Cost Sharing on Sponsored Programs

Cost sharing (or cost matching) refers to the cost of a sponsored activity not paid by the sponsor (2 CFR 200.306OMB A-110.C.23). 

UM strongly discourages cost sharing unless required. 

Cost sharing commitments that are not mandatory are to be detailed in non-quantifiable language:

Non-quantified:  “To accomplish the goals and objectives of this project, the institution will provide the resources and technical support as required for the successful completion of the activity."

Quantified:  “To accomplish the goals and objectives of this project, the institution will purchase 15 laptop computers and pay the salary of a full-time technical support position.”

Considerations during proposal preparation

Cost share must be committed at proposal stage, adequately documented, and: 

  • allowable as a direct charge to the activity;
  • allowable by the sponsor; and,
  • expended during the award's period of performance,

Cost sharing can be met through:

  • institutional mechanisms - UM distributes a significant portion of institutional F&A recovery to the academic deans.  As a result, cost sharing requirements usually are met through the academic sector.  Discuss with your Chair/Director and your academic Dean. In rare circumstances, a follow-on request may be made to the Vice President for Research.  Such requests must be in writing and detail amounts secured from the College/School. 
    • time and effort;
    • institutional funds;
    • space if normally rented or leased to the public and a published rental/rease price is available;
    • unrecovered F&A - if allowed by the sponsor and institutionally approved when appropriate - is calculated at UM’s appropriate federally-negotiated rate for the activity
      • if waiver is approved in advance by UM's VPR > Ex:  If a project allows but restricts F&A, and the sponsor allows and University officials have approved use of unrecovered F&A, cost share is calculated at the fully-negotiated federal rate, less the dollar amount of F&A assessed, not to exceed the amount required by the sponsor.
      • if sponsor limits recovery and allows unrecovered portion to be used > Ex:  If a project prohibits F&A, and the sponsor allows and University officials have approved use of unrecovered F&A, such cost share is calculated at the fully-negotiated federal rate, not to exceed the amount required by the sponsor.
  • other sponsored activity with prior written approval from the sponsor (rarely is cost match allowable from one federal award to another federal award);
  • program income; and,
  • third party cost share
    • proposed expenditures must be caculated at a rate appropriate for the cost share activity proposed,
    • use of space if normally rented or leased to the public and a published rental/rease price is available, and,
    • a letter of commitment is required at proposal stage from the third party detailing the cost match to be provided.

All cost share, exept third party, is assessed F&A as appropriate for the activity.

Mandatory vs voluntary

Mandatory Cost Share – Quantified resources are required by the sponsor as a published condition of funding; therefore, cost share is submitted, recorded, AND reported.

Voluntary Cost Share – Quantified resources offered in the proposal

  • Voluntary Committed:  The Uniform Guidance states that voluntary committed cost sharing is not expected for federal research proposals (2 CFR 200.306) and cannot be used as a factor during the merit review of applications or proposals.  However, it may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. When an award budget incorporates voluntary cost share into total project costs, it becomes a binding commitment and the institution must include it in financial reporting to the sponsor.  [ex: Non-federal equipment, supplies, etc.]
    • It is submitted, recorded, and reported; ORSP staff will notify PI when reporting requirements are met, at which point documentation will cease.
    • Note:  If full F&A is allowed by the sponsor and the PI receives permission to waive recovery, the amount unrecovered becomes voluntary committed cost share.
  • Voluntary Uncommitted:  Faculty and employee effort (including senior researchers) that is over and above that which is budgeted. 
    • It is NOT submitted, recorded, NOR reported;
    • "Federal voluntary uncommitted cost share should be treated differently from committed effort and should not be included in the organized research base for computing the F&A rate." (per OMB memo 1/5/01)

Submitting, recording, and reporting during award management

Submitting – Done by the PI or department and given to ORSP ("submitted") on appropriate form (either Third Party Contribution or UM Matching Funds). To submit Time & Effort as cost share, use the T&E Report; cost share is reported on the right side of the page with the index and percentage and authorization initials are required.  

Recording – Upon receipt by ORSP, information is added to the official project file and the cost share database (“recorded”).

Reporting – ORSP reports to the sponsor per requirements or request (“reported”).