Sponsored Program 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 those two).
The U.G. however acknowledges that it is sometimes difficult to specify how certain kinds of effort in an academic setting should be treated. The U.G. 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 is appropriate."
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 EFFORT.
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.
2. 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 FAO (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 FAO 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 FAO. 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.
4. If the total amount of a proposed budget is reduced by the sponsor when the award is received, is the difference cost sharing?
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 FAO 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.
6. 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.
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