Office of Sponsored Programs - 500.07 - Cost Sharing

Title

Office of Sponsored Programs - 500.07 - Cost Sharing

Purpose

In conjunction with Federal regulations governing allowability, the University offers this operating standard to provide clarification and guidance as to University practices regarding cost share for sponsored projects.

Policy Statement

Mandatory cost-sharing may be imposed on the University by a sponsor as a condition of research or training support. Cost-sharing obligations must be kept within reason and capable of being fulfilled from acceptable resources available to the Principal Investigator (PI), department, school, or center involved. There must be no doubt concerning the ability of the University to meet the commitment from acceptable resources.

Voluntary cost-sharing from the University results in unfavorable financial conditions and is strongly discouraged. A proposal containing voluntary cost-sharing that is accepted by the sponsor can be a financial liability since the University becomes legally bound to adhere to the cost-sharing terms and conditions throughout the life of the award.

I. Criteria for Allowability

Cost-sharing involves the commitment of University funds or resources and can constitute mandatory, voluntary, matching, contributed effort, and in-kind methods. To be considered acceptable as Federal cost-sharing or matching costs, contributions to a project must meet each of the following criteria:

• Verifiable from University records
• It must be defined as an acceptable form of cost-sharing for that specific project, and it cannot share duplicity with any other program
• Necessary and reasonable for proper and efficient accomplishment of project objectives
• An allowable charge according to applicable cost principles
• Not chargeable to any other grant or contract

II. Types of Cost Sharing

Matching

This involves a University contribution of hard dollars, or funds, specifically appropriated for, and allocated to, the project. The allocation and billing of project costs are processed according to the terms of the sponsored agreement.

In-Kind Contributions

This is often encountered in public service-oriented projects, usually involving the contribution of services from outside the University, such as a donation of time. Although the University does not pay for such services, they still require documentation. Records should contain the dates worked and the hours donated by the individual. The value of such services is calculated at the usual and customary rate for the area unless otherwise specified by the sponsor.

Since the contribution of resources under an in-kind agreement is not under the University's control, much care must be exercised before entering into such agreements. Once active, in-kind contributions are frequently monitored to ensure that the cost-sharing agreement is fulfilled.

Failure to meet or adequately document in-kind contribution requirements could result in the disallowance of a pro-rated portion of University-incurred costs, which could prove to be detrimental. The Office of Sponsored Programs (OSP) should be notified immediately if such problems are encountered.

Salary Caps or Limits

The Appropriations Act of the Department of Health and Human Services places a salary limitation, or cap, on grants and contracts from the National Institutes of Health (NIH) and Substance Abuse and Mental Health Services Administration (SAMHSA). Under this limitation, the amount of direct salary of an individual that can be charged to the grant is limited to the rate approved by the agency. Individuals charged to these programs earning more than the limitations for that fiscal year require a cost-sharing commitment by the department to document that the rate does not exceed the limitations.

III. Contributed Effort

While various approaches to cost-sharing are often used in combination with a particular project in satisfying a cost-sharing obligation, the most commonly used at the University is contributed effort.

Faculty and Staff Funded by Non-Sponsored Sources

As a matter of practicality, where cost-sharing is assumed and when circumstances permit, the University recommends the use of non-Federal sources to fund faculty and staff time contributed to the project. This is the method most frequently used, as it is the most practical for record keeping. With the acceptance of a properly annotated personnel action form, cost-sharing dollars are automatically accumulated on the associated expenditure report and embodied in the effort certification.

Documentation of Established Criteria

All cost-sharing is documented in accordance with established criteria under Federal cost principles for educational institutions, 2 CFR §200.306. Therefore, it is crucial to accurately delineate an individual's participation or involvement on a project in the proposal. This helps to avoid any misunderstandings regarding cost-sharing obligations intended by the University. Effort Must Be Documented through the Effort Certification and Reporting Technology system (ecrt). Specific commitments of effort must ultimately be embodied in a cost-sharing budget and documented in ecrt. Regardless of the selected approach, faculty and staff for whom contributions of effort are volunteered are responsible for awareness of and concurrence with those commitments as they are required to fulfill them.

Related Requirements

• Research Administration Glossary at Carolina
• 2 CFR 200.306 - Cost Sharing or Matching

Unit Policies, Standards, & Procedures

• OSP Operating Standard 600.05 - Effort Reporting

Contact Information

For questions regarding this operating standard and its related procedure, please contact SponsoredPrograms@unc.edu.

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSP Staff assignments are found in RAMSeS or on the OSP website.

History

The operating standards in the Office of Sponsored Programs Operating Standards & Procedures Manual supersede any OSP operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.