Research Project Cost-Sharing Policies

What is Cost Sharing?

Cost sharing, or matching, refers to a situation in which a recipient of funds for a research project pays for costs which are not covered by the project's funding agency. Cost sharing includes all cash and in-kind contributions made by the funding recipient.Cost sharing is auditable and must be allowable under cost principles and verifiable by records.

If a grant award is federal, only payments by the recipient of specific, non-federally covered costs qualify as cost sharing, and must conform to other necessary and reasonable provisions to accomplish the program objectives.

Cost sharing effort is included in the calculation of a research project's total committed effort. Effort is defined as the portion of time spent on a particular activity expressed as a percentage of an individual's total activity for an institution.

One example of cost sharing is time contributed by personnel listed on the project budget for whom no salary is requested. If a salary is requested, it is still considered cost sharing if it is less than what is needed to pay for the individual's entire percentage of effort toward the project. In this instance, the individual's portion of salary equivalent to the percentage of effort not included in the budget, plus the the fringe benefits and indirect costs associated with that effort, would be considered cost sharing.

Mandatory vs. Voluntary Committed Cost Sharing

There are two types of cost sharing that must be documented and tracked.

  • Mandatory cost sharing is required by a funding agency as a condition of obtaining an award. It must be included in a project's budget or the project proposal will receive no consideration by the agency.
  • Voluntary committed cost sharing represents research resources offered by a university (documented and quantified in the proposal) when cost sharing is not a specific sponsor requirement. This type of cost sharing is considered a binding commitment which the university must fulfill.

    If voluntary committed cost sharing is not seen as crucial or beneficial to the success of a research project, it is discouraged because it is required to track the amount of cost sharing and the tracking information is auditable.

Cost Sharing Allowability Requirements

Cost sharing is allowable under the following circumstances.

  • Verifiable from recipient's records
  • Not included as contributions for any other sponsored or federally-assisted project or program (cannot be used twice)
  • Necessary and reasonable for proper and efficient accomplishment of project or program objectives
  • Allowable under applicable cost principles (OMB Circular A-21)
  • Not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching
  • Included in the approved budget when required by the Federal awarding agency
  • Expended during the performance period

Sources of Cost Sharing

Examples of cost sharing resources include:

  • University funds
  • Unrecovered F&A costs
  • Third-party contributions
  • Other sponsored projects (non-federal)