Cost Sharing (Matching Funds)
Cost sharing means that part of the costs of a sponsored project are charged to a source other than the sponsor (e.g. the University). A common cost-share item is the cost of time that faculty members commit to a project that is paid for by the University. Sometimes a program requires cost sharing for large equipment awards i.e. the University must pay a portion of the equipment cost. This is known as required cost sharing.
Occasionally, it is clear that cost sharing is desirable even if not required. Such contributions are known as voluntary cost-sharing, and usually take the form of time for people; e.g., faculty and staff release time. Voluntary cost sharing should be minimized whenever possible. If cost sharing is included and the proposal is funded, the promised cost share must be documented as having been provided, whether or not that requirement is specified in the award document.
Some costs, such as supplies, do not lend themselves readily to documentation and audit, so using these items as cost share should be avoided if possible. If a project does not recover Facilities and Administrator’s (F&A) costs at the appropriate negotiated rate, the un-recovered F&A costs can be shown as part of the cost-sharing budget. Un-recovered F&A costs are computed by taking the difference between the F&A costs that the project should have recovered (calculated at the appropriate negotiated rate), and the actual amount of F&A dollars recovered.
Equipment Cost Sharing: some sponsors require and others view positively an institution’s willingness to share in the cost of large equipment purchases. As part of its effort to enhance the research infrastructure at the university, Missouri State University will contribute up to 50% of equipment costs. This must be approved by the Dean of the Graduate College.
Many sponsored agreements require that the university and/or a third party contribute a portion of the costs of the project being performed. Documentation and accounting for cost sharing is as important as documentation of costs charged to the sponsor. The applicant will be expected to state a specific amount of matching funds which includes cash or in-kind contributions, (e.g., personnel, facilities, equipment, etc.)
Cost sharing requirements may be met as follows:
- Release Time—this is accomplished by “releasing” faculty or other department personnel being paid by the University from University funds to work a portion of their time on the project, without charge to the sponsor.
- Third Party Cost Sharing—this is accomplished via a subcontract to either a vendor or a sub-recipient of the award whereby the subcontractor agrees to contribute additional support to the effort. Missouri State University will post the cost sharing to the project financial statement, after it is reported by the subcontractor.
Cost Sharing Reporting Requirements
To report cost-sharing expenditures, Principal Investigators (PI) work with Missouri State University grants accountants who report the expenditures to the sponsor as part of the regular fiscal reporting. If cost sharing is to be provided by a third-party agency (other than through a subcontract), documentation equivalent to that cited earlier is required from that agency. The PI is required to obtain the following documentation:
Salary Costs—Grant project personnel such as faculty members, graduate assistants, undergraduate students, postdoctoral associates, technicians, and other support personnel, and interviewers and evaluators. For each person involved in the project, list name (if known), position and percentage of time on the project. Include annual salary increases, effective each July 1. When projects are charged for personnel salaries, the associated fringe benefits are also charged.
- Principal Investigator (PI): The person with overall responsibility for the technical and fiscal management of the project.
- Co-Principal Investigators (Co-PI) and Collaborators: These are other faculty members or other significant individuals who bring specific expertise to the project.
Other Personnel - Persons who are hired specifically to work on sponsored projects (e.g., graduate assistants) have direct appointments to the project, and their salaries are paid directly from project funds. If project funding ends, the appointments end. Some points to consider when budgeting fro Graduate Assistants include:
- Use the stipend set by the University and include appropriate increases.
- Graduate Assistants' (GA) generally have 100 percent appointments (equal to 20 hours per week).
- Determine whether tuition and fees should be a sponsor cost (if allowable) or will be cost shared by University. If a sponsor cost, budget at the appropriate rate.
- Tuition and fees for GAs' is charged at a pooled rate.
- Postdoctoral Researchers - The University has no pay scale for postdoctoral researchers. If you have a person yet to be appointed, use a salary that is reasonable for the field, in consultation with your department chair.
- Administrative support, technicians, computer programmers, evaluators, and undergraduate assistants— Identify title, name if known, percent effort, and responsibilities.
- Project Participant Costs - This category may include traditional or nontraditional students in training programs, workshops, or program activities. Participants are not normally University employees. There is often a separate budget category for Participant Costs.
- Human Subjects - Volunteer subjects in studies, such as those involved in research projects, are sometimes paid a modest amount to help defray the expenses of their participation. Funds to cover this cost are generally included as Other Direct Costs category.
- Personnel or Participant Costs categories - If human subjects are also university employees, their human subject payments are made through the payroll system and the project will be charged for fringe benefits as well as subject payments.