Cost Sharing
Cost Sharing is a term that denotes any situation where the granting agency does not fully reimburse the grantee for all allowable costs associated with a specific project. In order to qualify as cost sharing, a cost must meet the following criteria:
- Cost Sharing and matching funds must be verifiable in the University’s records.
- In-kind, third party contributions offered as cost sharing require a commitment letter on company letterhead signed by an individual who is in a position to commit the in-kind contribution. After the fact reporting to the University will be necessary.
- Commitments must not be included as contributions for any other project or program.
- Commitments must be necessary and reasonable for proper and efficient accomplishments of project or program objectives.
- Commitments are allowable under the principle OMB Circular A-21 (i.e., it must qualify as a direct cost).
- Cost sharing commitments may not be from funds provided by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
- Costs are described in the approved budget and/or terms of the sponsored agreement when required by the awarding agency.
- Commitments are allowable and allocable under the applicable cost principles.
Three Categories of Cost Sharing
- Mandatory – is either required by statute or the agency states that mandatory cost sharing is a requirement of the applicant.
- Voluntary Committed – is created if a proposal included cost sharing when none was required by the agency. Note: Treat Mandatory and Voluntary Committed Cost Sharing the same. Voluntary Committed Cost Sharing must be met and tracked the same as Mandatory Cost Sharing.
- Voluntary Uncommitted – is cost sharing that is neither mandatory nor voluntary committed. It represents contributions to a sponsored project that do not come from the awarding agency, were not required by the awarding agency, and were not volunteered in the proposal to the agency. Note: Voluntary Uncommitted Cost Sharing is not reported back to the sponsoring agency.
Two Forms of Cost Sharing
- In Kind – this form of cost sharing involves the assignment of professional time, equipment use or space to a project that is already funded by UF. For example, a faculty member can project that they will participate in a project for 10% of their research effort during the 9 mo academic year. If their salary is $60,000 for 9 mo they can claim 10% of this total - $6000 - toward ‘in kind’ cost sharing.
- Monetary Funds - this form of cost sharing represents real dollars contributed by a budgetary unit on campus, a department, college, or university level administrative unit (e.g., VP Research office, Provost office). If this form of cost sharing is claimed, documentation in the form of a letter or signed cost sharing form is needed.
