Cost sharing or matching means that portion of project or program costs are not borne by the funding agency and must be borne by someone else. It includes all contributions, including cash and in-kind, that a recipient makes to an award. If the award is federal, only acceptable nonfederal 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 total committed effort. Effort is defined as the portion of time spent on a particular activity expressed as a percentage of the individual's total activity for the institution. Cost sharing is auditable and must be allowable under cost principles and verifiable to records.
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 sponsor as a condition of obtaining an award. It must be included or a proposal will not receive the sponsor's consideration.
Voluntary committed cost sharing represents resources offered by the university (documented and quantified in the proposal) when it is not a specific sponsor requirement. It becomes a binding commitment that the university must provide as part of the performance of the sponsored agreement.
Requirements for Cost Sharing Allowability
- 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;
- 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; and
- Expended during the performance period
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