GAP 200.140, Cost Sharing on Sponsored Projects

I.    Purpose

II.   Definitions

III.  Proposal and Internal Approval Process

IV.  Procedure

V.   Roles and Responsibilities

VI.  Federal Regulations

 

 

I. Purpose

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 (F&A) Cost Rate. Therefore, per the Research Policy Manual, 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. 

 

II. Definitions

Cost Sharing
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). Cost sharing may occur as one of three types (mandatory committed, voluntary uncommitted, voluntary committed) and appear via one of four mechanisms (payroll, non-payroll, third-party and subrecipients); appropriately identifying and documenting instances of cost share requires consideration of both type and mechanism. Compliance with Cost Accounting Standards 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 the following criteria:

1. Are verifiable from Duke's, as the grant-recipient, records;
2. Are not included as contributions for any other external award;
3. Are necessary and reasonable for accomplishment of project or program objectives;
4. Are allowable, per sponsor terms and conditions; and,
5. Are provided for in the approved budget, when required by the sponsor.

Mandatory Committed Cost Share
Mandatory Committed Cost Share is required by the sponsor as a condition of obtaining an award, which means the cost sharing commitment must be included in the proposal in order for it to be considered by the sponsor. Mandatory cost sharing may also take the form of matching, which is when a sponsor requires the University to match grant funds in some proportion with funds from another party, either from the University or more typically another sponsor (with both sponsors’ approval).

Voluntary Committed Cost Sharing (VCCS)
Voluntary cost sharing is cost sharing that 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 if the proposal is awarded.

Voluntary Uncommitted Cost Sharing (VUCS)
Voluntary Uncommitted Cost Sharing is 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.

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 that may not be considered as cost sharing commitments:

• Unallowable costs
• The use, and any related expenses of using, University facilities, such as laboratory space.
• Equipment depreciation.
• PI compensation over a sponsor salary cap, such as the Department of Health and Human Services (HHS) salary cap.

 

III. Proposal and Internal Approval Process

The University or a third-party may provide financial or non-financial support in the following forms. Grant Managers (GMs) should follow the appropriate internal process for approval and documentation for the form of cost share.

Cost share mechanisms:

• Payroll – Personnel effort beyond what is charged to the sponsor (this does not include salary above a mandatory salary cap).

• Non-Payroll – 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.

• Subrecipient – Financial support provided by a subrecipient and acknowledged in an invoice provided to Duke University as the pass-through entity; these costs must be included in the subaward budget and subject to the same requirements as Duke University’s own cost share (allowable; verifiable; necessary).
• Third-Party – In-kind contributions provided in support of the project by outside entities.

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 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:

• Medical and Nursing Management Center (MNMC) 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 for 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.