Definitions

Cost sharing - Cost sharing is the portion of a project or program cost not borne by the sponsor. It is the University's share in the cost of conducting the project/program. Cost sharing occurs either when a sponsor requires, or the University commits, funds beyond those awarded by the sponsoring agency to support a particular grant or contract. 

Cost sharing may be required by federal sponsors, and the obligation must be met using non-federal funds. Only charges that would be allowable as direct costs to the award are allowable as cost sharing. Federal flow through funds may not be used as a cost sharing source unless prior written approval has been received from both the federal sponsor and the flow through sponsor.

The "cost share" pledge may be either a fixed amount of money or a percentage of the project costs. The term "cost matching" often refers to cost sharing where the amount from the sponsor is equal to the amount from the cost share partner. This is also known as dollar-for-dollar cost sharing or cost matching.

The University of Washington (UW) recognizes five types of cost sharing:
• Mandatory (M): Cost sharing that the sponsor requires as a condition of the award.

• For example, if the total cost of a project is $150,000, the sponsor might award $100,000 and require that the University provide (or find an outside source to provide) the additional $50,000 from non-federal funding sources.
• The sponsor may require the University to provide either a fixed amount of money or a percentage of the project costs as cost sharing.
• The sponsor and the University agree on the terms of the mandatory cost sharing during the initial negotiation of the grant or contract and the conditions are written into the award.

• Voluntary Committed (R): Cost sharing that the PI commits in the project proposal budget or the budget justification that is not required by the sponsor.

• The University discourages cost sharing commitments when not required by the sponsor.
• The commitment is expressed as a dollar amount or a percent of effort.

• Shift (S= Long term shift) or (SS=Short term Shift): Cost share that is created when a faculty member moves their committed effort from being paid by the award to being paid from non-grant sources.

• A short term shift is for a period less than 6 months in duration and does not require a cost share addendum (GC1 addendum) but is noted on the FEC.
• For a long term shift of 6 months or more, the department should submit to GCA a cost share addendum and calculator spreadsheet. GCA enters the commitment into the cost share module. http://f2.washington.edu/fm/maa/fec/managing/shifts-in-level

• Salary Cap(C): Cost sharing required of faculty whose Institutional Base Salary (IBS) exceed the mandated Federal salary cap.

• Salary Cap cost sharing is required by:
  • National Institute of Health (NIH)
  • Substance Abuse and Mental Health Services Administration (SAMHSA)
  • Agency for Healthcare Research and Quality (AHRQ)
  • Center for Disease Control (CDC) (after December 23, 2011)
  • Health Resources and Services Administration (HRSA) (after December 23, 2011)

For more information on Salary Cap Cost Share please see the Salary Cap Limitations information published by Management Accounting and Analysis.  

• “K” award cost share (K): Cost share that occurs when the combination of the required level of effort and salary limitation on the award does not allow for the corresponding level of the faculty member’s salary to be paid from the “K” award.

• For Example; A “K” award often requires a minimum 75% effort and limits the salary amount to be funded at $95k per year. If the faculty member’s Institutional base salary is $150k, 75% is $112.5k. The difference between $112.5k and $95k ($17.5k) is often cost shared.

NOTE: Salary cap(C) and K award (K) cost share are not included in a proposal as cost share and no cost share commitment is entered into the eFECS cost share System. However, both Salary Cap and K award cost share will be noted on the FEC. 

Contribution Sources

Circular A-110, Uniform Administrative Requirements for Grant Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, defines appropriate sources of cost sharing. According to A-110, all contributions, including cash and third party in-kind, shall be accepted as part of the recipient's cost sharing or matching when such contributions meet all of the following criteria:

• Are verifiable from the recipient's records;
• Are not included as contributions for any other federally-assisted project or program;
• Are necessary and reasonable for proper and efficient accomplishment of project or program objectives;
• Are allowable under the applicable cost principles (OMB Circular A-21)
• Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching;
• Are provided for in the approved budget when required by the Federal awarding agency; and
• Conform to other provisions of Circular A-110, as applicable.

The University typically may commit as cost sharing the following non-federal expenditures:

• Faculty salaries and related benefits: information on faculty cost sharing can be found on the Faculty Effort Certification website.
• Non-Faculty salary and other contributions: information on non-FEC cost sharing can be found on the Non-FEC Cost Share Contribution Sources.

NOTE: When committing or reporting university expenditures as cost share, include Facilities & Administrative costs at the negotiated rate and MTDC base prior to any F&A waivers or reductions. The fact that a sponsor limits or prohibits F&A charges on the sponsored agreement does not mean they limit or prohibit F&A as cost share. If the sponsor does specifically limit or prohibit F&A as cost share, place a note on the cost share addendum and use the lower rate.

Process Overview

The following outlines the different stages of an award and the special steps taken when an award includes cost sharing.

• PI—refers to the principal investigator and/or a staff member with delegated authority
• Sponsor--the organization or person providing the grant/contract
• OSP-- Office of Sponsored Programs
• GCA--Grant and Contract Accounting
• MAA--Management Accounting and Analysis
• eFA—electronic Funding Action

PI/Staff Procedure/s

• Prepare and document the cost share pledge:

  • Read GIM 21
  • Contact OSP
  • Formula for Determining the Amount of Cost Share Committed

• Complete Cost Share Addendum

  • Contact OSP with any questions regarding the pledge
• When the budget is established, review the cost share pledge in the eFECS Cost Share Module. Notify GCA through Grant Tracker if any changes need to be made to the pledge.
  • It is the Principal Investigator's responsibility to ensure that the cost sharing pledge on the grant or contract is correct and that it is met on schedule.
• On an ongoing basis, at least quarterly, during the life of the grant, review cost share activity using the Unmet Cost Share Report and/or eFECS Cost Share Module.
• Report and document non-FEC cost sharing on a quarterly basis:  Reporting Non-FEC Cost Sharing 
• Request a reduction or change in your cost share pledge:
  • Grant and Contract Accounting can change cost sharing information without an electronic Post Award Change (ePAC) only in the following situations:
    • when the effort of a faculty member who is not the PI or other “key personnel” identified in the award is substituted for that of another faculty member and the overall dollar amount of the cost share is not reduced,
    • when a cost sharing pledge must be moved to a continuation budget,
    • at expiration, if total amount of cost sharing pledged is based on a percentage of total expenditures and actual cost sharing funds equal that calculated amount,
    • when a faculty member wants to perform cost sharing in a different cycle than that listed in the eFECS Cost Share Module, if that cycle is within the grant period, or
    • when changes to a committed cost share pledge are requested. (However, reductions in overall mandatory cost share must be approved by Office of Sponsored Programs.)
• Most changes to mandatory cost sharing pledges must be reviewed and approved by the Office of Sponsored Programs (OSP) and often by the sponsor. This includes increases or decreases to the percentage of funds pledged or to dollar amounts pledged.
• After OSP reviews and approves a change to a cost sharing pledge, an ePAC is issued with the revised cost sharing addendum and sent to GCA. GCA will update information in the eFECS Cost Share Module based on the addendum included on the ePAC.

References/Regulations

• UW Grants Information Memorandum (GIM) 21 - Cost Sharing Policy for Sponsored Agreement

Office of Management and Budget Circulars:

• A-21 Cost Principles for Educational Institutions
• A-110 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations

Faculty Effort Certification (FEC)

Non-FEC Cost Share Contribution Spreadsheet (MS Excel)

Contacts

• are preparing your proposal or waiting to hear about a submitted proposal, contact the Office of Sponsored Programs via:
  • email osp@uw.edu
  • phone at 206.543.4043
• have cost share questions on your award, contact Grant and Contract Accounting (GCA) via:
  • email gcahelp@uw.edu or through Grant Tracker
  • phone at 206.616.9995
• have faculty effort certification questions on your award, contact eFECS via:
  • email efecs@uw.edu