.

49. Monitoring/Tracking Cost Shared Effort-Effort Certification (ECR)
Cost shared effort will appear on the ECR when:
Cost shared effort is coded with correct funding source-e.g. FD120
ECR can be modified to reflect correct cost sharing funding source-e.g. FD120
Effort Certification Report is the primary source for tracking cost shared effort on an award.
If not coded correctly, cost sharing charges will not be captured on effort certification.

50. Monitoring/Tracking Cost Shared Effort-Effort Certification Report
example of an ECR with cost shared effort

51. Tracking Other Cost Shared Expenditures
Subawardee
Confirm subawardee has met cost share requirement
- Final invoice from subawardee should indicate cost share has been met and certified
Cost sharing

52. Best Practices Once notice of award received (NGA):
Review NGA, Coeus Cost Sharing record and the proposal budget and budget justification
Meet with PI and discuss award terms
Make sure you have the names of all those with cost share effort on the award
Once notice of award received (NGA)-

53. Best Practices
Make sure BAT Key setup for source accounts for cost share
Review Effort Certification Report for cost share effort % (monthly/semi annually)
Ensure salary over the cap reflected on Effort Certification Report (monthly/semi annually)
Once notice of award received (NGA)-

54. Best Practices
Meet with PI/faculty periodically to review proposed and actual cost share commitments
Ask your OSP representative when in doubt
Document, Document, Document….
Once notice of award received (NGA)-

55. Final Advice
Only commit to cost sharing when it is required, and then, only at the level or amount that is required.
Obtain approval for cost share prior to submitting proposal
Don’t propose it, if you’re not willing to cover the cost…

56. Final Advice
Cost shared expenditures on sponsored projects are subject to audit
Document, document, document!

57. Remember, we are here to help you…….?