Cost sharing refers to that portion of the costs of a sponsored project not borne by the sponsoring agency. Cost sharing frequently involves salary related to effort on the part of Principal Investigators or their staff. Cost sharing may also include non-salary items. Third-party in-kind is another type of cost sharing that involves contributions to, or assistance with, a sponsored project in a form other than money. Examples of third-party in-kind cost sharing include equipment, materials, or services of recognized value that are offered in place of cash.
To summarize, cost sharing takes place whenever the University allocates its own resources to a sponsored project or participates in an in-kind cost sharing arrangement on a sponsored project. Further guidance is provided in the Cost Share Procedure.
Cost Sharing Reminder
All cost sharing must be documented as an expense that is relevant to and concurrent with the sponsored project.
Committed Cost Sharing is pledged in the proposal budget, budget justification, or budget narrative if a specific dollar value is noted in the award document or if an explicit dollar value can be assigned to the cost share commitment. There are two types of Committed Cost Sharing:
- Mandatory Cost Sharing is required as a condition of the award. It may be specified as either a minimum fixed percentage of the total project cost or a set dollar level that has been negotiated with the sponsor and approved by UMBC contributing units.
- Voluntary Cost Sharing is offered by the recipient when not specifically required by the
Voluntary Uncommitted Cost Sharing is incidental support that is over and above what was proposed and agreed upon for the project.
Criteria for cost sharing are listed in Uniform Guidance Subpart D. This states that all contributions, including cash and third party in-kind, are acceptable as part of the recipient’s cost sharing obligation when such contributions meet all of the following seven criteria. Therefore, it is essential that all costs utilized for cost sharing:
- Are verifiable from UMBC records
- Are not included as a contribution for any other Federally assisted project
- Are necessary and reasonable for proper and efficient accomplishment of the project’s objectives
- Are allowable under the applicable cost principles
- Are not paid by the Federal government under another award, except where authorized by Federal statute to be used for cost sharing
- Are provided for in the approved budget when required by the Federal awarding agency and
- Conform to other applicable Uniform Guidance
Cost sharing must be documented for the individual project and also for inclusion in the organized research direct cost base used to develop the facilities and administration (F&A) rate. The PI and the department are responsible for ensuring that all cost sharing obligations—including personnel, non-personnel, and third-party-in-kind—are identified and documented. OCGA will create a companion fund 1114 project to document UMBC’s cost share requirement. The PI is responsible for obtaining all third-party in-kind cost share documentation.
UMBC has a number of administrative processes in place to verify compliance with cost sharing obligations on sponsored projects. These include, but are not limited to, setting up specific fund 1114 projects to record expenditures and cost share funding, monitoring effort, including cost sharing, on effort reports, and reporting cost share expenditures to sponsors.