Cost Sharing and Matching

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Cost Sharing
Types of Cost Sharing
University of Arizona Preferred Sources of Cost Sharing
Federal Sponsors
Examples of Cost Share
Third-Party Contributions
Documentation Guidelines

Some sponsors require that the University contribute to the funding of a project. There are also instances when the University chooses to contribute support. That portion of the project cost not covered by the sponsor is called cost sharing or matching. See Procedures for Cost Share for information on managing cost share at the University.

Cost Sharing

  • Should be included in proposal submissions only when it is mandatory based on the sponsoring agency's policy or guidelines
  • Should be used only to the extent required by the program
  • May include associated Facilities & Administrative costs if allowed by the sponsor
  • Becomes a legal obligation to the University
  • Must be approved and the source of funding identified prior to the proposal being routed for signature
  • Cost sharing from a University of Arizona source is inappropriate if intellectual property developed by University employees will be assigned to a sponsor.
  • Proposal submissions are discouraged from including letters or other references to specific dollar amounts contributed as “institutional support” or similar when such amounts are not intended as cost sharing. If included, the sponsor or University may consider this support cost sharing that needs to be tracked. It is recommended that proposers describe any such support in non-monetary terms.

Types of Cost Sharing

  • Mandatory cost share is required by the sponsor and must be documented. It may be identified in the agency’s policies and guidelines, the funding announcement, or in the award terms and conditions.
  • Voluntary Committed cost share is not required by the sponsor but is included by the University of Arizona as part of the proposal. If the proposal is awarded, it becomes part of the award and is therefore committed by the University.
  • Voluntary Uncommitted cost share is provided by the University but was not required by the sponsor or committed in the proposal. Voluntary uncommitted cost sharing does not need to be tracked and documented.

University of Arizona Preferred Sources of Cost Sharing

  • Unrecovered F&A costs
  • Third-party in-kind contributions, when allowed by the sponsor
  • Purchase cost for all or a portion of new equipment purchased specifically for the project
  • Direct labor and fringe benefits, plus associated F&A costs

The Budget and Cost Share Worksheet (Excel) can be a helpful tool for calculating cost share and matching. Submit the completed worksheet to Sponsored Projects & Contracting Services along with the abstract, budget, and budget justification.

Federal Sponsors

Cost share on federal programs is governed by OMB Uniform Guidance 2 CFR 200.306, Cost Sharing or Matching. Under federal research proposals, voluntary committed cost sharing is not expected and it cannot be used as a factor during the merit review of proposals except when specifically disclosed in the program announcement.

Unless waived by the terms of the program announcement or other agency guidelines, cost share contributions must meet the following criteria:

  • Are verifiable from the recipient's records
  • Are not included as contributions for any other federal awards
  • Are necessary and reasonable for proper and efficient accomplishment of project or program objectives
  • Are allowable under the applicable cost principles
  • Are not paid by the Federal Government under another 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
  • Are provided for in the approved budget when required by the Federal awarding agency
  • Conform to other provisions of 2 CFR 200, as applicable.

Costs that are not eligible for cost sharing on federal proposals include:

  • Costs that are unallowable as a direct charge.  A cost that is unallowable as a direct charge to the grant may not instead be used as cost sharing. As an example, administrative salaries or operational expenses generally may not be charged to federal grants. Therefore, these costs may also not be used to meet cost share obligations.
  • Other federal awards. Funds from one federal award may not be used as cost sharing on another federal award. When specifically allowed by the federal sponsor, funds from non-federal awards may be used as the source of cost sharing on federal awards when specifically allowed by both the non-federal and federal sponsor.
  • Use of University of Arizona owned equipment. Cost sharing of equipment currently owned by the University of Arizona is not allowed. This is because the equipment was not purchased for use on the project and the sponsor is already paying for a portion of its used through the F&A costs.
  • University facilities such as laboratory space. The use of University facilities is recovered from sponsors through the application of the F&A cost rate. Therefore, offering Institute space or facilities as cost sharing is not permitted as these costs are F&A, not direct costs.
  • Unallowable costs  as outlined in “General Provisions for Selected Items of Cost, 2 CFR 200.420.

National Science Foundation

The National Science Foundation (NSF) prohibits voluntary cost sharing on all solicited and unsolicited NSF proposals. (NSF Policy Statement, February 24, 2009). The University of Arizona Guidelines for Submitting NSF Proposals under the Cost Share Policy provides guidance on preparing NSF proposals. However, mandatory cost sharing is required on the following programs:

  • Innovation Corps Program (I-Corps)
  • Major Research Instrumentation Program
  • Robert Noyce Scholarship Program
  • Engineering Research Centers
  • Industry/University Cooperative Research Centers
  • Experimental Program to Stimulate Competitive Research

Health and Human Services

The Department of Health and Human Services (HHS) applies a salary cap to institutional base salaries. That portion of salaries that exceed the mandated cap must be provided as cost sharing from non-federal funds. That portion of an individual's salary that exceeds the salary the cap must be provided as cost sharing from non-federal funds. Please see the HHS Salary Cap page for additional information.

Examples of Cost Share

Common budget categories where cost share is used are salaries and benefits, and applicable indirect costs. For projects awarded at less than the negotiated Facilities and Administrative cost rate, the difference between the negotiated rate and the awarded cost rate can be considered cost sharing, with the sponsoring agency’s approval. This calculation is only required if the sponsor requires mandatory cost share.

Third-Party Contributions

Third-party contributions - contributions of goods or services by third parties - in lieu of dollars may also be used as a form of matching when allowed or otherwise required by the funding agency. The Uniform Guidance and award terms must be followed.  Examples of third party cost share include:

  • subrecipient cost sharing
  • non-University of Arizona employee volunteer time
  • external contribution of supplies
  • consultant waiving of a normal fee

In all cases, documentation in the form of a statement describing the basis for determining the contribution’s value or receipt from the contributor must be obtained and kept for audit purposes. This documentation, the 3rd Party Cost Sharing Certification, must be forwarded to Sponsored Projects & Contracting Services at least yearly, and possibly more often, depending on the agency's reporting requirements.

Documentation Guidelines

Sponsored Projects Services (SPS) creates cost share subaccounts within UAccess Financials. These subaccounts are attached to grant account numbers and linked to the University source of funding that pays the cost share. Posting cost share expenses to these dedicated cost share subaccounts is the responsibility of the department or unit.

SPS will review the cost sharing expenses posted to cost share subaccounts and, when appropriate, calculate the associated indirect costs to add to the direct labor and fringe benefits amounts using the rate in effect during the fiscal year the labor was performed. Note that the rates used for proposal budgeting purposes may not be the same as the actual rates used to calculate the cost sharing amount. SPS is also responsible for calculating related indirect cost, when appropriate.

Investigators with complex research, teaching, and administrative workload need to track their commitments to ensure that the total never exceeds 100%. Because effort is expressed as a percent of total UA compensated activity, not hours worked, it is not possible to meet the cost sharing requirement expressed as a percentage of effort by working a longer workweek. The Worksheet for Analyzing Total Compensated Effort is a tool for analyzing an individual's effort.