Policy on Cost Sharing in Sponsored Programs

Policy on Cost Sharing in Sponsored Programs


I. Definitions

Cost sharing occurs when a portion of the total cost of a performing a sponsored program is not provided by the external sponsor and is borne by the University or a third party.

Matching is cost sharing in which there is a specified relationship between the portion of costs provided by the sponsor and the portion provided by the University or third party. For example, in a 1:1 match the sponsor and University would each provide 50% of the total project costs.

Mandatory cost sharing is required by Federal or State statute or by sponsor regulation and published in the sponsor's application guidelines. Failure to include mandatory cost sharing would make an application ineligible for an award.

Voluntary cost sharing is a contribution of resources to a sponsored program when the sponsor does not require the contribution. It includes the full cost shared amount when the sponsor requires none, or any amount greater than that required by the sponsor. Upon award, the University has a binding obligation to provide all of the resources which were included as cost sharing in the application.

Cash contributions are expenditures from University accounts which directly support the sponsored program.

In-kind contributions are goods or services provided as cost sharing in support of a specific sponsored program.


II. Policy

Cost sharing is included in an application to an external sponsor when explicitly required in the sponsor's program announcement, or when it would significantly improve the likelihood of an award. The cognizant dean or designee must approve cost sharing with University resources using Item 21 on the Request for Approval of Sponsored Program. Third party cost sharing must be approved by their authorized official. It is expected that subawardees under a prime award to the University will provide an appropriate level of cost sharing.


III. General Considerations

Because administrators will need to commit UB to expenses and resources, PIs should begin making arrangements for cost sharing as early in the proposal preparation process as possible. It is wise to consult with your Grant and Contract Specialist or Administrator in the Office of Sponsored Programs Administration as one of the first steps in budget preparation to ensure that expenses to be proposed as cost sharing are allowed and, if applicable, an appropriate process is used to determine the value of services contributed by a third party.

In order to minimize the impact of cost sharing commitments they are to be limited to meeting sponsor requirements. On rare occasions, cost sharing beyond the level mandated by the sponsor's program announcement may significantly improve the likelihood of an award. In such instances, the PI should attach a written justification for the requested voluntary cost sharing to the Request for Approval (http://www.research.buffalo.edu/spa/approv.pdf) which details why cost sharing would improve the competitiveness of the proposal.

It is inappropriate for the sponsor's program officials to suggest levels of cost sharing which exceed those specified in the program announcement. Any such suggestions should be brought to the attention of your Grant and Contract Administrator.


IV. Criteria for Determining All owability of Cost Sharing Expenses

In general, cost shared expenses must meet the same standards as expenses made using the sponsor's funds. In addition, cost-shared expenses must:

  • Be allowable under University policy, the specific terms of the award and, in the case of Federal awards, OMB Circular A-21 which is found at http://www.whitehouse.gov/omb/circulars/a021/a021.html
  • Be verifiable in the University's accounting records or those of its fiscal agents (e.g. faculty effort)
  • Be necessary and reasonable to efficiently achieve the objectives of the program
  • Be incurred during the effective period of the award
  • Be, in the case of cost sharing in a Federal award, consistent with OMB Circular A-110 (http://www.whitehouse.gov/omb/circulars/a110/a110.html)
  • Be, in the case of third party in-kind contributions, committed in writing by their authorized official before proposal submission
  • Not be used as cost sharing for any other project
  • Not, in the case of cost sharing in a Federal award, be paid from another Federal award unless authorized by the Federal sponsor
  • Not be for any cost included in the University's Facilities and Administrative rate
  • Not be for salary in excess of any mandatory salary cap (e.g. NIH)
  • Not include waived indirect costs without prior sponsor approval

V. Examples of All owable Cost Sharing Expenses

The following are examples of cost sharing which meet all of the criteria in Section IV. The items are listed in order of increasing burden on the PI and the University for needed documentation and complexity of reporting.

  • Faculty or staff effort on the project, together with associated fringe benefits and F&A (indirect) costs
  • Purchase by the University, in whole or part, of equipment required for and dedicated to the project
  • Travel (U.S. carriers only for air travel)
  • F&A (indirect) costs associated with any allowable direct cost
  • Subawardee or subcontractor cost sharing
  • Third party contributions
  • Contributed University services (e.g. by an instrumentation center with an approved rate schedule)

VI. Expenses Not All owable as Cost Sharing

The following are examples of expenses which are not allowable as cost sharing.

  • Costs associated with use of University space
  • Cost of using any item of equipment purchased with Federal funds
  • Expenses which are not directly connected with performance of the project
  • Expenses which can not be verified in the project accounting records (e.g. office supplies)

VII. Pre-award Procedures

When cost sharing is included in an application, item 21 on the Request for Approval of Sponsored Program must be checked "Yes" and the additional information provided in subsections a and b. If it is not detailed in the application, the proposed cost sharing must be broken out by budget category (salaries, fringe benefits, F&A costs, etc.) on a separate sheet attached to the Request for Approval. If the proposal includes voluntary cost sharing, a justification for the proposed cost sharing must be attached to the Request for Approval. The justification must include specific indicators that the proposed cost sharing will significantly improve the likelihood of an award.

If the proposed cost sharing will include any University resources (e.g. faculty time), a person authorized to commit the proposed resources must initial Item 21 c on the Request for Approval of Sponsored Program. In most cases this will be the Department Chair or Associate Dean. Signature of the Request for Approval by the Department Chair and Dean indicate that they have reviewed and approved the proposed cost sharing and its justification.

If the proposed cost sharing will include resources contributed by a third party, a letter committing those resources must either be included in, or attached to, the application. This commitment letter must detail the resources to be contributed, and be signed by an authorized official of that organization.


VIII. Award Procedures

1. Award Negotiation. Negotiation of any changes in the level of cost sharing should be conducted with the sponsor by your Grant and Contract Administrator in the Office of Sponsored Programs Administration. PI's are not authorized to commit the University to a level of cost sharing greater than that included in the application for funding.

2. Award Processing. Upon receipt of an award document, OSPA will review the cost sharing requirements and, prior to account establishment, ask the PI to confirm the specifics of cost sharing to be met through faculty or staff effort. OSPA will also inform units responsible for meeting cost sharing obligations other than staff effort.

Other post-award procedures involving cost sharing can be obtained from Donna Scuto at 645-5000 extension 1074.