What is Cost Sharing?
Cost sharing or matching means that portion of project or program costs not borne by the funding agency. It includes all
contributions, including cash and in-kind, that a recipient makes to an award. If the award is federal, only acceptable non-federal costs qualify as cost sharing and must conform to other necessary and reasonable provisions to accomplish the program objectives. Cost sharing effort is included in the calculation of total committed effort. Effort
is defined as the portion of time spent on a particular activity expressed as a percentage of the individual's total activity for the institution.
Cost sharing is auditable and must be allowable under cost principles and verifiable to records.
An example of cost sharing is any personnel listed on the project budget (showing % effort) for whom no salary is requested in the budget, or if salary is requested, it is less than what is needed to pay for the entire % effort. In this instance, the individual's portion of salary equivalent to that % effort not in the budget, in addition to the fringe benefits and indirect costs associated with those costs, would be considered cost sharing.
Mandatory Versus Voluntary Committed Cost Sharing
There are two types of cost sharing that must be documented and tracked:
Requirements for Cost Sharing Allowability
- Mandatory cost sharing is required by sponsor as a condition of obtaining an award. It must be included or a proposal will receive no consideration by the sponsor.
- Voluntary Committed cost sharing represents resources offered by the university (documented and quantified in the proposal) when it is not a specific sponsor requirement. It becomes a binding commitment which the university must provide as part of the performance of the sponsored agreement.
Cost sharing is allowable under the following circumstances:
Sources of Cost Sharing
- Verifiable from recipient's records
- Not included as contributions for any other sponsored or federally assisted project or program (cannot be used twice)
- Necessary and reasonable for proper and efficient accomplishment of project or program objectives
- Allowable under applicable cost principles (OMB Circular A-21)
- Not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching
- Included in the approved budget when required by the Federal awarding agency
- Expended during the performance period
- University funds
- Unrecovered Facilities and Administration (F&A) costs
- Third party contributions
- Other sponsored projects (non-federal)
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