Provides policy and procedures for the valuation and reporting of cost sharing in compliance with the Office of Management and Budget (OMB) Circular A-21, "Cost Principles for Educational Institutions," and OMB Circular A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations".
The following documents LSUHSC-NO policy on cost sharing including the procedure for monitoring cost sharing and reporting such cost sharing to sponsoring agencies. This policy is effective for awards received on or after July 1, 2002. The purpose for providing the policy is as follows:
- To provide guidance regarding the circumstances in which cost sharing is permitted by LSUHSC-NO, including what kind of services, expenditures, or assets may be cost shared.
- To provide information to the LSUHSC-NO community regarding the contractual, financial, and administrative implications that result from the commitment to cost share.
- To establish procedure, which provides LSUHSC-NO with the ability to provide information to sponsoring agencies, which demonstrates that LSUHSC-NO has fulfilled any cost sharing commitments it has made as a condition of external sponsors.
- To establish procedures for recording cost‑shared expenditures in the LSUHSC-NO accounting system in order to track, report and certify cost sharing as subject to audit under OMB Circular A‑ 133, sponsor guidelines, or terms of the sponsored agreement.
Cost sharing or matching: The portion of the total project costs of a sponsored agreement borne by LSUHSC-NO, rather than by the sponsor.
Committed cost sharing (mandatory and voluntary): Cost sharing that is specifically pledged in the proposal's budget or award. Does not include general expressions of support in the proposal narrative or current and pending support pages. Does include percentage of effort in NIH modular grant applications.
Voluntary uncommitted cost sharing: Cost sharing that is faculty effort that is over and above that which is committed and budgeted for in a sponsored agreement.
Unrecovered facilities and administrative cost: The difference between the amount awarded and the amount, which could have been awarded under the recipient's approved negotiated facilities and administrative cost rate.
Requirements for Documenting Cost Sharing
In order to meet the administrative requirements for cost sharing under OMB Circular A‑110, LSUHSC-NO must meet the following criteria:
Are verifiable from the recipient's records.
Are not included as contributions for any other federally‑assisted project or program.
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 authorized by Federal statute to be used for cost sharing or matching
Are provided for in the approved budget when required by the Federal-awarding agency.
Conform to other provisions of this Circular, as applicable.
The Cost Sharing Commitment
LSUHSC-NO faculty assume a cost-sharing commitment only when required by the sponsor or by the competitive nature of the award, and then are required to cost share only to the extent necessary to meet the specific requirements of the award. All cost-sharing commitments must be included on the Office of Research Services Application and Routing Form and must be approved by the University unit responsible for the funds. Cost sharing commitments are a condition of the award and subject to audit. Cost sharing on federal projects cannot be paid from other federal funds unless specifically authorized by the federal sponsor. Salaries and wages and related fringe benefits and indirect costs of faculty, staff, and students are the most common types of cost sharing commitments. These costs are documented through the Time and Effort Certification forms. Refer to the LSUHSC-NO Policy and Procedures for Effort Reporting. Non-salary purchases such as supplies and equipment used for cost sharing must be identified through use of an appropriate campus cost sharing account. Unrecovered indirect cost may be included as part of the cost sharing or matching in accordance with the sponsor's guidelines. Specific awarding agency approval is required in the case of federal grants and contracts. Records for cost sharing are retained for the same period as the records for related sponsored agreement.
Types of Cost Sharing
In order to provide the most flexibility and to best support the project it is highly recommended that (he cost sharing be proposed as a lump sum amount.) Types of cost sharing include:
1. FACULTY, STUDENT, OR STAFF EFFORT
It may be appropriate to contribute faculty, student, or staff effort to the performance of a sponsored agreement. The commitment to provide such support binds LSUHSC-NO to contribute the effort and record the associated cost sharing. Cost sharing effort must be documented within the Time and Effort Certification system. On the Time and Effort certification forms individuals must complete the effort report identifying the level of cost shared effort contributed to the associated project.
Cost sharing effort is included in the calculation of total committed effort. Although proposals could be in circulation at any given time which exceed 100% of a faculty, student, or staffs effort, care must be taken at the time of each award to ensure that effort is not committed more than the appointment allows for concurrent periods of time,
Note also that significant decreases, (25% or more for grants or an amount specified by the sponsor for contracts) in the effort by key personnel to a project require coordination with and/or advance approval by a federal sponsor; non‑federal sponsors may have similar requirements. This applies to changes in committed levels of effort to be cost shared on the project as well as to that which will, be charged directly to the project.
Equipment should not be offered as cost sharing unless the receipt of the award is contingent upon such cost sharing.
PI's should take care in preparing proposals for sponsored agreements not to commit the use of LSUHSC-NO owned equipment as cost sharing, but rather to characterize the equipment as "available for the performance of the sponsored agreement at no direct cost to the project".
Proposals that include the acquisition of special‑purpose equipment as a direct cost may include an offer of LSUHSC-NO funds to pay for all or part of the cost of such equipment. These proposals may be for equipment or instrumentation grants, where the purpose of the grant is to buy equipment and we are required to share the cost with the sponsor, or research‑oriented grants or contracts where the purchase of equipment required for the research is an allowable expense included in the proposal and award. Purchase and acquisition must occur during the period of performance. The portion of the purchase price paid by LSUHSC-NO must be charged directly to a cost sharing account in support of the award.
3. OTHER DIRECT COSTS
Allowable direct costs other than salaries, fringe benefits, or equipment may be committed by the P1 as cost sharing on the proposal budget. The following are examples of other direct costs that may be cost shared:
Items that do not meet the capitalization threshold
- Laboratory supplies
4. FACILITIES AND ADMINISTRATIVE COSTS
Facilities and Administrative (F&A) costs are real costs of conducting instruction and research. When the project does not recover the F&A costs associated with the grant program, LSUHSC-NO must fund any F&A costs that have not been reimbursed. For example, the grant program allows for a 10% F&A rate. If the proposal does not request the 10% F&A rate, LSUHSC-NO will have to fund the 10% cost from other sources. When direct costs are cost shared, the F&A costs associated with the direct costs are automatically cost shared. PIs may make use of F&A costs by including them on the proposal budget under cost sharing. Unrecovered F&A costs may be included as part of cost sharing or matching ONLY with the prior approval of the Federal-awarding agency.
Source of Funds for Cost‑Shared Expenditures
Identifying and providing resources for cost sharing of direct costs (including equipment) is always the responsibility of the PI. The PI may NOT utilize funds from federal awards as the source of cost sharing, except as authorized by statute, The PI my utilize funds from non‑federal awards as the source of cost sharing, ONLY when specifically allowed by the non‑federal sponsor. Funds for cost‑shared expenditures are typically identified from among gift, endowment income, operating budget, or other department designated funds.
Expenditures NOT Eligible for Cost Sharing
The following expenses cannot be offered as cost sharing commitments in sponsored project proposals:
Unallowable costs as defined in A‑21, section J.
Salary dollars above a regulatory cap, e.g., NIH.
University facilities such as laboratory space. PI's should take care in preparing proposals for sponsored agreements not to commit use of facilities as cost sharing, but rather to characterize the facilities as "available for the performance of the sponsored agreement at no direct cost to the project".
Depreciation on federally funded equipment.
Overdrafts may not be considered cost sharing for purposes of fulfilling a cost sharing commitment because overdrafts arc considered unallowable under Circular OMB A‑21.
Level of Cost Sharing
When sponsored projects are awarded at the level outlined in the proposal, the committed cost sharing must be provided at the requested amount. The actual effort and other costs required to accomplish the goals of a sponsored project might differ from what was proposed and awarded. The total costs could decrease due to changes in programmatic needs. When there is cost sharing on such projects, the sponsor may need to be consulted to determine if the reduction can be applied to either LSUHSC-NO committed cost sharing or to both sponsor and University resource contributions on a pro rata basis and to approve such reduction. Otherwise, the sponsor's share is reduced and the LSUHSC-NO entire cost sharing commitment must be met. The PI or the PI's departmental administrator should consult with the Office of Sponsored Projects before the sponsor is contacted.
Reporting Cost Sharing
When required, LSUHSC-NO is responsible for providing information to sponsoring agencies that demonstrates LSUHSC-NO has fulfilled the cost sharing commitment that it made as a condition of receiving external, sponsorship. The Office of Research Projects is responsible for providing cost sharing reports to sponsors when required by the sponsor. In order to do so, departments must provide the necessary information at the time of the award, and follow the accounting procedures described in the previous sections of this policy.