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 other UW resources may result in the redirection of funds from instruction or other activities to awards. Cost Share also creates additional administrative burden and increases risk of non-compliance.
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 when documented as required by the sponsor, such as in the program announcement or other sponsor proposal instructions. Mandatory Cost Share is limited to the extent and in the manner so required.
Voluntary Cost Share should only be proposed when the sponsor documents that Cost Share is a factor in the merit review or evaluation of the proposal. This is only to the extent that:
- it is in accordance with sponsor regulations; and
- the criteria for considering Cost Share as part of the merit review is explicitly documented.
The rationale for providing voluntary Cost Share should be documented in the eGC1.
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 Contributions must be allowable, reasonable and necessary costs to support the award and cannot be costs the sponsor has specifically disallowed.
Sponsored Award funds may not be used for Cost Share contributions without the prior written approval from both the benefiting and contributing Award Sponsors. 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 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.
All Cost Share commitments whether made by a UW unit or external party must be documented. The eGC1 Cost Share section must be completed prior to routing.
Costs Permissible as Cost Share and Limitations
Effort Related Cost Share
UW Cost Share is commonly provided through a portion of the salary, related employee benefits and associated F&A of individuals expending effort on the award. Effort could be quantified in a budget, budget justification, and/or any other documentation submitted as part of the proposal as Cost Share. See GIM 35.
Non-Effort Cost Share
This type of Cost Share may include costs from supplies, services, or other resources acquired, during the award period, from non-sponsored funds.
Third-Party Cost Share
Third Party Cost Share is provided by an individual or organization other than UW or the sponsor. The provision of third-party Cost Share is not tied to any formal agreement or financial instrument (such as a subaward or purchase order) and cannot be subject to or made as a requirement of any other agreement with the UW.
Third Party Cost Share Contributions are typically in the form of donated effort, resources (equipment or materials), or in-kind (volunteer effort).
Third 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, Third Party Cost Share is not included in the UW’s F&A Rate calculation.
The value of the Third Party Cost Share must be represented to the UW by the Third Party based on the Third Party’s valuation of the contribution.
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 of the resources provided toward meeting the commitment. The PI is responsible for fulfilling the total Cost Share commitments should Third 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. A subrecipient’s proposal that includes quantified cost share represents cost share that is expected to be contributed, tracked, and reported. 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. A cost must meet the four cost principles in order to be used as a cost share contribution, which includes consistent treatment of direct and indirect expenses.The requirements for incorporating such costs as direct costs are set out in GIM 23, and apply consistently to costs charged to the sponsor and those that are Cost Share.
F&A applied to Direct Costs that have been contributed as cost share
The F&A Rate applied to Cost Share contributions is the Standard F&A Rate on the Cost Share Award unless the Sponsor specifies, in writing, a different Cost Share F&A Rate. This may be used towards meeting a sponsor’s cost share requirements, if the sponsor’s policies allow.
Learn more about Cost Share F&A.
Unrecovered Indirect Costs
Unrecovered Indirect Costs (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. Learn more about UIDC and Cost Share.
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 commitments continue into any award extension period subject to sponsor requirements.
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)
- Adhere to UW processes to obtain, track, document, verify and approve the Cost Share throughout the life of the Award in appropriate UW systems
- Follow all UW GCA Cost Share procedures for documenting cost share
- 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 Third Party commitment letters prior to committing Cost Share in proposals
- Ensure Third Party contributors understand allowability and documentation requirements.
- Ensure all cost share commitments are met and documented in UW systems
- Assume responsibility for unmet cost share commitments
Chair and Dean Reviewers
- Confirm their units have the funds to cover cost share commitments
- Confirm other UW offices/units providing cost share are able to cover the proposed cost share
- Ensure use of funds for cost share on an award is permitted and appropriate, consistent with academic unit, school/college policies and State law
- Ensure proposed cost share is accurate and adequately documented
- Approve appropriate requests for reducing Cost Share commitment
Office of Sponsored Programs (OSP)
- Review that mandatory cost share requirements are met, or, if prohibited by sponsor, cost-share is not presented in proposal. If cost-sharing is included, it is not done so inadvertently, the UW cost-sharing unit or party has reflected its approval and the cost-sharing is consistent with federal requirements
- Ensure Third Party commitments are made by an authorized individual of that entity.
- Review & submit cost share modification requests to sponsors
- Process sponsor approved cost share modifications
Grant and Contract Accounting (GCA)
- Ensure sponsor approved commitments are recorded appropriately in the UW financial systems
- Establish procedures for managing Cost Share
- Review and enter Third Party, Subaward, Tuition Waiver, and Unrecovered Indirect Cost
- Share contributions in UW financial systems
- Resolve post award cost share discrepancies with the PI
- Take actions to resolve unmet cost share at award close out, which may include deobligation of award funding to cover the required cost share contributions
- Report Cost Share contributions to the sponsor
- Cost Share Addendum
- Cost Share at the UW – Process & Procedures
- GIM 23: Sponsored Program Costing Policy
- Four Cost Principles
- 2 CFR 200.413
Questions concerning the applicability of Cost Share requirements for a proposal should be directed to OSP.
Post-Award Cost Share: Post Award Fiscal Compliance at email@example.com
Details on changes to this GIM are available from the Office of Sponsored Programs, firstname.lastname@example.org