“Cost sharing” is the sharing of project costs that are from sources other than the sponsor, usually through internal or third party in-kind contributions. Different types of cost sharing are as follows:
- Mandatory cost sharing – The portion of UH’s contribution to project costs required by the sponsor, or mandated by legislation or regulation.
- Voluntary committed cost sharing – Any cost sharing not required by the sponsor, but included in the proposal at time of submission. For federal awards, voluntary committed cost sharing cannot be used as a factor during merit review of proposals unless it is both in accordance with federal sponsor regulations and specified in the notice of funding opportunity (see Uniform Guidance § 200.306). When included in a proposal, voluntary committed cost sharing becomes a binding requirement of federal awards (see Uniform Guidance § 200.99). UH proposals should limit voluntary committed cost sharing to items that can be easily documented and verified, such as salaries, wages and fringe benefits.
- Committed cost sharing – Any cost sharing that has been specifically committed to a project, and that must be budgeted, accounted for, and recorded properly in UH’s financial system. This includes both mandatory and voluntary cost sharing.
- Voluntary uncommitted cost sharing – Any effort or other contributions to the project that are above and beyond commitments made in the proposal budget or narrative at the time of proposal submission. This type of cost sharing is not required to be tracked and shall not be accounted for in UH’s financial system. To minimize administrative burden, voluntary uncommitted cost sharing is strongly discouraged.
Federal funds may not be used to share costs for any federal or non-federal sponsored program or activity. Trust funds may be used for cost sharing only with the written approval of the trust fund sponsor.
In proposing any cost share commitments, the PI should be conservative and realistic in the effort to satisfy the sponsor’s requirements. Commitments must be commensurate with available resources and represent achievable goals. Cost sharing commitments should be reduced proportionately if a reduced funding amount is awarded by the sponsor.
The PI is responsible for obtaining appropriate approvals (dean/director or chancellor) for all cost share commitments. The FA is responsible to maintain and update the cost sharing subaccount in the UH financial system on a timely basis so that cost sharing information is available for ORS Accounting to report when required for interim financial reporting purposes or closeout.
See Administrative Procedure AP 12.410 and UH’s Cost Sharing FAQs for more information. Additional references and samples may be found in the Resources tab.