Cost Sharing or Matching – B06
Purpose
The purpose of this procedure is to ensure compliance with OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR §215.23(a)(5), §200.29, and §200.306. Cost sharing is any project cost that is not reimbursed by the sponsor to support the scope of work defined by the sponsored (federal or non-federal) award. Cost sharing is funded by OHIO or, in some cases, a third-party resource, generally a non-federal sponsor.
Scope
This procedure applies to all sponsored projects. All individuals involved with the administration and conduct of sponsored award activities, including central and departmental sponsored project administrators, principal investigators, and other research personnel are responsible for monitoring cost share commitments.
Procedure
Unless the sponsor requires a commitment, OHIO strongly discourages cost sharing. When there is documented evidence that the commitment is necessary to ensure the competitiveness of the OHIO proposal, school officials may allow these commitments by approving them in writing and managing the committed resources.
All cost share commitments must be identified and approved prior to establishing a DGM.
Sources of Cost Sharing Contributions
University Cost Sharing: Commitments that are paid using University funds such as gift, endowment, or other non-sponsored sources.
Sponsored Cost Sharing: Commitments that are paid using non-federal sponsored awards at OHIO. Prior approval must be obtained from authorized official of the cost sharing source. These types of commitments must be tracked manually by the department managing the award. Note that expenditures on a federal sponsored project may not be used to meet any cost sharing requirements.
In-kind Cost Sharing: Third party non-cash contributions of time, talent, or resources from OHIO or donated by third parties for which OHIO is responsible. Third-party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, or goods and services directly benefiting and specifically designated for the project or program.
Note: In certain cases, sponsored cost sharing commitments are presented in proposals to sponsors before those cost sharing funds are secured. If the anticipated cost sharing funds are not available, the school, department, or center will be responsible for arranging an alternate source of the required cost sharing. If no alternative cost sharing can be identified and the sponsor is unwilling to renegotiate the terms of the cost share, OHIO may be forced to decline the award.
Types of expenditures that may be cost shared
Cost-sharing commitments can be met using direct or indirect costs that are allowable, allocable, reasonable, and consistently accounted for by the University. Since all cost-shared expenditures must be verifiable from University records, the use of companion accounts is required for all cost-shared direct expenses that can be coded using a sponsored activity value with a non-sponsored fund value. If tracking via companion accounts is not possible, the school must track the cost sharing manually.
This procedure describes two categories of cost sharing expenditures: Section A includes direct costs (effort, equipment, and other direct expenses) and Section B includes indirect costs (unrecovered overhead on sponsored expenditures, overhead on cost-shared University resources, and costs normally considered indirect).
Note that there is often more flexibility with cost sharing on non-federal awards.
Direct Costs
Committed Effort: Percentage of a researcher's time that has been pledged to a project but not reimbursed by the sponsor. PI/PDs can commit to expend faculty or research staff effort on a sponsored program without charging commensurate salary to the sponsored fund. Such a commitment of effort binds the University to contribute research staff or faculty time to the project and to record salary expenditures, including fringe benefits, in a manner that makes the expenditure verifiable from University records. Like all committed effort, cost-shared faculty effort must be effort-reported.
Costs representing salaries over regulatory caps, such as the National Institutes of Health salary cap, cannot be used to meet a cost sharing commitment.
Equipment: If the purchase of new equipment is necessary for the project or the sponsor mandates the purchase of new equipment, then the acquisition cost of specific equipment may be offered as cost sharing. Purchase and acquisition must occur during the period of performance of the project, and procedures must be in place to ensure that the depreciation on such equipment is not included in the indirect cost rate calculation.
Existing equipment cannot be offered as cost sharing, since the depreciation of OHIO-owned equipment is included in the OHIO's indirect cost rates and the equipment was not purchased for use on the project. Rather than committing the use of OHIO-owned equipment as cost sharing, proposals should characterize the equipment as "available for the performance of the sponsored agreement at no direct cost to the project.
Other direct costs: Most other costs that could be charged (allowable, allocable, reasonable, and consistently treated) to a sponsored project can be cost-shared. The following are examples of other direct costs that may be cost-shared:
- Travel expenses
- Laboratory supplies
- Equipment items that do not meet the capitalization threshold (currently $5000)
Unrecovered Indirect Costs (Formerly Facilities and Administrative Costs)
Indirect costs may be offered in a proposal to meet cost sharing requirements imposed by the sponsor, but they are not considered to be cost sharing in any other situations. There are three ways to cost-share indirect costs. Note that none of these cost-shared indirect costs are recorded in OHIO's General Ledger - they will be calculated and reported manually by OSP.
Indirect costs not collected by the University when a sponsor does not pay the full negotiated indirect cost rate.
Indirect costs that are associated with the direct cost sharing on an award may be used.
Indirect cost expenses treated as direct cost sharing (non-federal awards only), such as depreciation, administrative support, rent, etc...
Cost Share Approvers
Principal Investigators (PIs) are responsible for representing cost sharing correctly in the budget and the scope of work for each sponsored program in accordance with OHIO policies, and for identifying OHIO or third-party resources to be used to meet cost-sharing commitments. Upon award, PIs are responsible for ensuring that cost-shared commitments are fulfilled and that cost-shared expenses are posted to the correct accounts.
Department/unit-level officials are responsible for minimizing cost-sharing by ensuring that commitments are not made in proposals unless required by the sponsor. Departments will provide details of the account coding for cost-sharing accounts, ensure that shared costs are incurred in the companion accounts, and ensure that the same resources are not offered as cost sharing on more than one project. In cases of cost sharing involving indirect cost recovery, such as unrecovered indirect costs or indirect costs on cost-shared University resources, the department and ORSP must work together since the OHIO General Ledger will not allocate indirect costs to non-sponsored funds. Departments will work with ORSP when costs normally considered indirect, such as rent or telephone costs, are calculated and considered as cost sharing. In the case of donated services used for cost sharing, the department is responsible for determining and documenting the value of those services for review by Grants Accounting. Departments must submit third-party cost-share documentation to Grants Accounting at least two weeks prior to each reporting/invoice due date.
College/Division level officials are responsible for reviewing proposal narratives for cost-sharing commitments, for minimizing cost-sharing commitments, and for providing dean’s approval to the central office. College officials are responsible for managing the effort reporting process for committed cost sharing and for ensuring that unallowable costs, such as salaries over regulatory caps, are not counted toward cost-sharing commitments.
ORSP and Grants Accounting are responsible for reviewing proposals to minimize commitments of OHIO resources and for reviewing the appropriateness of accounts from which cost sharing has been pledged. The pre-award offices are responsible for ensuring that cost-sharing commitments are approved by responsible officials in the schools. Grants Accounting is responsible for initiating cost-sharing reporting, obtaining documentation of costs incurred to meet cost-sharing commitments, and for including cost-sharing expenses in indirect cost calculations, as appropriate.
Documentation of Cost Share Commitment in the Proposal
Finance and Administration requires a GL default account number from the department on every budget that contains cost share. The GL default account number must be included on the budget template to be uploaded into LEO along with the transmittal form.
See General Ledger Chart of Accounts Quick Reference Guide for proper account structure.
| Example | XX | - | XXXXXX | - | XXXXXX | - | XXXX | - | XX |
| [ENTITY 2] | [SOURCE 6] | ORGANIZATION 6 | ACTIVITY 4 | FUNCTION 2 |
This information must be included on every budget sheet ORSP sends to Grants and Contracts Accounting (GCA) when the budget contains cost share. Since budget sheets vary, depending upon agency and PI, ORSP will ensure the account provided meets the above format. ORSP Managers will ask for this number while discussing budgets with department personnel and PIs. ORSP will not be responsible for the ensuring the account number is correct, since authentication is not possible.
The ORSP Manager will make every effort to include the number in the setup comments, but GCA should always be able to find it on the budget that is attached to the account setup.
Questions
Questions regarding this procedure can be sent to orsp@ohio.edu
Forms/Templates
Contact your Sponsored Programs Manager for the appropriate journal entry template/tool
Roles and Responsibilities
OWNER: PI/PD
CONTRIBUTOR: ORSP, Grants Accounting, CFAO/BUM
APPROVER: Department Chair, Dean
References
OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR §215.23(a)(5), §200.29, and §200.306.
Quick Reference Guide – Cost Sharing and Matching
Review/Revision History
10/25/22 – Revised
2021 - Created