University of Colorado Denver Office of Grants and Contracts Cost - PDF document

University of Colorado Denver Office of Grants and Contracts Cost Sharing Cost Sharing is the portion (cost) of a sponsored project or program that is not supported by the sponsor. Cost sharing consists of three types: mandatory, obligatory and voluntary (see separate definition for each type of cost sharing). Cost sharing is most commonly provided through contributed effort by principal investigators or their staff and paid from unrestricted funds, auxiliary and self-funded activity funds and/or gift programs/projects. This policy applies to all federal and nonfederal sponsored programs and includes any commitment by the UCD to support a sponsored project or program with UCD funds. UCD Fiscal Policy http://www.ucdenver.edu/faculty_staff/employees/policies/Policies%20Library/Gr antsContracts/fp4-08.pdf Who is responsible for what? Dept/PI It shall be the responsibility of the principal investigator for the sponsored award and the originating department to ensure that all cost sharing is identified and documented according to this policy and the requirements of the award. Grants and Contracts Responsible for ensuring that dept has identified cost share and ensure that the methods to documents cost share have been setup. The Office of Grants and Contracts will also be responsible for reporting cost share to the sponsor as required. Controller (finance office) The Controller will be responsible for including cost sharing information in the facilities and administrative (indirect) cost proposal.

Types of Cost Share Mandatory Mandatory Cost Sharing is cost sharing that is contractually required by the sponsoring agency. It is required by a sponsor as a condition of an award and usually refers to an overall percentage of total costs to be contributed. When cost sharing is required, and thus mandatory, it will be stated in the award notice . -An example of this would be an award notice that either shows a specific dollar amount to be contributed as cost share or that includes language asking for a certain percentage of cost share. Obligatory Obligatory Cost Sharing is cost sharing that a UCD representative offers to perform as a part of the application/proposal although it is not required as a condition of the award. When the award is given based on a proposal that includes cost share this cost share becomes a commitment . This form of cost sharing is also known as committed cost sharing. This is the most common type of cost share that we have. -An example would be an employee offering effort with no salary coming from the award. In this case some other departmental funds must pay for the time spent contributing effort to the project. Voluntary Voluntary Cost Sharing is cost sharing that is provided in excess of obligatory or mandatory cost sharing requirements. It is a commitment of time or other spending in support of a sponsored program over and above what is required by the award or agreed to in order to obtain the award . Examples of voluntary cost sharing include (1) additional time spent on a program/project that is 5% or more above that which is budgeted or required by the award, (2) laboratory supplies or travel expenditures paid by a source other than the sponsored program/project, (3) cost overruns on a program/project. Voluntary cost share is not in the proposal or award and usually is realized during a project. - A common mistake is to deem effort spent on a project as cost share Voluntary. NOTE- There is no condition that allows unpaid volunteer time to be contributed by a UCD employee all effort offered is paid effort and will be treated as obligatory cost share

Expenses that are Not To Be Used For Cost Sharing 1. Expenditures that are normally charged as indirect , such as administrative salaries or office supplies. 2. Unallowable costs such as alcoholic beverages, entertainment, or any costs specifically disallowed by the sponsor. 3. Equipment unless required by the sponsor. -Equipment cannot be used for cost sharing unless specifically required by the sponsor. Cost sharing with equipment requires each piece of equipment to be tracked separately to be sure that its depreciation is not included in the calculation of the facilities and administrative (indirect cost) rate. This type of transaction is difficult to monitor 4. Service Center expenses cannot be used for cost sharing on a specific award. Expenditures that may be used for Cost Sharing 1. Faculty, staff or student salaries and related fringe benefits. 2. Laboratory supplies 3. Travel 4. Waivers of Facilities and Administrative Costs With the appropriate approvals, waivers or reductions of the facilities and administrative (indirect) cost rate may be used as cost sharing. These waivers or reductions must have prior approval of the awarding agency to count this waived value as cost share contribution and must be formally requested and processed through the UCD waiver approval process if the rate is different than the normal rate. (For Health Sciences Center see UCD fiscal policy “Facilities and Administrative Costs and Distribution of Recovery” Cost Share that is fulfilled by a 3 rd party External In-Kind External In-kind Contributions represent the value of noncash contributions made by sources outside of the UCD for a sponsored program/project. Examples of noncash contributions include non-UCD employees working on a program/project, or the use of donated supplies . External in-kind contributions should be documented and a record kept of the donations. The value is calculated as defined in OMB Circular A-110. The use of in-kind contributions is discouraged because of the requirement for record keeping and the difficulty in assigning a value to the donation . The documentation requirement for this type of cost share is a letter at the award time from the 3 rd party indicating their intention to cost share. The letter should be specific and include time frames, amounts, and indicate that the funding is not

from any federal source. Then at the end of the project, another letter should be obtained, indicating the cost share has been met as proposed. Requirements for Cost Sharing If a cost sharing commitment exists, the expenses used for this purpose must be: 1. Verifiable from UCD records, e.g. Personnel Effort Reports, financial system program/project reports, etc. (Example- a UCD Employee cannot volunteer their personal time. The effort has to come from time paid through UCD) 2. Used as cost sharing for only one sponsored program/project. (Can not be contributed as cost share to any other project) 3. Allowable and allocable to sponsored programs/projects. 4. Necessary and directly related to the program/project objectives. 5. Provided for in the approved budget when required by the awarding agency. 6. Not paid by the Federal government under another award, except where authorized by Federal statute to be used for cost sharing. (Cost share can not be funded by any another sponsored project unless both sponsors give prior written approval) 7. Incurred during the applicable award period of the grant or contract. 8. Recorded in a separate program/project if there is a specific mandatory dollar amount of cost sharing or non-payroll obligatory cost sharing. 9. Recorded in a separate program/project if there is a cost overrun of $50,000 or more of non-faculty/professional salary/benefit expense or cost overrun of non- personnel expenses.