Unless an eligibility requirement or review criterion (i.e. mandatory cost sharing), cost-sharing as a means of conveying institutional commitment ordinarily should be offered only in exceptional circumstances. In the event of an award, proposed cost-sharing becomes an obligation the University must fulfill. Why? Because tracking cost sharing, which SU has to do if it is included in the budget, budget justification or narrative, is administratively burdensome for all involved. It also has a negative impact on future indirect cost recovery.
For federal awards to be allowable as cost share, contributions must meet the following criteria:
- Are verifiable in SU’s records. Institutional cost-sharing is documented in the University’s accounting system or subsidiary records managed by the Office of Sponsored Accounting. Mandatory cost sharing of sub-awardees is overseen by the Office of Sponsored Programs. The cost sharing criteria presented in the third party’s cost principles will be applicable.
- For SU personnel, “volunteer time” or non-compensated faculty summer effort are not allowable sources of cost-sharing. However, in some instances, third party ‘volunteer’ services may be an allowable contribution for cost sharing or match if the service is essential to the project. See third-party volunteer services below.
- Are not included as contributions for any other federally-assisted project or program. That is, cost shared dollars can be counted once per award.
- Are necessary and reasonable for proper and efficient accomplishment of project or program objectives. That is, are required to perform the awarded project.
- Are allowable under the applicable cost principles and also conform to other provisions in the cost principles.
- Are not paid by the federal government under another award, unless 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.
- Unrecovered indirect costs may be included only with the prior approval of the Federal sponsor.
In summary, if the item or expense can’t be charged to the sponsor, it can’t be used as cost sharing, unless expressly permitted in the solicitation or award materials.
Cost-sharing is typically provided as:
Cash: contributions under direct control of SU
In-kind: those contributions not under the control of SU, e.g., the value of contributions provided by third parties. At proposal submission, such contributions must be documented in a letter of commitment signed by an individual authorized to represent the organization.
Match: a type of cost-sharing where a sponsor will award funds in fixed proportion to those provided by sources, e.g. 1:1 match corresponds to $1 from non-sponsor sources for each $1 of sponsor support. How this is expressed can be confusing; please contact OSP for guidance on interpretation.
Third-party volunteer services: Rates for volunteer services should be similar to those paid for similar work at SU or in the labor market where provided. Documentation for volunteer services includes all of the following: description of service provided, date(s) of service, hour(s) or service provided, disclosure of the value per hour of service, volunteer’s printed name and signature certifying that they provided the service described and signature of SU project supervisor or program director. There should also be other source documentation indicating why the volunteer service is essential to or integral part of the funded program.
Possible Sources of Cost Share
When cost sharing is required, possible cost sharing sources that advance project objectives might include:
- equipment purchased during the award period
- academic or calendar year personnel effort
- departmental or unit support for travel, service agreements, materials and supplies, etc.
- tuition
- NOTE: Because tuition credits actually used rarely match proposed usage, OSP discourages the use of tuition expenditures for cost sharing unless conservative dollar values and corresponding credits required are used.
In the event of award: If cost sharing from proposed sources is not met, the obligation must be fulfilled from other sources.
Voluntary committed effort: Effort for key personnel not charged to the sponsored project. This is a form of cost sharing, and creates an obligation that must be fulfilled in the event of an award. Voluntary committed effort should only be used when suggested by the sponsoring agency as a proposal review criteria.
Salary cap: The National Institutes of Health and some other agencies in the Department of Health and Human Services have a mandated salary cap, which is tied to the Executive Level I of the Federal Executive Pay Scale. The effort committed defines the obligation to be fulfilled; the cost differential between the salary cap and the faculty member’s salary is considered cost sharing.
Voluntary uncommitted effort: Effort devoted over and above what was expressly committed to a project. Syracuse University ordinarily discourages the documentation of voluntary uncommitted effort in the PS accounting system. However, voluntary uncommitted effort may be noted in the “comments” section of ERS at effort.