Forms & Tools
Cost sharing is the portion of project costs not reimbursed by the sponsor and may be in the form of cash or in-kind contributions. The general policy of the University is to assume a cost-sharing commitment only when required by the sponsor or by the competitive nature of the award, and then to cost share only to the extent necessary to meet the specific requirements. All cost-sharing commitments must be included on the Proposal Routing Cost Share Form and must be approved by the University RC-unit responsible for these funds. Cost sharing is most commonly required under federally-sourced grants.
The cost-sharing requirements of sponsors vary. Grants often are viewed as a form of financial assistance, and some sponsors consider it necessary to obtain cost-sharing to ensure that the University has a commitment to the proposed project. Nonprofit organizations generally will seek cost sharing by declining to pay certain costs (e.g., faculty time, staff benefits, indirect cost, etc.). Industry sponsors generally do not require cost sharing. In the case of federal research proposals, cost-sharing is not expected, nor can it be used in the review process, unless a cost sharing requirement is allowed under the awarding agency’s regulations and specified in a notice of funding opportunity (see 2 CFR 200.306).
The federal Uniform Guidance (2 CFR 200.306) states that:
“For all Federal awards, any shared costs or matching funds and all contributions, including cash and third party in-kind contributions, must be accepted as part of the non-Federal entity's cost sharing or matching when such contributions meet all of the following criteria:
(1) Are verifiable from the non-Federal entity's records;
(2) Are not included as contributions for any other Federal award;
(3) Are necessary and reasonable for accomplishment of project or program objectives;
(4) Are allowable under Subpart E—Cost Principles of this part;
(5) Are not paid by the Federal government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs;
(6) Are provided for in the approved budget when required by the Federal awarding agency; and
(7) Conform to other provisions of this part, as applicable.
Unrecovered indirect costs, including indirect costs on cost sharing or matching may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency. Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount which could have been to the Federal award under the non-Federal entity's approved negotiated indirect cost rate.”
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.
- 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.
Matching Funds represent a form of required cost sharing at a significant level, for example, two Federal dollars to one non-Federal dollar or one Federal dollar to one non-Federal dollar.
Uniform Guidance 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.
Research Administrators Training Series on Cost Sharing.
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.
PI Essentials: Guidance Document #6
©2012 UNH Sponsored Programs Administration, adapted with permission from Massachusetts Institute of Technology Office of Sponsored Programs