All about cost sharing

Cost sharing or infrastructure support?

Determine if your cost sharing requests for a project are cost sharing or infrastructure support.  For an explanation of the difference between cost share and infrastructure support see our Frequently Asked Questions.

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Is it justifiable?

Determine if requesting university resources for cost sharing is justifiable.  If the answers to the following questions are no, then cost sharing is not justifiable.  Submit the proposal without cost sharing.  If the answer to any of the questions is yes, cost sharing is justifiable.

• Is cost sharing required by statute?
• Is cost sharing required by the sponsor's published program announcement, solicitation, or bylaws?
• Does the sponsor explicity cite in its published charter or program description that cost sharing is expected and will be used as a proposal review criterion?
• Do specific budget line items exceed sponsor guidelines, such as salaries in excess of NIH salary limitations?

If the proposal exceeds the sponsor's minimum cost sharing requirements, a justification for voluntary cost sharing must be submitted to your Sponsored Projects Officer (SPO) for review.  The justification must be consistent with the RSP 506-02: Cost Transfers to Sponsored Projects.

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Select the most cost-effective type of cost sharing

Ask your SPO about the types of cost sharing appropriate for your project.  This is necessary as some types of cost sharing may not meet sponsor requirements or are exceedingly difficult to document.

Also determine a timeline (approximately one month prior to proposal deadline) for requesting cost share commitments and obtaining appropriate approvals.

The allowable types of cost sharing are:

Waived Facilities & Administrative Costs Recovery

When a sponsor limits recovery of full Facilities & Administrative costs (indirect costs), the foregone recovery may be cost sharing at no additional expense to the university.  The waived recovery can only be used as cost sharing when explicitly authorized by the sponsor.

The university will not waive F&A recovery unless it is explicitly restricted by the sponsor.  See RSP 508-02: Facilities & Administrative Costs.

NOTE: Project expenses normally considered overhead (e.g. office supplies, general purpose equipment, administration and clerical support) cannot be directly charged to the sponsor.  This restriction remains in effect even if some or all of the F&A recovery is restricted.

Program Income

Program income may be used to meet the university's cost sharing requirement only when the sponsor explicity approves the use of program income as cost sharing.  Under federal rules and regulations, program income is treated as direct project funding and is subject to OMB Circular A-21, Cost Principles for Educational Institutions and Other Non-Profit Organizations.

Contributed Effort

Contributed effort is the most common type of cost sharing.  It is committing state or locally funded effort (wages, payroll and ERE) to a sponsored project.  Contributed effort represents the percentage of the personnel time committed to a sponsored project.  Documentation of effort is the percentage of the total time worked, not hours worked.  Working more than 40 hours per week will not increase the percent in the calculation above 100 percent.  See RSP 502-03: Project-Related Effort and Documentation.

Third Party Cost Sharing

The university may use

1. time and effort,
2. goods and services, and
3. donated F&A

contributed by third parties to meet cost sharing requirements.  Caution: if the third party defaults on the commitment, then the project director will be responsible for meeting the cost sharing obligation.

Direct Project Costs

Any allowable, allocable, and reasonable direct costs may be cost sharing when funded with state or local funds.  For F&A costs, only foregone F&A recovery may be cost sharing.  Individual F&A items are included in the calculation of the rate and may not be cost sharing.

Equipment

Project period equipment depreciation may be cost sharing when:

1. the university holds title to the equipment, and
2. the equipment was acquired with non-federal funds.

The department will be required to document the equipment's funding was from non-federal funds.  Project period equipment depreciation may be determined by using the Cost Sharing Equipment Depreciation Calculator.  Cost sharing equipment is complex and should be discussed with your SPO prior to making such a commitment.

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Documentation and approvals

Document all cost sharing included in a proposal budget or budget justification by completing the Cost Sharing Requirements Form (and instructions).  The completed form records all cost share authorizations.

Attach any sponsor guidelines or policies governing cost sharing requirements, then get approval signatures.

Note that the TRIF initiative director must sign the Cost Sharing Requirements Approval Form (ORSPA 305A) if any portion of the cost sharing will be covered by a TRIF initiative budget.

Include a Cost Share Budget Sheet (ORSPA 305B) specifically identifying only the the TRIF-funded portion of the cost sharing dollar amounts by ASU fiscal year(s), overall budget, and budget categories (personnel, ERE, capital equipment, and other operating). TRIF-funded cost sharing accounts cannot be used for F&A costs. GCA will calculate allowable F&A costs for sponsor cost sharing reporting.

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