What’s essential

OMB Circular A-110 establishes the following criteria for cost sharing for federally-sourced awards:

• Verifiable from the recipient’s records
• Not included as a contribution for any other federally-assisted program
• Necessary and reasonable for proper and efficient accomplishment of the project or program objectives
• Allowable under applicable cost principles
• Not paid by another federal award, except as authorized by statute
• Provided for in the approved budget when required by the federal awarding agency.

The Circular also spells out specific requirements and limits for determining the value of particular types of cost sharing (e.g., donations, volunteers, and loaned items).

Why it’s important

Proposed cost sharing becomes a binding commitment once an award is made. Failure to fulfill the cost-sharing obligation at the level proposed results in the reduction of the amount of the sponsor’s award. An RC-unit that pledges cost sharing is responsible for identifying and providing the resources for committed cost share.

How to comply

In the proposal:

• UNH strongly encourages limiting cost sharing to that which is mandated by sponsors. (It is worth noting that the National Science Foundation now prohibits voluntary committed cost sharing.)
• Principal Investigators are strongly encouraged to limit explicit commitment of effort contributed at no cost to the sponsor, especially in those instances where contributed effort is not a significant portion of the PI’s total effort.
• Anticipated cost-sharing contributions from third parties should be documented in official subrecipient proposals or signed letters of commitment.

After the award:

• Cost sharing ordinarily should be expended at the same rate as the sponsored funds.
• Cost sharing should be monitored/documented/recorded throughout the duration of the project to make sure the proposed obligation is being fulfilled.
• Cost shared salaries must be charged to the project’s cost sharing fund, as budgeted, to be allowable as cost sharing.
• Documentation of all cost sharing not documented in the cost-sharing fund must be maintained at the RC-unit.

Additional Information

Matching Funds represent a form of required cost sharing at a significant level, for example, two Federal to one non-Federal or one Federal to one non-Federal.

OMB Circular A-110  describes how to establish the value of non-cash contributions, such as: 

• The cost shared value of volunteers should be consistent with what UNH pays for similar work.   When the required skills have no comparator within UNH, rates must be consistent with those paid for similar work in the New Hampshire labor market and can be estimated using resources such as Independent Sector.
• The estimated value of donated equipment for which title passes to UNH may differ according to the purpose of the federal award.  If the purpose of the award is to assist in the acquisition of equipment the total value of the donated equipment may be claimed as cost sharing; however, if the purpose of the award is to support activities that require the use of the equipment, normally only depreciation or use charges for equipment may be claimed.

See also: Financial Management in the Managing Awards section of the Research Office website.

SPA Staff are available to assist with valuations and the application of University policy, which can be complex and require the exercise of informed judgment.