Cost sharing is defined as the financial support given by universities to sponsored projects. Gift-in-kind is interpreted as facilities and infrastructural support.  When cost-sharing or matching funds are required in order to obtain federal funding the University is obligated to comply with federal cost accounting standards.  This means that the University Business Office provides oversight for cost-shared expenses during proposal preparation, award negotiation and throughout post-award reporting of these expenses to sponsors.  Similarly, private sponsors require stringent and consistent accounting procedures as well.

If your RFP budget has a cost-sharing or matching funds requirement the nature of the requirement must be reviewed.  The ORSP together with the Business Office and VPAA will determine whether it will be incumbent upon the University to provide funds or gift-in-kind for shared expenses.  This is a very important consideration.  All cost-sharing expenses must be approved before permission to embark on writing grant proposals is granted.  Once approved, the PI will receive notification from the ORSP that the grant can move towards submission.   Please note that the University will assume the cost-sharing commitment only when required by the granting agency or under the circumstances of improving chances for funding due to the competitive nature of the award.  The amount of cost-sharing will be limited to the minimal amount necessary to meet the requirements of the grant.

Where cost sharing commitments impact academic or calendar year faculty time there may be associated indirect costs. These must be included when drafting budgets.  For most federally supported research, 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).

Bear in mind that when cost-sharing is included in an award budget it is a condition of the award.  This means that the University must provide evidence of compliance if audited. During post-award reporting any cost-sharing commitments must be reflected in the financial records of the program.

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.

The University may choose to establish a specific account for cost-sharing in order to meet the reporting and auditing requirements of the grantors.

For example, the Program Director has committed to cost share 15% of his or her academic appointment in support of a sponsored research project. This commitment should be charged to the assigned cost-sharing account.  Cost-sharing commitments for equipment will be charged to the sponsored project account and funds transferred into this account from the appropriate cost-sharing sources in accordance with post-award reporting requirements.

The time and effort of the faculty and staff designated as part of the cost-sharing commitment will be monitored. Effort certification is periodically reviewed by University and federal auditors to ensure that the University's cost-sharing commitments are appropriately executed and monitored.

Calculating Time/Effort (T/E).  The faculty member's appointment is given in terms of percentage, not hours.  The percent T/E must add up to 100%.

Q:  Can a faculty member's total time commitments on various proposals add up to more than 100%?

Yes.  Theoretically. In consideration of less than 12 month academic contracts summer salary would be over and above the 100%; sometimes called the 120% rule (e.g. U of California). 

Q:  If the cost sharing is significant will the University chose not to submit the grant?

It depends.  Remember, matching funds must be included in the University's budget.  The President will determine whether or not the University can make the financial commitment as required for audit.  The PI may be told "No".  Under these circumstances the PI is encouraged to work with collaborators to see if it is possible to submit a worthy grant through a different institution and subcontract the PIs sponsored effort to Marian University.


Please contact the ORSP or the VPAA.