- GAP 200.140, Cost Sharing on Sponsored Projects
GAP 200.140, Cost Sharing on Sponsored Projects
GAP 200.140, Cost Sharing on Sponsored Projects
The purpose of this procedure is to define the concept and various forms of cost sharing and to describe institutional processes for the consistent and uniform treatment of cost sharing throughout the life of an award. The acceptance and inclusion of cost sharing on sponsored projects has a significant financial impact on the department providing the funds and on the University as a whole, including the calculation of the institution’s Facilities & Administrative Cost Rate. Therefore, per the Faculty Handbook (184.108.40.206) any cost sharing commitments must be requested and documented at the time of proposal submission.
Cost sharing is the financial and non-financial support contributed by the University or a third-party to a sponsored project in order to complete the project’s statement of work. When cost sharing is required by the sponsor as a condition of the award, it should only occur to the extent necessary to meet the project’s scope of work. Any other proposals of cost sharing must be requested by the Principal Investigator (PI) and approved by appropriate Management Center leadership at time of proposal. If proposed cost sharing is accepted by a sponsor, the University must document, meet and track these costs in a consistent manner.
Cost sharing commitments may appear in a variety of forms and documents throughout the award proposal, including budget justifications, Letters of Support and scientific sections of the proposal. Grant Managers (GMs) and PIs should be aware that sponsors consider any examples of quantifiable commitments of support to be proposed cost sharing. In addition, individual sponsors and awards may have additional cost sharing requirements or restrictions, which must be followed under the terms and conditions of the award. Therefore, GMs and PIs should review all proposal, award and related documents to ensure awareness of cost sharing commitments.
Cost sharing is the financial and non-financial support contributed by the University or third-party to sponsored projects in order to complete the project’s statement of work (as defined in the Uniform Guidance, 2CFR 200.1 and 2CFR 200.306). Compliance with Cost Accounting Standards, outlined in GAP 200.340, requires that cost-shared expenses be treated in a consistent and uniform manner in proposal preparation and in the accounting and reporting of subsequent expenses in the financial reports to both federal and non-federal sponsors.
In order for contributions to be considered a part of the university’s cost sharing commitment, they must meet all of the following criteria:
- Are verifiable from Duke's, as the grant-recipients, records;
- Are not included as contributions for any other external award;
- Are necessary and reasonable for accomplishment of project or program objectives;
- Are allowable, per sponsor terms and conditions; and,
- Are provided for in the approved budget, when required by the sponsor.
Note, if the sponsor is a Federal agency, the cost sharing must not be allocated to another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs.
Unrecovered Facilities & Administrative (F&A) costs, including F&A costs on cost sharing or matching may be included as part of cost sharing or matching only with the prior approval of the sponsor. Unrecovered F&A cost means the difference between the amount charged to the award and the amount which could have been charged to the award under the Duke’s approved negotiated indirect cost rate.
Expenses not eligible for cost sharing: The following are expense types may not be considered as cost sharing commitments:
- Unallowable costs
- The use, and any related expenses of using, University facilities, such as laboratory space.
- Depreciation on equipment.
- PI compensation over the sponsor salary cap, such as the Department of Health and Human Services (HHS) salary cap.
Types of Cost Sharing:
- Mandatory Committed Cost Sharing:
Mandatory cost sharing is required by the sponsor as a condition of obtaining an award. The cost sharing commitment must be included in the proposal in order for it to be considered by the sponsor.
- Voluntary Committed Cost Sharing (VCCS):
Voluntary cost sharing is not required by the sponsor as a condition of obtaining an award. Per 2 CFR 200.306(a), voluntary cost sharing is not expected by Federal sponsors and it cannot be used as a factor during the merit review of applications or proposals unless specified in both the Federal awarding agency regulations and in a notice of funding opportunity.
Voluntary committed cost sharing occurs whenever a quantifiable financial or effort commitment is included in any part of the proposal, not just the budget and budget justification. If quantifiable financial commitments are made in the Scope of Work, Letters of Support or elsewhere in the application and proposal documents, these commitments must be documented, met, and tracked through University systems.
- Voluntary Uncommitted Cost Sharing (VUCS):
Direct costs that are above and beyond what was committed and budgeted for on a sponsored project. An example includes unspecified faculty effort beyond what is budgeted and accounted for in the proposal. These costs should not be tracked, included in cost sharing calculations or be considered in the computing of the F&A rate or in any allocation of F&A costs.
- In-Kind Contributions:
In-Kind Contributions are the value of non-cash contributions provided in support of the project by third-parties. These contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.
Matching is where the sponsor requires the University to match grant funds in some proportion with funds from another party, either from the University or another sponsor (with both sponsors’ approval).
When mandatory cost sharing is required by the sponsor as a condition of the award, it should occur only to the extent necessary to meet the project’s scope of work. Any other proposals of quantifiable financial and/or effort commitments of cost sharing must be requested by the PI and approved by the appropriate School and/or institute/center and approved by Management Center leadership at the time of budget proposal and submission. Faculty with joint appointments or institute/center affiliations should seek approval from the unit (or units) that would bear financial responsibility for the cost sharing commitment.
Any instance of voluntary committed cost sharing must be approved by either:
- SOM/SON Management Center for proposals submitted by the School of Medicine (SOM) and School of Nursing (SON),
- Deans (or their designee) for PAMC-affiliated schools or institute/center leadership and the Office of Research & Innovation for proposals submitted by Campus units.
If approved, commitments of mandatory and voluntary committed cost sharing should appear in the proposal budget in SPS. If awarded, cost sharing included in the proposal budget will be loaded into SAP by Treasury Billing Services.
If a cost sharing commitment is identified after the project budget is loaded into SAP, the PI and departments are required to seek retroactive approval according to the procedure listed above and maintain documentation of such requests with award documents.
Throughout the life of an award, all expenses necessary to meet the scientific and programmatic aims of the project should be directly charged to the award, according to the procedures outlined in GAP 200.320, Direct Charges to Sponsored Projects. It is following this initial charge that cost sharing may be executed as appropriate given the nature of the expense. For non-salary expenses, departments should execute a JV, using the appropriate General Ledger account (808100 Cost Sharing: Capital Equipment; 808200 Cost Sharing: Other) to the cost object which will be bearing the expense. The project’s code will then be credited for the cost shared amount.
For salary expenses, if the cost share applies to fiscal periods prior to November 2019 (FP 2020-045), an iForm should be executed using the appropriate direct and cost share service type/category. Cost sharing source should be identified. If cost share applies to fiscal periods following November 2019, GMs should use the Other Payroll Cost Share Tool to manage and document cost share details for employees and/or projects with cost share other than what is required to comply with DHHS funding caps. For further information, refer to "Other Payroll Cost Share" Quick Reference Guide. Additional payroll cost share entries may be managed directly by central finance offices as needed.
At project end, the Post Award Financial Management (PAFM) ensures that cost sharing commitments have been met, according to the terms of the award.
- Identify mandatory cost sharing requirements in sponsor guidelines, and ensure PI awareness of any such requirements
- Ensure commitments of cost sharing are appropriately identified in SPS (at time of proposal) and SAP (at time of award)
- If VCCS is identified after award set-up, ensure that appropriate documentation of retroactive management center approval appears in award documents
- Appropriately allocate and document the fulfillment of cost sharing commitments throughout the life of the award
- Obtain necessary approvals for cost sharing prior to proposal submission, per the 220.127.116.11 of the Faculty Handbook
- Omit voluntary committed cost sharing from proposal documents, including scientific portions and letters of support unless approved by Management Center leadership
- Work with GM as needed throughout the life of award to identify and approve cost sharing
- Review and approve or deny cost sharing commitments
- Identify fund sources for meeting cost sharing commitments
- Review projects with cost sharing commitments for necessary approvals
- Approve or deny cost sharing commitments
- Coordinate with departments to ensure fund sources are identified for meeting cost sharing commitments
Post Award Financial Management:
- Ensure Cost Sharing procedures have been followed
- Verify that all commitments have been met
- Credit project as necessary prior to closing WBSE
This GAP reflects the provisions of the UG, which became effective December 26, 2014, and revised as of November 12, 2020, and all awards issued on or after this date must be managed in accordance with its provisions. It is important to verify the applicable regulations for an individual award, which may be found in the Award Notice issued by the funding agency.
These guidelines pertain to federally sponsored projects and should be used as guidance for all sponsors unless specifically addressed in a non-federal sponsor’s policies and/or procedures.
This GAP supersedes previous GAP versions, Duke Policies, Guidelines, etc.
Note: This guidance is administrative in nature and is not a cost reimbursement policy. Failure to comply may or may not result in adjustments of charges to the award. Noncompliance with this policy does not mean this cost is unallowable from an external perspective. Any adjustments of charges will be as required under applicable federal cost reimbursement principles. If a cost is removed from an award for any reason, whether or not related to this guidance, the cost will generally be charged to departmental funds.