Responsible Offices: Sponsored Projects Accounting
Effective Date: April 2023
The Sponsored Projects Accounting Department (SPA), in conjunction with the Office of Sponsored Research Services (OSRS), has revised the policies and procedures for cost sharing on sponsored projects. The information noted below was developed from the following sources: Office of Management and Budget’s (OMB) Uniform Guidance 2 CFR 200 (Uniform Guidance or UG), sponsoring agency guidelines, the University’s Sponsored Expenditure Guidelines, and the current Workday (WD) and Research Management Systems (RMS) processes. These policies and procedures should be utilized by all University personnel involved with the financial management of sponsored programs.
Cost sharing is defined in Uniform Guidance Section 2 CFR 200.29 as “the portion of project costs not paid by Federal funds (unless otherwise authorized by Federal statute).These costs can be provided in the form of cash contributions (via department or University funds), third party in-kind contributions or funding from another sponsoring agency. In order to qualify as valid cost sharing expenses, the following criteria must be satisfied:
- The costs are verifiable in the University’s financial system, for mandatory and voluntary cost sharing.
- The costs are not included as contributions from any other federally-assisted project or program.
- The costs are necessary and reasonable for the proper and efficient accomplishment of the project or program’s objectives.
- The costs are allowable under the applicable cost principles (e.g., Uniform Guidance Subpart E – Cost Principles, National Institutes of Health (NIH) Grants Policy Statements, and the National Science Foundation’s (NSF) Proposal & Award Policies & Procedures Guide.)
- The costs are not paid by the Federal Government under another award, except where authorized by Federal statute to be used as cost sharing or matching.
- The costs are provided for in the approved budget, when required by the sponsoring agency.
Based upon the provisions noted above, cost sharing can be described as the dollar amount the University or a third party provides to support a sponsored project. The University or a third party will commit resources to support a project under the following conditions:
- Mandatory Cost Sharing (M): Certain sponsoring agencies, and programs within those agencies, may require the grantee to contribute resources towards the project as a condition of the award. Typically, the agency will state in the sponsored agreement the minimum dollar amount or percentage of project costs that the University (grantee) must contribute as cost sharing. The following are examples of mandatory cost sharing:
- The sponsored agreement stipulates that the sponsoring agency will contribute $80,000 (80%) and the university will provide $20,000 (20%) towards the project. In this example, the sponsor may also refer to amount the university is contributing to “matching funds”.
- The sponsoring agency requires a Principal Investigator (PI) on the project, but it will not provide funding for the associated salary or fringe benefits in the grant.
- Voluntary Committed Cost Sharing (VC): This occurs when the Principal Investigator voluntarily pledges resources toward the project in the proposal even though the sponsor does not explicitly state in the proposal guidelines that cost sharing is required. For example:
- The PI pledges 25% effort on the project but requests only 20% of salary support in the proposal budget.
- Voluntary Uncommitted Cost Sharing (VUC): Occurs when any effort or resources contributed to the sponsored project beyond that which is proposed, committed or budgeted in the sponsored agreement – which advances the aims of the federal research award. Per the Uniform Guidance, VUC is not required to be accounted for or reported on, and further, is not subject to audit. For example:
- The PI proposes and charges 25% effort, but he/she actually devotes 35% effort, the additional 10% effort that was not originally promised is VUCS.
Subsequent to the issuance of the award, the University must cost share the amounts committed in the proposal and/or the amounts required by the sponsor. A detailed description of the roles and responsibilities of University personnel involved with costs sharing can be found in Appendix A.
Research Management System (RMS):
The Principal Investigator is required to document all cost sharing commitments in the proposal budget. The cost sharing commitments contained in the budget should also be described with additional detail in the budget narrative.
The University’s Research Management System (RMS) enables calculation of cost sharing amounts for personnel, non-personnel and F&A costs, as described in the RMS User Guide, sections Personnel: Budget Detail – Cost Sharing, FAQ: What is the basic functionality for Personnel Cost Sharing, FAQ: How do you handle over the cap personnel for an NIH flow through proposal and FAQ: How do I adjust for sponsor limits on fringe benefits?
Workday – Grant Lines:
The University monitors and maintains cost sharing expenditures by establishing separate Grant Lines (GR#######) in WD (general ledger). For each sponsored project, a specific cost sharing Grant Line will be established based upon the terms and conditions of the award. These Grant Lines will be established by Sponsored Projects Accounting (SPA) at the time of the award and/or upon submission of the appropriate Cost Share Request form. The PI and/or the academic department must provide a Cost Center, Gift, Project or non-carryforward as the funding source for the cost sharing.
- Mandatory Cost Sharing Grant Line: Cost sharing obligations mandated by the sponsor and committed to in the proposal/award will be designated with the Program worktag set to Mandatory Cost share (PG00106). The name of the Grant Line will also include “M” to further identify this type of cost sharing. The PI and/or their designee will charge all mandatory cost sharing expenditures to this Grant Line which are deemed reasonable, allocable and allowable under Federal, University and sponsoring agency guidelines.
- Voluntary Committed Cost Sharing Grant Line: Cost sharing that was voluntarily pledged by the PI for the project is considered Voluntary Cost Sharing will be designated when the Program worktag is set to Voluntary Committed Cost Share (PG00107). The name of the Grant Line will also include “VC” to further identify this type of cost sharing. The PI and/or their designee will charge all voluntary committed cost sharing expenditures to this Grant Line which are deemed reasonable, allocable and allowable under Federal, University and sponsoring agency guidelines.
- Voluntary Uncommitted Cost Sharing Grant Line: If the Department chooses to track/document Cost sharing that was contributed to the sponsored project beyond that which is proposed, committed or budgeted in the sponsored agreement, it will be designated when the Program worktag is set to Voluntary Uncommitted Cost Share (PG00108). The name of the Grant Line will also include “VUC” to further identify this type of cost sharing.
- Third Party (In-Kind) Contributions: External individuals and/or entities may contribute resources to a sponsored project awarded to the University. These costs are not accumulated in the University’s financial statements (WD), therefore, the third party is required to maintain and submit detailed documentation for the costs contributed to the project. The documentation should include items such as; name of individual/entity, date(s) of service, hours worked, rate of pay, a dollar amount and description of the items/supplies utilized.
- Third party services furnished by professional and technical personnel, consultants, and unskilled labor may be counted as costs sharing, if the service is an integral and necessary part of an approved project program. Rates for third party services shall be consistent with those paid for similar work at the University. In those instances in which the required skills are not found at the University, rates shall be consistent with those paid for similar work in the labor market in which the University competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable and allocable may be included in the valuation.
- When an employer, other than the University, furnishes the services of an employee, these services shall be valued at the employee’s regular rate of pay (plus an amount of fringe benefits that are reasonable, allowable and allocable, but exclusive of overhead costs), provided these services are in the same skill for which the employee is normally paid.
- Detailed cost sharing information should be certified by the third party or a responsible individual within the third party entity and submitted to the Principal Investigator on a timely basis.
The Principal Investigator is responsible for monitoring the goods/services that the third party contributes to the project. He/she should also review the cost sharing data submitted by the third party to ensure that the costs are reasonable, allocable and allowable under University and the sponsored agency’s guidelines. Subsequent to the PI’s review, copies of the data should be emailed to the appropriate SPA team that handles the award, along with the award number (AW#), for inclusion in the financial reports. Note: Some federal sponsors (e.g., the National Institutes of Health and the National Science Foundation) may require the faculty member to disclose in-kind support in the facilities or other support/current and pending support section of an application.
Note: In WD, there is no direct way to assign the over the salary cap portion of pay to a different Grant Line – see the following link for the manual workaround, https://workday.wustl.edu/items/grants-overview/#Grant-to-Grant-Salary-Cap-Cost-Sharing.
Facilities and Administrative (F&A) Costs:
F&A costs are not automatically calculated and posted on cost sharing grant lines.
The Sponsored Projects Accounting Department will include amounts posted to Mandatory and Voluntary cost sharing Grant Lines, plus third party cost sharing data provided by the PI, on all applicable financial reports/invoices, as required by the award and/or under Federal, University and sponsoring agency guidelines. Applicable F&A will be manually calculated by SPA and added to the financial reports/invoices as required.