1. Solving the Mystery of Cost Sharing Sponsored Programs Office Technology and Economic Development November 4, 2009

2. Agenda Cost Sharing Defined Committing to Cost Share at the Proposal Stage Managing Cost Share at the Post Award Stage Example Hints

3. What is Cost Sharing? Portion of project costs not reimbursed by the sponsor Cost share is a REAL dollar commitment Often called “Matching” Can be quantified as a specific dollar amount or percentage Required amount can be calculated from the sponsor cost or the total project cost

4. Types of Cost Sharing Look at Handout Michigan Tech Practice for Cost Sharing on Sponsored Projects Mandatory – Sponsor specifies cost share is required – Proposal will need documentation of sponsor requirement

5. Types of Cost Sharing Voluntary Committed – Offered in the proposal – Not required by sponsor but strongly encouraged – Must be approved by SPO Voluntary Uncommitted – Cost share that is not documented to the sponsor – Examples: GACS for Assistant Professors, F & A rate waiver

6. Sources of Cost Sharing Effort Other Direct Costs Graduate Student Support Facilities and Administrative Costs External Third Party

7. Michigan Tech Cost Share Procedure Cost share can only be committed when required by sponsor Cost share can only be committed at the level required by the sponsor

8. Cost Share Procedure con’t Required cost share must be approved by all departments/colleges sharing the costs Required cost share must be included in an approved budget and be documented on a cost share/marching support form

9. Regulatory Requirements Office of Management and Budget (OMB) Circulars A-110 and A-21 If an expenditure is allowed to be charged to the sponsor, it may be cost shared – Allowable, Allocable, and Reasonable – Cost must be incurred during the project period – Federal Funds may not be used as cost share – Unrecovered indirect costs may be used if sponsor allows

10. Regulatory Requirements con’t Cost Share expenditures may only be cost shared on one project

11. Cost Sharing in the Proposal Submit budget with cost share to SPO Describe cost share in the proposal narrative or budget justification only when it is quantified and approved in the budget Every department/college/center that is participating in the cost share will need to approve the cost share and provide the source of funding

12. PROPOSAL COMMITMENTS = AWARD REQUIREMENTS

13. Accepting Awards with Cost Share University must track and report cost share commitments throughout the life of the project SPO will send confirmation letter to 3 rd party to confirm their support of the project (sample letter and information in handouts) PI’s responsibility to work with the SPO/SPA office to ensure that 3 rd party cost share is documented and provided to the University

14. Cost Share Reporting SPA monitors cost sharing accounts and the expenditures posted to them SPA will generate cost sharing reports to submit to the sponsor’s fiscal representative when required

15. Cost Share Reporting con’t When technical reports require information on cost sharing, the data should be requested from SPA so the numbers are accurate Most sponsors will want to see that the cost share is keeping pace with the expenditures

16. Document, Document, Document! Documentation is required by Federal Cost Principles (OMB A-110) Verifies Michigan Tech’s fulfillment of the financial commitment towards the project Inadequate documentation can result in audit criticisms

17. Example Joe Smith Budget Scenario with Cost Share

18. What is needed at the proposal stage – Transmittal – Budget – Cost Share Form – Letters of support from external contributors dated no earlier than 6 months prior to the date of submission

19. What is needed at the award stage – When award is received SPO will inform all external contributors of the award and confirm their commitment for the project A sample letter and paperwork needed is attached

20. Lessons Learned Only cost share when mandatory Complete necessary forms Ask questions early Verify cost is allowable, allocable and reasonable Monitor your account Communicate any problems or concerns early

21. Any questions?