of Research and Project Administration
SPONSORED PROGRAMS COMPLIANCE
Cost Sharing Scenarios
There are many situations in which questions about cost sharing could be
raised. Here are some examples:
1. If someone
contributes effort which benefits a sponsored project, but the position
was not in the proposal and is paid by gift or other non-sponsored
funds, is the effort cost sharing?
According to UR's policy, effort devoted to a sponsored project by UR employees
which was not committed to the sponsor in the proposal is not accounted
for as cost sharing.
UR and its sponsors both expect that the PI will dedicate some amount of effort
to his or her projects. It is not appropriate, therefore, for a faculty member
to assume the PI's role if he or she does not expect to have the responsibility
to lead the project. Whatever level of effort is committed by the PI in the
proposal and subsequently awarded by the sponsor must be accounted for, either
as a direct charge to the project or as cost sharing (or some combination of
OMB Circular A-21, Section J.10.b(1)(c) however acknowledges that it is sometimes
difficult to specify how certain kinds of effort in an academic setting should
be treated. The Circular says:
"In the use of any methods for apportioning
salaries, it is recognized that, in an academic setting,
teaching, research, service, and administration are
often inextricably intermingled. A precise assessment
of factors that contribute to costs is not always
feasible, nor is it expected. Reliance, therefore,
is placed on estimates in which a degree of tolerance
Since it can be difficult, if not impossible, to identify ALL effort that may
benefit a research project, UR policy requires only the tracking of COMMITTED
In January 2001, the Office of Management and Budget issued a clarification
of Circular A-21 , confirming that voluntary uncommitted effort
should NOT be accounted for separately and included in the organized research
base for the calculation of indirect costs.
Must I account for cost sharing if I describe the involvement of a colleague "as
needed" and do not include that as a direct project cost?
Incidental involvement on an "as needed" basis
does NOT have to be accounted for as cost sharing.
If the involvement is minimal and cannot be estimated, you
do not need to include dollars as committed cost sharing
or track them in a cost sharing account.
3. If I commit effort and request a corresponding
percentage of my salary on a project, and then rebudget
my salary mid-year without reducing my effort, is this
considered cost sharing?
Yes, because you are providing the effort that was committed in the proposal,
and that effort must be matched either with a corresponding direct charge to
the project or to a cost sharing account. As soon as this occurs, your department
should designate a cost sharing account by completing a Proposed
Cost Sharing Commitment Form.
If, on the other hand, you wanted to reduce your level of effort on the project,
you could so inform the sponsor and could then reduce the amount of salary being
charged without having to designate a cost sharing account. If this is a federal
grant, you will need to get prior approval of any reduction of more than 25%
from the awarded level of effort. (See Establishing
4. If the total amount of a proposed budget is reduced
by the sponsor when the award is received, is the difference
No, as long as the reduced award reflects a corresponding reduction in the scope
of work. In some cases it may be prudent to prepare and submit a revised budget
and scope document.
In this context, the distinction between a grant and
a contract is relevant. A grant is used when the purpose
is to accomplish a "public purpose," including
carrying out research. This basic research may not result in a specific product,
but rather will follow a general direction. In the case of a grant, a reduction
in budget does not indicate an agreement to cost share.
In contrast to a grant, a contract is a procurement transaction between the sponsor
and the recipient. In the case of a contract, the reduction in budget and scope
must be clearly documented.
5. Do we need
to designate a cost sharing account for a faculty member who directs a student
on an NIH training grant?
No, the effort listed for each training faculty member reflects a commitment
of their overall academic responsibility related to instruction and not a percentage
of their sponsored research effort.
If a proposal states that University equipment will
be used to complete the project, do we have to account for
this as cost sharing?
You may offer the use of existing facilities and equipment in the performance
of a project, but should NOT categorize this as cost sharing. Instead,
in the proposal's "resources and environment" section, the facility
and/or equipment should be identified as available for the performance of the
project at no direct cost to the sponsor.
If, however, you are proposing to purchase a NEW piece of special-purpose equipment
as a direct project cost, you may offer all or part of that purchase amount
as cost sharing only when the award is dependent upon such cost sharing.
Cost shared equipment is identified during the fiscal year survey of cost sharing
and a request for a change of funding code associated with the equipment is
sent to Property Accounting by ORACS.
You may use a third-party in-kind contribution of equipment to meet a
cost sharing commitment. To record this properly, your department may have to
contact either the Purchasing Department or Property Accounting to verify the
estimated fair market value, which must be reduced by any educational discount
that might have been available to UR.