UAMS ADMINISTRATIVE GUIDE

NUMBER: 8.3.02
DATE:
01/01/93
REVISION:
1/08/2004

SECTION: FINANCE DEPARTMENT
AREA: RESTRICTED FUNDS ACCOUNTING
SUBJECT: COST SHARING


PURPOSE
The purpose of this policy is to notify departments within the University of Arkansas for Medical Sciences (UAMS) of the procedures to be followed when a proposed, and subsequently funded, grant includes sharing of costs.  This “cost-sharing” can be defined as “the expenditure or use of the grantee’s own resources, funds, or third-party contributions toward the total allowable costs of a sponsored project.”  The department submitting the grant proposal is responsible for identifying and providing these resources.

TYPES of COST SHARE

There are four (4) types of cost share: 

Mandatory Cost Share is cost sharing required by a sponsor as a condition of making an award.  If mandatory cost share is required, the requirement is always specified in the published description of the program.  The amount of mandatory contribution toward the project is usually defined as a percentage of the sponsored funding.  Examples of Mandatory Cost Share include salary and fringe benefits, supplies, travel, equipment, respective F&A expenditures, or third party in-kind contributions which meet the required non-sponsor supported expenditures as reflected in the award.

Salary Cap Cost Share is cost sharing which occurs when the University records effort by individuals whose salary exceeds a sponsor-imposed limit for individual salaries.  (Most notably, NIH)  Salary Cap Cost Sharing must be identified for effort reporting, but it is unallowable toward Mandatory Committed Cost Share. 

Voluntary Committed Cost Share is cost sharing the University may offer in a proposal to reflect accurately the total resources necessary to complete a project.  Although voluntary in nature, the cost share is committed, and must be monitored in the accounting records the same as mandatory cost share.  Examples of Voluntary Committed Cost Share include any non-sponsored expenditure which results in total cost sharing of expenses in excess of that required in the published description of federal programs.  .  Since voluntary committed cost share reduces the research F&A rate, consumes departmental resources, and reduces available resources for additional research, UAMS does not allow the inclusion of any voluntary committed cost share in grant proposals.  Exceptions to this statement must receive approval from the Department Chair and College Dean or their designees.

Voluntary Uncommitted Cost Share is cost sharing that is not committed or budgeted for in a sponsored agreement.  It need not be tracked or reported to the sponsor.  Most frequently this type of cost share is the result of cost overruns or effort of personnel in excess of that committed.

POLICY

Cost Sharing needs to be addressed at the time of the proposal, and again at the time that the project is awarded:

During Proposal Process:

(1)    When a grant proposal includes committed cost share, (i.e. any cost share, whether mandatory or voluntary, addressed in the proposal narrative or budget), the expenses to be shared by the department must be identified in the proposal and marked on the “blue sheet” proposal routing form.  

(2)    The cost share can be provided from unrestricted departmental funds, other non-federal restricted projects, or from third party contributions of cash or in-kind expense.

Unrestricted Departmental Funds - If the cost share is to be provided from departmental funds, the department involved in the cost sharing agreement is responsible for providing the cost center where the budgeted funds reside.

Other Restricted Non-Federal Funds - If the expenses of another restricted non-federal project are being used for cost share, the department involved in the cost sharing agreement is responsible for identifying that project to Restricted Funds Accounting (Grants Accounting) .

Third Party In-Kind Contributions - If the cost share is to be provided by a third party, that party and the type of assistance to be provided must be identified
 

 (3)  If the applicant’s cost participation includes salary and fringes of UAMS employees, the   employee,   the position, and the proposed effort contributed to the   cost  share must be identified..

       (4)  The use of “disallowed” or “unrecovered” indirect costs as cost sharing must first, be approved by the UAMS Office of Research and Sponsored Projects, and subsequently, be approved by the awarding agency.

After Project is Awarded:

(5)  The grantee institution must maintain records of all project costs which the grantee claims as cost sharing and records of all costs to be paid by the funding agency.   These records are maintained in separate accounts by Grants Accounting and are subject to audit.

(6)  If the cost share is provided from department funds, the budget allocated to cost share must be committed to the cost share account (set up by Grants Accounting ), shortly after receiving the notice of award.

(7)  If the grantee’s cost participation includes in-kind contributions, the basis for determining the valuation of volunteer services and donated property must be documented.  The department is responsible for maintaining the following documentation and forwarding to Grants Accounting, # 545, at the closeout of the project:

a)      The letter obtained from the Principal Investigator or Business Officer documenting the source of contribution to agreement.

b)      The basis for valuation of in-kind contributions, i.e., worksheets, surveys, time cards, etc.

c)  All recorded documents of in-kind expenditure by the third party.

(8)  Salary commitments to a federal project in excess of the NIH maximum salary cap will be recorded as salary cap cost share to that project, and must be funded from non-federal funds by the department.

(9)  Any salary contribution provided by UAMS employees toward cost share requirements must be certified through the UAMS time and effort certification process.

(10)  Items of costs that are generally allowable as grant funded costs will also be generally allowable as cost sharing.  Items of cost generally disallowed as grant funded costs, will also be generally disallowed as costs sharing.  OMB Circular A-21 is specific as to the allowability of costs on federal projects.

UAMS reserves the right to turn down the grant if the Chancellor determines that the cost sharing expense is too great.