This Policy addresses mandatory vs. voluntary cost sharing, and distinguishes between voluntary committed cost sharing and voluntary uncommitted cost sharing. These are important distinctions, and faculty who are anticipating cost sharing in proposal budgets should review this new Policy.
When the University bears a portion of the costs of a sponsored program or project (for example, by purchasing equipment or supplies for the project from University resources, or by committing faculty or staff effort to the project at no cost to the sponsor) it is considered “cost sharing.”
Cost sharing may be either mandatory (when a sponsor requires a certain portion of the costs to be paid by University funds) or voluntary (when no such requirement exists). Voluntary cost sharing may be either committed (when a measurable resource is offered, i.e., a specific percentage of an investigator’s effort) or uncommitted (when the resource offered can not be measured and, thus, not audited). When the University receives a sponsored project award in which either mandatory or voluntary committed cost sharing is proposed, and the cost sharing becomes part of a contractual commitment to the sponsor of the project, then the cost sharing is a binding commitment that the University must provide as part of its performance of the obligations under the sponsored agreement. The University must also provide full documentation and an audit trail to demonstrate that such resources were committed to the award.
Cost sharing has programmatic, administrative, and financial consequences for the University and, as a general rule, is strongly discouraged unless specifically required by the sponsor in the program announcement. Voluntary committed cost sharing reduces the flexibility principal investigators (PIs) have to conduct other research because of possible conflicts of commitment; increase the requirements for auditable recordkeeping; and have an adverse effect on the University's recovery of facilities and administrative (F&A) (indirect) costs. The value of any voluntary committed cost sharing by the University is added to the "research base" in calculating the University's federal F&A rate, so voluntary committed cost sharing in most cases decreases the University’s F&A recovery.
Explicit commitments to cost share should not be included in proposals unless specifically required by the sponsor in the program announcement. This does not mean that PIs should not spend time on research projects for which they receive no salary from the sponsor, nor does it mean that the University should not contribute resources toward the performance of projects funded externally. Rather, PIs should describe their participation in research projects in terms that do not commit them to specific percentages of effort (salary) or to non-salary expenses.
The Vice Chancellor for Research is responsible for this Policy. The Vice Chancellor will work with the Director of Proposal Development, the Director of Research Services and Outreach, deans or their delegates, and the Office of Grants and Contracts Administration to implement this Policy. As delegates of the Vice Chancellor for Research, the Director of Proposal Development and the Director of Research Services and Outreach will provide assistance to faculty in strengthening proposals while avoiding unnecessary voluntary committed cost sharing. The Director of Proposal Development and the Director of Research Services and Outreach will also work with deans or their delegates to define acceptable levels of cost sharing in cases where funding agency guidelines are ambiguous. All cost sharing must be approved in advance by the appropriate college dean and reported to the Vice Chancellor via the proposal Internal Processing Forms.
- Initially approved June 22, 2005
- Updated November 2, 2015
Responsible Office: Business Affairs