The purpose of these guidelines is to provide direction in reporting mandatory, voluntary committed and voluntary uncommitted cost sharing and the various components that qualify as cost sharing.

Definition

Cost Sharing is a term that denotes any situation where the granting agency does not fully reimburse the grantee for all allowable costs associated with a specific project. In order to qualify as cost sharing, a cost must meet the following criteria:

1. Cost Sharing and matching funds must be verifiable in the University's records.
2. In-kind, third party contributions offered as cost sharing require a commitment letter on company letterhead signed by an individual who is in a position to commit the in-kind contribution. After the fact reporting to the University will be necessary.
3. Commitments must not be included as contributions for any other project or program.
4. Commitments must be necessary and reasonable for proper and efficient accomplishments of project or program objectives.
5. Commitments are allowable under the principle OMB Circular A-21 (i.e., it must qualify as a direct cost).
6. Cost sharing commitments may not be from funds supported by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
7. Costs are described in the approved budget and/or terms of the sponsored agreement when required by the awarding agency.
8. Commitments are allowable and allocable under the applicable cost principles.

Three Forms of Cost Sharing

1. Mandatory – is either required by statute or the agency states that mandatory cost sharing is a requirement of the applicant.
2. Voluntary Committed – is created if a proposal included cost sharing when none was required by the agency. Note: Treat Mandatory and Voluntary Committed Cost Sharing the same. Voluntary Committed Cost Sharing must be met and tracked the same as Mandatory Cost Sharing.
3. Voluntary Uncommitted – is cost sharing that is neither mandatory nor voluntary committed. It represents contributions to a sponsored project that do not come from the awarding agency, were not required by the awarding agency, and were not volunteered in the proposal to the agency. Note: Voluntary Uncommitted Cost Sharing is not reported back to the sponsoring agency.

Cost Sharing Timeline

1. The award is granted with a specific dollar amount or percentage of cost sharing required.
2. The Division of Sponsored Research (DSR) processes the Notice of Acceptance (NOA) and sends electronic notification of the new award to the Principal Investigator (PI) and department administrator.
3. The Principal Investigator (PI) must complete and sign a Cost Sharing Certification form for the new award and returns it to C&G.
4. Once the PI returns the Cost Sharing Certification form, the budget is released on the account. Note: The TR20 cannot be processed until the completed Cost Sharing Certification form is received by C&G.
5. The PI will notify the Activity (Effort) Reporter and the office manager in the department how the required cost sharing will be met.
6. Cost sharing reports will be sent to the department on a semester basis (Summer, Fall, Spring) from C&G.
7. By the time the grant has concluded, all cost sharing requirements must be met. C&G will confirm cost sharing prior to account close out.

Cost sharing contributions may be made in the following forms:

Activity Reporting System Entries

Salaries - The most prevalent form of cost sharing is tracked through the Faculty Activity Reporting system (non-time card employees) and the Non-Academic Activity Reporting system (time card employees). An example of cost sharing of salaries is when an employee is working on but is not paid from the grant account; the value of the time spent working on the grant can be loaned from an unrestricted paying account to the grant. (Effort cannot be loaned from a restricted account without prior approval.)

To capture this transaction on the Non-Academic Activity Reporting system, see "Add a Loan" in the Non-Academic Activity Reporting User's Guide. Pay special attention to #6 where the manual describes how to denote cost sharing.

To cost share salaries in the Faculty Activity Reporting system, see the Faculty and Professional Employee Time and Effort Reporting Instructions, or call Judy Bowen at (352) 392-2476.

Manual Entries

• All manual entries must have the following statement on the invoices/backup:
  "This is to certify a cost sharing contribution to the project under account #____;
  this cost has not been used to meet cost sharing on any other account."
• Send copies of invoices/backup to your grant administrator at C&G.

Salaries (after the Activity Reporting term closes) – If a department fails to report the cost sharing of salaries timely (before the Faculty and/or Non-Academic Activity Reporting systems have closed for the term), they must send a memorandum to C&G providing sufficient detail of the cost sharing transaction. If the transaction should have been made in the Non-Academic Activity Reporting system, a copy of the original Report of Non-Academic Activities must be included. If the transaction should have been made in the Faculty Activity Reporting system, a copy of the original Academic and Professional Final Report must be included.

Equipment Purchases – Copies of paid invoices must accompany the request and should be forwarded to the grant administrator that is in charge of the account. The invoice must indicate what portion of the equipment is to be cost shared to the grant. The decal number must be provided.

Other Expenses – Other types of materials or supplies used for the project but not paid with restricted grant funds may be used for cost sharing assuming they meet the criteria defined on page one. Copies of paid invoices and the organization code of the project to which cost sharing is to be applied must be provided to the grant administrator. The invoice must clearly state the dollar amount to be cost shared.

Equipment Use – The use of a piece of equipment can be utilized as cost sharing but is discouraged. Only the depreciation expense for the percentage of use can be cost shared, and then only for one year at a time. Equipment use may not be allowed if the piece of equipment has already been included in a Facilities and Administrative Rate Proposal. Check with your C&G office for help.

Space Rent – Rental of non-University space that is not paid from any University funds or the grant, may be used to meet cost sharing. A letter of certification from the agency allowing the rent to be used as cost sharing must accompany the Cost Sharing Certification letter.

In-Kind Contributions – Donations by outside agencies can be used as cost sharing (may be donated time, space [third party facilities], or equipment). To capture the transaction, a letter from the donor must be obtained certifying the value of the items donated at the time of the donation or after the donation was made. The letter must be signed by an individual who is in a position to make the commitment.

Cash – Cash must have a special account set up as a "matching account". Funds must be spent according to the project budget if there is a budget. If the account has no budget for matching funds, cost sharing should still be monitored and questioned if an expenditure seems out of line for the work of the project. Also, cost sharing must comply with federal guidelines if cost sharing fulfills a federal requirement. The responsible grant administrator supplies the memo stating the time period covered, the amount of the expenditures, and the unrecovered indirect cost attached to the expenditure.

Indirect Costs (on cost sharing charges) – Unless the award prohibits IDC from being charged and/or used as cost sharing, all applicable charges to a grant are entitled to the same IDC rate granted the award from the agency. This means that IDC may be calculated on allowable cost sharing charges and used to help meet cost sharing requirements.

Unrecovered Indirect Costs – If indirect cost is not funded by the grant or if it is funded for less than the negotiated rate, the unrecovered portion can be cost shared to the grant. The grant administrator is responsible for calculating this information. Agency approval must be acquired for a federal award to cost share unrecovered indirect costs.

Links

University of Florida Cost Sharing Policy
OMB Circular A-110
OMB Circular A-21
National Science Foundation (NSF) Cost Sharing Policy
National Science Foundation (NSF) Cost Sharing FAQs
U.S. Department of Health and Human Services (DHHS) Cost Sharing Policy