July 31, 1997
There has been a renewed emphasis placed on cost sharing and its administration by the Federal government. This document replaces previous Important Notices pertaining to cost sharing. In order to include an item as cost sharing it must be:
B. Not included as a contribution to another grant or contract account without agency approval
C. Necessary and reasonable for project
D. Allowable under applicable cost principles
E. Not funded from another grant or contract without agency approval
F. Incurred within the time frame of the project
Other important issues:
- Unrecovered indirect cost can be used as cost sharing only with agency written approval.
- Salaries and benefits and equipment purchased for the project are the preferable methods of cost sharing because they are easily verifiable.
- Supplies and other costs should only be used where cost sharing is mandatory and cannot be met through salaries, benefits or equipment.
- Cost sharing should be limited in proposal preparation to only those costs making a direct contribution to the project. Excessive cost sharing causes additional work on everyone's part in verification and has an adverse effect on indirect cost rates. Voluntary cost sharing is discouraged.
- Cost sharing identified in the text of the proposal must be listed in the budget.
- All sources of university cost share should be easily identifiable in the budget. For example, differentiate between costs contributed by the department versus those contributed by the school or another unit.
- In order to set up a new award and to ensure correct entry into the A-21 Effort Reporting System, the following information should be supplied by the project director on an internal document for all salary items of cost sharing if they are known at the time of submission:
Full Name, Position Title or Position Classification, Source Account, Percentage of Effort or Dollar Amount supported by period.
- Information for non-salary items of cost share will be collected from the department at the time the cost share report to the agency is prepared. This information must include specific detail on the type of cost, document number and the date the cost was incurred. Original supporting documentation must be retained in the department as it is subject to audit by Internal Audit and the federal government.
- A letter of support, with specific reference to the cost sharing, from a third party source, must be included with the proposal. Written confirmation of third party support will be required at the time the final cost sharing report is prepared for the agency.