Procedures and Guidance
- Costs Permissible as Cost-Share and Limitations
- Cost Share Process
- Concurrent Effort
- Sponsor Salary Cap
- Unmet Cost Share
Effective December 26, 2014
This GIM describes the University of Washington’s policy for cost sharing on sponsored awards.
Cost sharing on a sponsored award represents a commitment of payment of a portion of the costs of that sponsored award that are not paid or otherwise supported by that sponsor. Cost sharing can be from an internal University source or resources from a non-University source (“third party cost share.”)
Cost sharing from departmental or school resources may result in the redirect of funds from instruction or other public activities to sponsored agreements. Cost sharing also creates additional administrative burden and compliance exposure.
UW Principal Investigators (PIs), Departments, Divisions, Schools and Colleges, Grant & Contract Accounting (GCA), Management Accounting & Analysis (MAA), and Office of Sponsored Programs (OSP).
Cost sharing is discouraged due to the potential redirect of University resources from other University priorities, impact to the research base used in calculating Facilities and Administrative (F&A) cost rates, added exposure under audit for disallowed costs, and the added administrative burden.
The University will propose and/or provide cost sharing when required by a sponsor as delineated in a specific program announcement (mandatory cost sharing). Such cost sharing will be limited to the extent and in the manner so required.
The University may propose voluntary committed cost share when:
- It is a federally funded project or a federal pass-through that uses cost share as a factor in the merit review of the proposal (voluntary committed cost sharing), but only to the extent it is both in accordance with federal awarding agency regulations and the criteria for considering voluntary committed cost sharing during merit review is made explicit in the notice of funding opportunity; or
- It is a non-federally funded project and it is permitted by the sponsor and necessary due to the competitive nature of the award process (i.e., will be or was considered in the proposal evaluation process.)
Units proposing voluntary committed cost share outside of these two scenarios must ensure that a justification is provided, upon request, so that those approving the commitment of cost share are adequately apprised of the reasoning for including it in the proposal.
No form of cost sharing can be proposed or provided when prohibited by sponsor policies, nor can cost sharing be proposed or provided in violation of applicable law, including the Washington State Public Ethics Law, RCW 42.52.
All cost share, including cash and in-kind, must be approved for use by the entity that controls the cost share, verified in official University records, and cannot represent contributions to other Federally-assisted projects. All cost share must be allowable, reasonable and necessary costs to support the project and cannot be costs the sponsor has specifically disallowed. Cost share cannot be used or committed from another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for the award can be applied to cost sharing requirements of another Federal award.
The PI overseeing the award with a cost share commitment must institute processes to obtain, track, document, verify and approve the cost share throughout the life of the award on a periodic basis. Faculty effort cost share is tracked and verified through the electronic Faculty Effort and Cost Share reporting system (eFECS), managed by MAA. Faculty Effort Certification (FEC) reports are generated every 6 months. Non-FEC cost share is reported to GCA quarterly.
Because cost share is a binding requirement of the award, any unmet cost share at the end of the award period may lead to a reduction in the total awarded amount made by the sponsor or may result in the PI providing the commitment from other sources (even if unmet third-party cost share). The cost share obligation must be met in order to close the sponsored award.
Central procedures for tracking cost sharing and related forms and systems shall be established by GCA and MAA.
- Costs Permissible as Cost-Share and Limitations
- Cost Share Process
- Concurrent Effort
- Sponsor Salary Cap
- Unmet Cost Share
Costs Permissible as Cost-Share and Limitations
Faculty Effort cost sharing
University cost share is commonly provided through a portion of the salary (plus related employee benefits and associated F&A) of faculty members participating in the project. Faculty effort may be explicitly quantified in a budget or budget justification as University cost share. It may also be imputed from a commitment of a specified or quantifiable level of effort without specific budgeting of the salary for reimbursement from the sponsor.
Faculty time pledged as cost sharing must be reviewed by the PI and the department (both mandatory and/or committed) to assure the contribution to the project does not exceed 100% effort distribution when certified on the Faculty Effort Certification.
Non-Faculty Effort Cost Sharing
Occasionally, it may be necessary to identify University contributions other than faculty effort to satisfy cost sharing commitments. These contributions may include effort from non-faculty UW employees, supplies, services, or other resources or property used for the project and acquired during the period of the award from non-sponsored funds specifically for the project. All such expenditures that are used to benefit the project must be tracked by the PI or delegate and reported to GCA no less than quarterly.
Third-Party Contributions as Cost Share
Cost share for conduct of the project from non-university sources, including subrecipients, are third-party cost share. This type of cost share may take many forms including the provision of goods and services, volunteer time, non-compensated employee effort, and/or facilities or equipment usage. A grant or gift from a third party specifically to conduct work for the benefit of another sponsor is not considered third-party cost share for reporting purposes.
The value of the third-party cost share must be represented to the University by the third-party based on federal standards for valuing third-party contributions, when such standards are available.
Third-party contributors must agree to the cost share contribution through issuance of a letter of commitment. As the cost-share is met, the third-party must submit a report to the PI of the resources actually provided toward meeting their commitment. This report is normally in the form of a letter on the organization’s letterhead and signed by an authorized organizational official. It is important to note that the PI is responsible for fulfilling the total cost share commitments should third party contributors not meet their commitment.
Costs included in the F&A rate, Unrecovered F&A, and F&A Associated with Cost-Shared Direct Costs
Costs included in the F&A rate are unallowable as direct costs and therefore not appropriate for cost sharing. The requirements for incorporating such costs as direct costs are set out in the Sponsored Program Costing Policy, GIM 23, and apply consistently to costs charged to the sponsor and those that are cost-shared.
F&A costs accrue to cost shared expenses in the same manner as costs charged to the sponsored award. These costs should be determined using the University’s appropriate negotiated F&A rate. Unrecovered F&A costs, including F&A costs on cost shared direct costs may be included as part of the cost share commitment only with the prior approval of the sponsor, unless such sponsor specifically allows unrecovered F&A as a form of cost-share by stating so in the funding opportunity.
Cost Share Process
When cost sharing is mandatory or voluntary committed, the eGC1 cost sharing section must be completed prior to routing. Changes, including additions, to the cost sharing section after the eGC1 arrives in OSP requires concurrence by all prior approvers as well as the cost-sharing unit or party, prior to the application being considered Ready to Submit. Concurrence can be provided to OSP in any manner acceptable to the reviewers, including email, letter, or explicit approval via SAGE.
Advance Budget Numbers
If an advance budget number is requested for an approved eGC1 that includes mandatory or voluntary committed cost sharing, the PI and departmental personnel must agree to manage the cost sharing requirements or commitments as part of the fiscal terms associated with an advance budget number under procedures established by GCA.
Time of Award
When an award is received, the Office of Sponsored Programs will request the cost share addendum (see also cost share addendum instructions). The faculty effort cost share calculator is also required if any part of the cost-share is faculty effort. Use department and school procedures for obtaining required approvals, such approval representing acceptance of compliance with GIM 2, and then submit to the OSP requestor. OSP will include the cost share addendum with the award materials sent to Grant and Contract Accounting (GCA). OSP reviews the addendum to ensure it meets the cost share amounts committed in the proposal, and that such cost-shared costs are allowable. Management of cost sharing sources is a fiscal responsibility of the PI.
Faculty effort, both directly charged to the sponsored agreement and cost shared, is documented within the electronic Faculty Effort Certification and Cost Share system (eFECs). Non-faculty effort is reported to GCA by documenting MyFinancial Desktop (MyFD) transaction detail reports or letters from third party contributors to verify the cost sharing.
Faculty Effort Reporting
If the need to revise a cost sharing pledge occurs after the pledge is documented in the University’s eFECS system, and the pledge is merely moved from one quarter to another or if the cost sharing will occur during a no-cost extension, the PI or departmental administrative personnel must notify Grant and Contract Accounting via Grant Tracker.
Reductions to Cost Share Commitment
Reduction to cost sharing commitments must be approved in advance by a sponsor. The University discourages requesting such changes, and any such request must first be approved by the PI’s chair and dean. Any request must include a revised cost sharing addendum, and can only be submitted to the sponsor with the prior concurrence of OSP.
Cost sharing requirements apply to periods of budget extension. During the no-cost extension period, cost share compliance differs depending on whether the previously committed cost share is non-faculty or faculty effort. If cost share is non-faculty, no action is required. It is expected that cost share will continue into extended budget period until commitment is met. However, if cost share is faculty effort, and the faculty effort will continue into the extension period, this represents additional cost share. In this case, the PI must provide a cost share addendum and faculty effort calculator for continuing effort applicable to extension period only. If the faculty effort during the extension is simply unmet faculty effort cost share already documented on a previous eGC1 Addendum, no action is needed in order to extend.
Where specifically allowed by a sponsor (e.g. NIH K series awards) concurrent effort is not cost sharing and is not tracked on the eGC1 Cost Share page or on an eGC1 Addendum.
Sponsor Salary Cap
Personnel compensation in excess of Sponsor Salary Caps (e.g. DHHS Salary Cap) is not tracked as mandatory/committed cost share and therefore does not require submission of an eGC1 addendum. It is tracked by procedures established by Management Accounting and Analysis (MAA).
Unmet Cost Share
It is the responsibility of the PI and the department to monitor that cost share commitments are being met through the life of the award. If it is anticipated that cost share commitments will not be met, the PI must request a reduction in the cost-share commitment by submitting a request to the sponsor through OSP.
Roles and Responsibilities
Principal Investigator (PI)
- Assure that proposed or actual cost sharing is necessary and required or permitted by the sponsor in the manner described.
- Obtain necessary requisite approvals and third-party commitment letters prior to committing cost-share in proposals.
- Ensure third-party contributors understand allowability and documentation requirements.
- Review to ensure that any faculty effort cost sharing falls within the 100% compensated effort that must be distributed in eFECS.
- Complete revisions to cost sharing in line with the process above.
- Report actual faculty cost sharing effort via eFECS.
- Report non-faculty cost sharing by submitting the non-FEC cost share report from MyFD, or documentation from third party contributors, to GCA.
- Monitor the status of cost share commitments on awards.
Chair and Dean level reviewers
- Ensure unit has funds to cover the proposed cost share commitment, and that use of such funds on the award is permitted and appropriate, consistent with academic unit, school/college policies and State law.
Office of Sponsored Programs (OSP)
- Review proposed cost sharing for allowability and consistency with sponsor policy on cost share.
- Ensure cost sharing commitments are accurately represented in sponsor agreements.
- Ensure third-party commitments are certified by an authorized individual
- Complete appropriate and approved cost sharing modifications with sponsors.
Grant and Contract Accounting (GCA)
- Record the pledge of cost share into the eFECS system from the Cost Share Addendum.
- Review and enter non-FEC cost share actually provided and submitted to GCA on the prescribed reports by the PI into the eFECS system.
- Review cost share with departments to ensure the cost share commitment has been met prior to close out.
- Resolve post award cost sharing discrepancies with the PI and departmental staff members.
- Report actual cost share amount to sponsor.
Management Accounting and Analysis (MAA)
- Monitor faculty cost share effort entered by the faculty into the eFECS system from the FEC Report.
- Make available periodic unmet cost share reports to departments.
Concurrent effort (scientific overlap):
Effort funded under a career development award that represents effort that benefits another non-federal award and the goals of the project matches the goals of the career development award.
Cost Share Addendum:
Form used to gather cost-sharing information into categories, for use by GCA when entering the commitment into the eFECS system.
A commitment by an entity other than the sponsor to provide funding or support, regardless of source or form; provided however, de minimis effort is not, in and of itself, cost share to the extent such effort conforms to general University requirements, including effort reporting requirements and applicable law. Conditional commitments or sponsor permitted concurrent effort are not cost sharing.
Faculty Effort Calculator:
Tool used to calculate faculty effort, based on percent effort or dollar amount cost-share commitment. The calculation is then transferred to the faculty effort section of the Cost Share Addendum.
An award to the University of any type (grant, contract, cooperative agreement) that is funded in whole or in part from a Federal appropriation, and that retains its character as a federal award in carrying out the activity.
Mandatory Cost Share:
A requirement by the sponsor for University participation in the costs of the supported activity. A cost sharing requirement may specify a minimum fixed percentage of total project costs, a fixed dollar amount, and/or a level of non-federal participation (effort).
Voluntary Committed Cost Share:
A University contribution of effort or other costs not required by the sponsor as a condition of the award, which have been specifically pledged by quantifying in the proposal’s budget or budget justification. A common example of committed cost sharing is a faculty member identifying a percentage of their University effort on the budget page, or budget justification of their proposal without any corresponding request for funding of that effort.
|Form to document detailed cost share information||Cost Share Addendum
Cost Share Addendum and Instructions
|Tool to calculate faculty effort cost share||Faculty Effort Cost Share Calculator|
|Cost Share Reporting Procedures||Grant and Contract Accounting (GCA) Cost Share|
|Third Party Cost||Third Party Cost Share|
|Faculty Effort Reporting and Cost Share||Management Accounting and Analysis Faculty Cost Share webpage|
Questions concerning the applicability of cost sharing requirements to a proposal should be directed to Office of Sponsored Programs, at extension 3-4043.
Questions concerning post-award administration of cost share commitments should be directed to GCA at email@example.com or extension 6-9995.
Faculty Effort Certification (FEC) questions should be directed to Management Accounting and Analysis at 5-7395.
- Office of Sponsored Programs (OSP)
- Grant & Contract Accounting (GCA)
- Management Accounting and Analysis (MAA)
This policy is reviewed by the Office of Sponsored Programs and Grant and Contract Accounting as necessary to reflect changes in Federal regulation or University policies.