Policy 5:29 - Cost Share Policy | South Dakota State University

Policy Contact: Grants and Contracts Administration

Purpose
This policy exists to ensure that cost sharing on sponsored projects is proposed, documented, and reported in a manner consistent with University and sponsor requirements.
Definitions
1. Cost Sharing or Matching: The portion of project costs not paid by the sponsor. While the terms are often used interchangeably, the term “Matching” is a specific type of cost sharing used when a sponsor requires the grantee to match the sponsor funding according to a specific ratio.
2. Types of Cost Sharing:
  1. Mandatory: Cost sharing that is a required condition of the award. Mandatory cost share must be tracked and reported.
  2. Voluntary Committed: Cost sharing specifically pledged on a voluntary basis in the proposal’s budget or the award and that becomes a binding requirement of the award. Voluntary committed cost share must be tracked and reported.
  3. Voluntary Uncommitted: Cost, including University faculty (including senior researchers), effort that is over and above that which is committed and budgeted for in an award. The University does not need to track or report voluntary uncommitted cost share.
  4. Cash Contributions: Represents cash contribution provided by the University or a non-federal third party. Such contributions are identifiable through the University’s financial system and include effort and expenses not charged to a project.
  5. In-Kind Contributions: Represents the value of non-cash contributions, usually provided by a non-federal third party. Such contributions may be in the form of real property, equipment, supplies/other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.
3. Unrecovered Facilities and Administrative (F&A) Costs: The difference between the amounts charged to the award and the amount which could have been charged to the award under the University’s approved negotiated F&A cost rate.
Policy
1. Under Federal research proposals, voluntary committed cost sharing is not expected, and it cannot be used as a factor during the merit review of applications or proposals. It may, however, be considered if it is both in accordance with Federal awarding sponsor regulations and specified in a notice of funding opportunity.
2. When cost sharing is proposed by the University and accepted by the sponsor, it becomes a binding commitment to the sponsor. The University’s policy is to minimize cost sharing on sponsored projects.
  1. Cost sharing for sponsored projects is usually provided by the involved departments and/or colleges.
  2. Cost sharing on a voluntary basis requires approval by the Vice President for Research and Economic Development or the Associate Vice President for Research Assurance and Sponsored Programs, their successors or designees, and is discouraged for the following reasons:
    1. It reduces the flexibility of University researchers to conduct other research by obligating their effort to specific projects:
    2. It increases the requirements for capturing, monitoring, and documenting for audit purposes all commitments and expenditures of cost shared funds; and
    3. It decreases the University’s recovery of F&A costs by the addition of cost sharing to the research base.
3. Expenses incurred to meet cost sharing commitments will be accepted as cost share when the following criteria have been met:
  1. The expenses require the same accounting, financial, legal and regulatory burdens as costs on the University’s sponsored projects.
  2. The expenses are not used as cost share for any other award.
  3. The expenses are necessary and reasonable for accomplishment of project or program objectives.
  4. Costs that are unallowable to charge as direct costs on a sponsored project generally cannot be used to meet cost share on that project.
  5. Cost sharing on a Federal award, with few exceptions, must be from non-Federal sources.
4. Unrecovered F&A costs, including F&A costs on cost sharing expenses, may be included as part of cost sharing only with sponsor prior approval. Including F&A on cost sharing reduces the need to expend departmental funds and University resources to meet a cost sharing obligation. Thus, F&A should be included as part of any proposed cost sharing unless the sponsor specifically disallows it.
5. Waiver of allowable F&A costs is contrary to University Policy 8:4 regarding indirect cost recovery and should not be offered to meet cost share requirements.
6. For third party in-kind contributions, the fair market value of goods and services must be documented and to the extent feasible supported by the same methods used internally by the University.
7. If Volunteer services are used, then rates must be consistent with those paid for similar work by the University. If not found, then the rate must be consistent for similar work in labor market, including benefits. The use of Volunteers as cost share must be in accordance with University Policy 4:8. If a third party furnishes service of an employee, service must be valued at the employee’s regular rate of pay plus allocable fringe benefits.
8. Committed cost share will be reported, as required by the sponsor.
9. Cost share is subject to audit, and the sponsor agency can require repayment of a portion of grant funds if the committed cost share is not accounted for or documented.
Procedures
1. All applications or proposals for extramural funding shall be submitted for University approval utilizing the online routing system prior to submission to a sponsor. All University or third party proposed cost sharing shall be included during the routing process.
2. The University will track all cost share commitments, ensuring commitments are met and that cost share complies with general requirements and specific agency or award requirements.
  1. Cash contributions will be tracked in the University’s financial system using a location code, which is normally the same as the grant fund number. Cash contributions from a third party may be set up by Grants and Contracts Administration (“GCA”) for tracking the cost share expenses, once the award has been received.
  2. In‐kind contributions will be recorded by GCA and kept with the applicable grant file(s). Third party documentation may be documented through the use of in-kind contribution forms or by other acceptable means of verification.
  3. Unrecovered F&A will be calculated and recorded by GCA and kept with the applicable grant file(s).
3. If required by the sponsor, GCA will report committed cost share.
4. The steps to take if cost share is not or will not be met include:
  1. The PI must notify GCA and the Office of Research and Sponsored Programs and provide justification as to why cost share will not be met.
  2. GCA may consult a sponsor to determine if reduction can be applied to either the University’s committed cost share or to both sponsors and the University’s contribution on a pro rate basis.
Responsible Administrator
The Director of Grants and Contracts Administration, successor, or designee is responsible for annual and ad hoc review of this policy and its procedures. The University President is responsible for policy approval of this policy.

Approved by President on 09/28/2017.

Sources: ;

Form: In-Kind Contribution Form

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