Effective June 17, 2020
This GIM describes the University of Washington’s (UW) policy for Cost Share on Sponsored Awards.
Cost Share occurs when a quantified portion of the costs of an Award are not paid by the sponsor, but paid instead using resources within a department, school/college, or other party outside of the UW. Cost Share is a commitment, either required by the sponsor or proposed (volunteered) by the PI, to use resources other than the Award itself for completion of the Award objectives.
Cost Share is Mandatory when required by the sponsor, or Voluntary when the PI voluntarily proposes and therefore commits to providing quantified resources to complete the Award objectives.
Cost Share from departmental or UW resources may result in the redirect of funds from instruction or other public activities to sponsored Awards. Cost Share also creates additional administrative burden and increases risk of non-compliance.
UW Principal Investigators (PIs), Departments, Divisions, Schools and Colleges, Grant & Contract Accounting (GCA), Post Award Fiscal Compliance (PAFC), Management Accounting & Analysis (MAA), and Office of Sponsored Programs (OSP).
Cost Share is discouraged due to the potential redirection of UW resources from other UW 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 UW will meet Mandatory Cost Share requirements when delineated in a specific program announcement. Such Cost Share is limited to the extent and in the manner so required.
Voluntary Cost Share should only be proposed when:
- The sponsor uses Cost Share as a factor in the merit review or evaluation of the proposal but only to the extent it is both in accordance with sponsor regulations and the criteria for considering voluntary Cost Share during merit review is made explicit in the notice of funding opportunity; or
- The sponsor permits Cost Share and it is deemed necessary due to the competitive nature of the awarding process (i.e., will be or was considered in the proposal evaluation process).
The rationale for providing voluntary Cost Share should be documented in the eGC1.
When Cost Share is submitted in a proposal and accepted by the sponsor it becomes a binding commitment. The PI is required to provide, monitor, and report on the Cost Share Contributions during the Award implementation.
No form of Cost Share can be proposed or provided when prohibited by sponsor policies, nor can Cost Share be proposed or provided in violation of applicable law, including the Washington State Public Ethics Law, RCW 42.52.
All Cost Share, be it Mandatory or Voluntary, is subject to all requirements as listed in this GIM.
All Cost Share Contributions must be allowable, reasonable and necessary costs to support the award and cannot be costs the sponsor has specifically disallowed. Cost Share Contributions from a Sponsored Award require the approval of the contributing Award’s sponsor. For Federal Awards, the Federal statute authorizing a program must specifically provide that Federal Award funds can be used as a Cost Share Contribution.
The PI is responsible for ensuring the processes to obtain, track, document, verify and approve the Cost Share throughout the life of the Award. The Cost Share Commitment must be met in order to close out the Award. Unmet Cost Share at the end of the Award may lead to a reduction in the total awarded amount made by the sponsor or may result in the PI providing the contribution from other sources.
Central procedures for managing Cost Share are established by the Controller’s Office.
Costs Permissible as Cost Share and Limitations
Faculty Effort Cost Share
UW Cost Share is commonly provided through a portion of the salary, related employee benefits and associated F&A of faculty members expending effort on the award. Faculty effort could be quantified in a budget, budget justification, and/or any other documentation submitted as part of the proposal as Cost Share.
Faculty effort Cost Share must be reviewed by the PI to ensure the Cost Share contribution does not exceed 100% of the faculty’s effort distribution.
Non-Faculty Effort Cost Sharing
This type of Cost Share may include effort from non-faculty UW employees, supplies, services, or other resources acquired, during the Award period, from non-sponsored funds. All such Cost Share contributions must be documented and reported to GCA.
Third-Party Cost Share
Third (3rd) Party Cost Share is provided by an individual or organization other than UW or the sponsor. The provision of Cost Share is not tied to any formal agreement or financial instrument (such as a sub-award or purchase order) and cannot be subject to or made as a requirement of any other agreement with the UW.
3rd Party Commitments are typically in the form of donated effort, resources (equipment or materials), or in-kind (volunteer effort).
3rd Party Cost Share Contributions are external to the UW; they are not recorded in the UW financial system and do not incur any F&A. Because this is not a UW resource, 3rd Party Cost Share is not included in the UW’s F&A Rate calculation.
The value of the 3rd Party Cost Share must be represented to the UW by the 3rd Party based on the 3rd Party’s valuation of the contribution.
3rd Party contributors must agree to the Cost Share contribution through issuance of a letter of commitment. As the Cost Share is met, the 3rd Party must submit a report of the resources provided toward meeting the commitment. The PI is responsible for fulfilling the total Cost Share commitments should 3rd Party contributors not meet their commitment.
Subaward Cost Share
Subaward Cost Share is a Cost Share Commitment by a subaward recipient that is either required by the UW or proposed by the subaward recipient. The Cost Share Commitment should be clearly specified in the subaward agreement issued by the UW.
Costs Included in the F&A Rate
Costs included in the F&A rate are unallowable as direct costs and therefore cannot be used as a Cost Share Contribution. 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 Share.
Cost Share F&A Rate
The F&A Rate applied to Cost Share commitments is the Standard F&A Rate on the Cost Share Award unless the Sponsor specifies, in writing, a different Cost Share F&A Rate.
Unrecovered F&A (also known as Unrecovered Indirect Costs, or UIDC) is the difference between the Standard and Actual F&A amounts when the Standard F&A Rate is greater than the Actual F&A Rate. UIDC may only be used as a Cost Share Contribution when approved by the Award’s Sponsor.
Cost Share Process
When Cost Share is committed, the eGC1 Cost Share section must be completed prior to routing. Changes, including additions, to the Cost Share section after the eGC1 arrives in OSP requires concurrence by 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 (award) is issued, the PI is responsible to manage the Cost Share 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, OSP will request a completed Cost Share Addendum. Department and UW procedures should be followed to obtain required approvals, which includes assurance of compliance with GIM2. OSP will ensure that a Cost Share Addendum is included with the Award materials sent to GCA.
Faculty effort, both directly charged to an award and Cost Share, 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, letters from 3rd party contributors, or Subaward invoices.
Reductions to Cost Share Commitment
Reduction to Cost Share commitments, both Mandatory and Voluntary, must be approved in advance by the sponsor. Any request must include a revised Cost Share Addendum, and can only be submitted to the sponsor with the prior concurrence of OSP.
Cost Share requirements may apply to award extension periods. 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 revised Cost Share Addendum 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.
Sponsor Salary Cap
Personnel compensation in excess of Sponsor Salary Caps (e.g. DHHS Salary Cap) is not Cost Share as it is an unallowable expense on the Award.
Roles and Responsibilities
Principal Investigator (PI)
- Assure that proposed or actual Cost Share is necessary and required or permitted by the sponsor in the manner described.
- Obtain necessary requisite approvals and 3rd Party commitment letters prior to committing Cost Share in proposals.
- Ensure 3rd Party contributors understand allowability and documentation requirements.
- Review to ensure that any faculty effort Cost Share does not exceed 100% effort.
- Complete revisions to Cost Share in accordance with UW policy and procedures.
- Ensure faculty effort Cost Share is reported according to UW policies and procedures.
- Report non-faculty Cost Share to GCA according to UW policies and procedures.
- Ensure Cost Share commitments have been met by the end of the Award.
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.
- Approve appropriate requests for reducing Cost Share commitments
Office of Sponsored Programs (OSP)
- Review proposed Cost Share for allowability and consistency with sponsor policy on Cost Share.
- Ensure 3rd Party commitments are made by an authorized individual of that entity.
- Complete appropriate and approved Cost Share modifications with sponsors.
Grant and Contract Accounting (GCA)
- Record the Cost Share commitment into UW Systems from the Cost Share Addendum.
- Review and enter non-Faculty Effort Cost Share commitments reported by the PI.
- Review Cost Share with the PI and staff to ensure the Cost Share commitment has been met prior to Award closeout.
- Resolve post Award Cost Share discrepancies with the PI.
- Report Cost Share Contributions to the sponsor.
Management Accounting and Analysis (MAA)
- Manage the faculty Cost Share as part of the Faculty Effort Certification (eFEC) system.
|Form to document and valuate anticipated Cost Share contributions||Cost Share Addendum and Instructions|
|Cost Share at the UW||Grant and Contract Accounting (GCA) Cost Share|
|Faculty Effort Reporting and Cost Share||Management Accounting and Analysis Faculty Cost Share webpage|
Questions concerning the applicability of Cost Share requirements to a proposal should be directed to OSP.
Post-Award Cost Share: Post Award Fiscal Compliance at firstname.lastname@example.org
Faculty Effort Cost Share: Management Accounting and Analysis: email@example.com
- Post Award Fiscal Compliance
- Office of Sponsored Programs
This policy is reviewed by the Office of the Controller and the Office of Sponsored Programs and Post Award Fiscal Compliance as necessary to reflect changes in Federal regulation or UW policies.