University Corporation for
Atmospheric Research
Finance & Administration
This guideline is designed to assist divisions and programs in understanding when cost sharing may be required to support a project, what types of costs would be eligible to meet a cost share obligation, and how divisions and programs can obtain the required internal approvals when cost share is contemplated in a proposal.
A. Matching, cost sharing, and cost contributions are all terms used to refer to the non-federal share of project costs. In some programs, these requirements are mandated by legislation or regulation. Whether mandatory or voluntary, any cost sharing which has been specifically committed to a program must be separately identified in UCAR's records. Regardless of how it originates, cost sharing represents a UCAR commitment to provide non-federal resources to a sponsored project.
B. The two categories of cost sharing are:
A. Direct Costs are costs that can be specifically identified with a particular project, program, activity or sponsored account at UCAR.
B. Indirect Costs are costs that cannot be readily and specifically identified with a specific project, program or activity but which provide an overall benefit to UCAR and sponsored agreements.
C. Matching Contribution is a form of cost sharing. It is the amount pledged by the institution or a third party to match some portion of funds provided by the primary sponsoring agency. Matching contributions may be in any form, including non-federal costs incurred by UCAR and in-kind contributions made by third parties.
D. Third Party In-Kind Contribution is a non-cash contribution to a sponsored project or program, which is provided by a party other than either UCAR or the primary sponsoring agency. Third party in-kind contributions may be in the form of services directly benefiting and specifically identifiable to the project or program, equipment, supplies, or use of space.
E. Solicited Proposal is a proposal that is submitted to NSF or other federal sponsor in response to an NSF or other agency program solicitation or in response to requests directed to UCAR from an NSF or other agency Program Official, Program Officer, Manager, or Director.
F. Unsolicited Proposal is a proposal submitted to NSF or other federal sponsor that was not submitted in response to an NSF or other agency program solicitation or, in the case of NSF, was not requested by an NSF Program Official, Officer, Manager, or Director.
G. Statutory Cost Sharing is mandatory cost sharing in accordance with Congressional requirements (e.g., NSF/UCAR Cooperative Agreement ATM-0301213 to NSF, Article 23, requires that UCAR share (1%) in the costs of research projects resulting from unsolicited proposals).
Cost sharing should generally be limited only to those situations where it is mandated by the sponsor. Voluntary cost sharing is discouraged and should only be offered in unusual cases where it is clearly necessary because of the nature of the program. In all situations, the use of cost sharing should be kept to a reasonable level because of the burden that cost sharing places on institutional resources. Proposals with cost sharing components must be reviewed, and the funding source(s) approved (see 4.C below), before the proposal is submitted as noted in the entity's pre-award procedures.
A. To be allowed as cost-shared expenses, costs must be:
• Allowable and allocable under federal cost principles (OMB circulars A-122 and A-110) and the terms of the sponsored agreement.
• Necessary and directly related to the project objectives.
• Capable of being quantified and documented.
• Must originate from a non-federal fund source.
• Must be incurred within an award's period of performance.
B. There are three general restrictions on costs that may be used for cost sharing:
• If the costs are used as cost sharing on a federal program, they may not be paid or used as cost sharing on another federal program.
• Costs classified as indirect costs, such as administrative and clerical salaries, may not be used as direct cost sharing.
• Funds, in-kind contributions, or donations from a federal source may not be used to meet a cost-share obligation.
C. Examples of allowable forms of cost sharing:
• STORM funds
• UCAR general fund
• University partners – non-federal sources, etc. or in-kind contributions.
• Donated equipment by an external non-federal source.
• Third party non-federally funded in-kind contributions. When the contribution is in the form of personal services, the contributor must certify that the amount cost shared is comparable to the individual's regular rate of compensation. When contributions are for other than personal services, the provider must state the fair market value of the item.
A. The named principal investigator (PI) on the award is responsible for:
i. Ensuring that cost sharing commitments have been met and for understanding the award's cost sharing requirements.
ii. Informing, in a timely fashion, the entity budget office, the Office of Sponsored Agreements, and Finance of the cost share commitment.
iii. Informing, in a timely fashion, the entity budget office, the Office of Sponsored Agreements and the division/program project accountant, of any changes in the cost share commitment or the division/program's ability to meet and/or document the commitment(s).
B. The entity budget office is responsible for:
i. Reviewing Request for Proposals (RFP) to determine if a cost share commitment is embedded in the RFP.
ii.. Assisting the division/program with the interpretation of source requirements.
iii. Reviewing and approving the cost sharing requirements before sending to the Vice President for Finance and Administration (or her/his designee) for approval and proposal submission.
iv. Reviewing the cost share plan to ensure the PI has accurately and completely described how all cost share requirements will be met.
C. The Sponsored Agreements Office (SAO) is responsible for:
i. Upon request, SAO will review Request for Proposals (RFP) to determine if a cost share commitment is embedded in an RFP.
ii. Reviewing the proposal for any cost share commitment at the point of award.
iii. Reviewing the award language prior to award and notifying the entity budget office, Finance, and the division/program if the award terms are accepted.
iv. Tracking the certifications required per the award.
v. Assisting the division/program with the interpretation of source requirements.
D. The Contracts Office is responsible for:
i. Incorporating cost share requirements into subawards, if required by the terms of the prime award, or as requested by a UCAR division/program.
ii. Obtaining cost share certifications from subrecipients.
iii. Annually reporting all cost share compliance or non-compliance to the SAO.
E. The Finance Office is responsible for:
i. Upon notification of a cost sharing requirement in an award, working with the division/program to develop an accounting procedure to track cost share amounts. The procedure will vary depending upon cost share type.
ii. Working with the division/programs on reporting needs.
iii. Assisting with the interpretation of whether a source meets an awards requirement(s).
iv. Verifying the total amount of cost sharing that is reflected in UCAR's accounting system annually.
v. Assisting in the valuation of any in-kind contributions.
No proposal or pre-proposal will be presented to a funding agency without the process described in this policy being followed. Commitments presented in a pre-proposal are binding and must be approved through proper channels. Failure to do this may result in the proposal being withdrawn and/or disciplinary action.
All expenses that are incurred by programs/divisions to meet a cost sharing requirement will be tracked in an account established for the accumulation of these expenditures. These expenses will be documented in the same manner as expenses charged to sponsored projects. For mandatory cost sharing, the cost sharing actually provided and reported must be at least the amount required by the terms of the award. Throughout the project, the PI and department are responsible for monitoring the actual contribution to the project and ensuring that the cost sharing requirement is met and properly recorded.
Questions concerning this policy and its requirements should be addressed to the individual entity budget offices, or to the Sponsored Agreements Office.
Revised 1/2004