USU Cost Share

What is Cost Sharing?

Cost share, or match, is the financial and non-financial support contributed by USU to sponsored projects. Cost share must be proposed, approved, administered, and accounted for in a consistent and prudent manner.

Some sponsors require institutional cost share on their grants and contracts as a matter of statute, regulation, or policy. Individual solicitations may also indicate a cost share requirement. In these cases, USU follows its long-standing practice of meeting published cost share requirements for targeted programs. It is USU's policy not to cost share on a voluntary basis.

It is important to understand that cost share included in a proposal (required or voluntarily) becomes committed cost share once an award is made and as such represents a binding obligation for USU. USU reserves the right to proportionately reduce the cost share commitment if awarded funds are less than proposed, with sponsor approval.

Cost share is generally the responsibility of the USU unit(s) proposing the work. In some instances, however, cost share may come from other sources, including third parties, other units, colleges, or the Office of Research. 

Cost Sharing Definitions

Cost Share

A portion of total project or program costs related to a sponsored agreement that is contributed by someone other than the sponsor. Cost share is further classified as either mandatory or voluntary.

• Cost share is normally in the form of a direct cost that would otherwise be charged or utilized to support the grant or contract, such as salary, equipment, supplies, other direct costs, and the associated Facilities & Administrative Costs (F&A). In certain circumstances, with the sponsor's approval, cost share may also take the form of Waived F&A when the allowed F&A rate is less than USU’s full federally negotiated F&A rate. USU will not voluntarily waive F&A just to meet sponsor cost share requirements. Matching is essentially synonymous with cost share and occurs when a sponsor agrees to fund a portion of direct costs predicated on USU making a pre-determined contribution.

In-Kind Cost Share

An in-kind contribution represents an item of cost for which support is already in place (and, therefore, no new cash outlay is required), such as faculty salary.

Cash Cost Share

A cash contribution represents a new, incremental purchase, such as for equipment, travel, or additional staff necessary to conduct the sponsored project.

Mandatory Cost Share

A contribution to a sponsored project or program required by the sponsor as a condition of obtaining the award. This requirement will be described in the application guidelines. Such contributions are binding commitments and must be accounted for in accordance with this policy. Any quantifiable cost sharing described in the proposal then becomes a condition of the resulting award and must be documented and reported to the sponsor. 

Voluntary Committed Cost Share

A contribution to a sponsored project that is not required by the sponsor as a condition of obtaining the award. Federal sponsors view any voluntary cost sharing offered at the proposal stage as “committed” cost sharing at the award stage. Any quantified cost sharing offered in a proposal that is submitted to a sponsor becomes fiscally and/or programmatically auditable and must be documented and reported to the sponsor if the proposal is funded.

Voluntary Uncommitted Cost Share

Any effort or resource contributed to the sponsored project beyond that which is committed and budgeted for in a sponsored agreement. Such voluntary uncommitted cost sharing is not reported to the sponsor and should not be quantified or described in the proposal. 

Third-Party Cost Share

A contribution to a sponsored project that is made by a party other than USU or the primary funder. This can be in-kind or cash contributions. Third party in-kind contributions may be in the form of real property, equipment, supplies, and other expendable property or goods and services directly benefiting and specifically designated for the project or program. Cost share provided by a subawardee is considered third-party cost share.

• Third-party cost share means that the outside entity is spending their own money internally towards the project objectives or providing in-kind contributions to further the scope. If the entity will send funding directly to USU to support the project objectives, they would be considered a “sponsor” of the project and an additional Kuali proposal may be needed. 

Waived F&A as Cost Share

When F&A is “waived,” USU agrees not to charge its federally negotiated F&A rate to the sponsor. The portion waived is considered “unrecovered F&A” and can be used as cost share if this is allowed by the sponsor. USU will not voluntarily waive F&A just to meet sponsor cost share requirements. PIs must work with the Dean or Vice President to obtain approval to waive F&A. Unrecovered F&A costs should be included as a part of the cost share budget except when prohibited by the sponsor.

• For example, the funding opportunity requires applicants to use a restricted 10% indirect cost rate. The sponsor requires that applicants also match the sponsor’s contribution to the project 1:1. The proposal budget may include the difference between USU’s federally negotiated F&A rate and the sponsor-restricted rate as cost share, if allowed by the sponsor. 

USU principal investigators (PIs) are advised to always read and follow the sponsor’s guidelines on cost sharing and to contact their SPO Pre-Award Contact with any questions about the sponsor’s requirements.

Basic Guidelines

The inclusion of cost share should be mandatory. PIs may think that they can be more competitive by providing voluntary cost sharing. This approach can backfire. For example, the National Science Foundation (NSF) will return any proposal that includes voluntary cost sharing without further review. PIs who feel it is important to show some sort of contribution to a proposed project should use the “good” examples provided at the end of this section to describe their commitment in qualitative rather than quantitative terms. Remember any voluntary cost share that is quantified in a proposal is auditable. Federal entities are not allowed to consider voluntary cost share as a factor during the merit review of the proposal.

1. When cost share/match is sponsor mandated or is deemed to be in USU's best interest to include in a proposal when not required, in-kind contributions should always be considered first. Cash cost share/match contributions should only be considered if in-kind mechanisms do not suffice to meet sponsor requirements. USU’s order of preference for cost share is: Waived F&A (if F&A is restricted by the sponsor AND they allow waived F&A as cost share)
2. Salary for existing employees in funded positions
3. Other direct costs

Proposed and approved cost share expenses must occur during the period of performance. Contributed effort and resources must be expended, not just obligated, within the approved project period. For example, if a hotel reservation for travel related to the project is made before the end date of the project, but the travel will occur after the project ends, the travel costs cannot be counted as cost share since the official payment will occur after the approved project end date.

Cost share must be proposed, approved, administered, and accounted for in a consistent and prudent manner. This includes understanding workload implications of the cost share commitment; determining when cost share is appropriate; and accurately recording and reporting cost share expenses.

When a PI/Business Manager/Department Head/Financial Officer/Dean approves the proposal in Kuali and cost share is indicated in the proposal, the responsible administrator is indicating their approval of the cost share commitments being made by the campus unit. The following checklist is non-exhaustive and is provided to help both PIs and administrators make decisions about cost sharing:

1. Is the cost share mandatory or is there persuasive evidence that cost sharing is necessary?
2. Is the cost share being proposed directly related and integral to this project?
3. Will it be possible to document the cost share for reporting purposes?
4. Is the type and source of cost share being proposed allowed by the sponsor?
5. Will the cost share expenses be incurred within the project period?
6. Has the contributed effort of USU project personnel been reviewed by each key person’s department head/director?
7. Have all University cash contributions been documented/approved by someone authorized to do so?
8. Have all third-party contributions been documented/approved by each organization’s authorized representative?

If the answer to any of these questions is, “No,” cost sharing should not be included in the proposal.

“Good” examples of suggested language for instances where cost share is not required or intended:

• Professor A will devote 30% effort on this project and requests 30% salary support. She will provide additional support as needed.
• Professor B will have significant involvement through the project, including consultation and scientific advice.
• Professor C is not requesting salary on this project, but intends to provide guidance, mentorship, and supervision to the graduate student working on the project.
• Professor D has access to a multitude of institutional resources, including lab space and departmental equipment.
• USU demonstrates support of this project through the availability and expertise of the Principal Investigator (PI).

Terms and phrases to avoid when cost share is not required or intended:

• Matching
• Cost sharing
• Committed
• Donate
• In-kind
• Support at no cost
• Contribute
• Commit or allocate % or &
• Volunteer
• Professor A will devote 10% effort towards this project at no cost to the sponsor.
• Professor B will devote 30% effort to the project, but only 15% salary support is requested.
• USU is highly supportive of this project and agrees to pay the PI’s salary for the entire project duration.
• $5,000 is requested to cover supplies and materials needed in Y1. USU will also cost share $5,000 in supplies and materials.
• Professor C will contribute a week of effort towards this project and additional time required to conduct the public survey.
• USU is committing considerable resources, including labor costs and program supplies, to this project.
• USU demonstrates support of this project by contributing partial salary funding for the Principal Investigator.

 Allowable Costs for Cost Share

For expenses to be eligible for cost share, costs must meet all of the following requirements:

1. Allowable and allocable under federal cost principles (OMB Uniform Guidance, 2 CFR 200.306) and the terms of the sponsored agreement;
2. Necessary and reasonable for accomplishment of project or program objectives;
3. Represent costs incurred during the project period of performance;
4. Not included as cost share for another sponsored program;
5. Be verifiable from USU's records; and
6. For labor costs, certifiable in the Time & Effort certification process.

The costs must not be any of the following (unless approved by the sponsor):

1. Included as cost share for any other sponsored project;
2. Payable by the same sponsoring agency under another award;
3. Payable by a different sponsoring agency within the same governmental jurisdiction under another award (e.g., federal funds must not be used for cost share on another federal project);
4. Administrative and clerical salaries, office supplies, memberships, subscriptions, etc. unless these costs have been fully justified and unique and unusual and approved by the Sponsor; and
5. Costs for existing space, facilities, equipment, and utilities.

The inclusion of one sponsored project as cost share to meet another sponsor’s cost share requirement is generally discouraged. As stated above, funding sources of the same type (e.g. federal or state) cannot be committed as cost share on one another without explicit sponsor approval from both parties. Non-federal sources of cost share may be applied as cost share on federal projects to meet a match requirement, as long as both projects have an aligned scope of work and contribute to the same objective. Any applicable sponsor instructions, RFP/RFA requirements, and/or award terms and conditions may supersede this guidance, so please review carefully. Please reach out to your SPO Pre-Award specialist for more details.

The following may also apply:

1. Values for recipient contributions of services and property shall be established in accordance with the University’s applicable cost principles.
2. Volunteer services furnished may be counted if the service is an integral and necessary part of an approved project; rates for volunteer services shall be consistent with those paid for similar work in the University; or rates shall be consistent with those paid for similar work in the labor market in which the university competes for the kind of services involved.
3. When an employer other than the University furnishes the services of an employee, they shall be valued at the employee’s regular rate of pay, plus the fringe benefits but exclusive of F&A.
4. The value of donated supplies shall be reasonable and shall not exceed the fair market value of the property at the time of donation.
5. The value of donated property shall be determined by the accounting policies of the University.

Characteristics of Types of Cost Sharing

Mandatory Committed		Voluntary Committed		Voluntary Uncommitted
USU (Quantified)	Third-Party (Quantified)	USU (Quantified)	Third-Party (Quantified)	USU (Non-Quantified)	Third-Party (Non-Quantified)
Required by the sponsor	Required by the sponsor	Not required by the sponsor and cannot be used as an evaluation factor	Not required by the sponsor and cannot be used as an evaluation factor	Not required by the sponsor	Not required by the sponsor
Costs are documented in the proposed budgets	Costs are documented in the proposed budgets	Costs are documented in the proposed budgets	Costs are documented in the proposed budgets	Not documented in the proposed budgets	Not documented in the proposed budgets
Qualitatively described in proposal	Qualitatively described in proposal	Qualitatively described in proposal	Qualitatively described in proposal	Not qualitatively described in proposal	Not qualitatively described in proposal
Explicitly referenced in the award documents once funded	Explicitly referenced in the award documents once funded	If the proposal is awarded, cost share is now mandatory	If the proposal is awarded, cost share is now mandatory	Not referenced in the award budget	Not referenced in the award document
Must be tracked, documented, and reported	Must be documented, may need to be reported	Must be tracked, documented, and reported	Must be documented, may need to be reported	Not formally tracked, documented, or reported	Not formally tracked, documented, or reported
Subject to audit	Subject to audit	Subject to audit	Subject to audit	Not subject to audit	Not subject to audit
Document internally with Cost Share Commitment Form	Document internally with signed Third-Party Cost Share Form	Document internally with Cost Share Commitment Form	Document internally with signed Third-Party Cost Share Form	Document internally with Cost Share Commitment Form	Document internally with signed Third-Party Cost Share Form

Documenting Cost Share

Proposal/Pre-Award Stage

If in-kind cost share is proposed on a voluntary basis, the Department Head/Director and Dean/VP must approve the cost share commitment included in the Developmental Proposal in Kuali indicating their explicit approval to contribute the department/college-funded salary or other in-kind cost items as  cost share. In addition, the cost share becomes an official part of the budget and should be documented on the proposal budget and justification pages. Additional effort mentioned in the budget justification, but not included in the budget constitutes a commitment of cost share. To avoid confusion, commitments of non-budgeted effort or other forms of cost share should not be included in the text of the proposal or in “Current and Pending Support” summaries. Sponsored Programs recommends committing a total dollar amount as opposed to percentages.  

Kuali proposals must include documentation for mandatory and voluntary cost share/match pledged by the department, college, research center, and/or central administration. All proposals must be submitted to Sponsored Programs in a timely manner consistent with the required internal submission deadlines. Completing and uploading the USU Cost Share Commitment Form in Kuali will suffice for documentation. 

Requests for cash cost share/match contributions from the Office of Research should be directed to the Vice President for Research (VPR) and her/his Financial Officer. If approved, documentation of the cost share (indicating the amount and source) must be provided to Sponsored Programs at the time of proposal review. Proposals including cost share funds provided by the VPR will be routed to the VPR’s Financial Officer for approval within Kuali.

Departmental or college indexes, faculty F&A indexes, and faculty start-up indexes (with approval from the VPR’s Financial Officer) are the primary sources of cost share.

How should this look in Kuali?

The Kuali proposal questionnaire includes the following question: Is there cost share that is either required or offered? The answer to this question should be “Yes” if mandatory or voluntary committed cost share is being included as a part of the proposal. The USU Cost Share Commitment form should be uploaded to the internal attachments tab. Third-party contributions should be documented via a memo or letter from the third-party contributing the support. The memo/letter along with the USU Third-Party Cost Share Form should be uploaded to the internal attachments tab. The Kuali proposal budget should include all USU and third-party cost share. The budget justification should also detail the cost share commitments for the proposal. The budget, budget justification, and costs share forms should all match and detail the total cost share committed for the proposal. Please reach out to your assigned SPO Pre-Award Contact or your college’s Proposal Development Specialist with any questions.

Award Acceptance, Accounting, and Management

All mandatory and voluntary committed cost share expenditures of a sponsored project must be properly recorded and reported in USU’s accounting system. Once the award is accepted, failure to comply with the cost share commitment may result in a loss of or return of project funds. Over-contributing prevents use of these funds for meeting commitments on other projects; under-contributing may result in a corresponding reduction in the award. If it is anticipated that there will be a significant under-contribution, the Principal Investigator or department administrator must immediately notify their SPO Post-Award Contact 

If changes to the amount pledged for mandatory or committed cost share are required prior to an award, or to the cost share resources identified once an award is received, a revised cost share plan should be submitted to Sponsored Programs for concurrence and then forwarded to the awarding agency for approval, if required. To facilitate the tracking and reporting of mandatory cost share expenditures by specific awards, administrators must track these expenditures through separate Banner indexes. Therefore, at the time of the award, Sponsored Programs will notify Sponsored Programs Accounting (SPA) of the mandatory or voluntary committed cost share requirements and SPA will set up the cost share index(es).

Tracking Subaward Cost Share

Documentation is also required for cost share from subcontractors. All institutions receiving subawards, subagreements, or subcontracts from USU must provide information on their cost share contributions, if any, to USU. As a prime award institution, USU is not required to obtain documentation to substantiate all the cost share stated by the subaward institution, but it must at least have a signed document from the subcontractor stating the amount of the cost share provided. In most cases, the subcontractor is required to report cost share on their invoices. The subcontractor is responsible for maintaining the documentation of such costs should auditors require it.