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Research, Sponsored Program, Technology Transfer and Intellectual Property

Cost Sharing Policy

Section: Research, Sponsored Program, Technology Transfer and Intellectual Property Policies
Policy Name: Cost Sharing Policy
Policy Owner: Provost
Responsible University Office: Vice Provost for Research
Origination Date: November 3, 2009
Revisions:  July 21, 2015
Legacy Policy Number: 6-19

    This policy establishes the requirements and procedures for proposing, approving, administering, and documenting Cost Sharing on Sponsored Projects, including all contributions, such as cash and in-kind, that a recipient makes to an award at the University of Delaware (“UD” or “University”). This policy also sets forth requirements to ensure compliance with federal regulations (Office of Management and Budget (OMB) Circulars A-110 and A-21 or Uniform Guidance 2 CFR 200). This policy applies to all University departments, units, faculty, staff and students.
    1. A “Cost Sharing” or “Cost Matching” represents the portion of award costs not borne by a sponsoring agency. Any Cost Sharing committed on a proposal, if awarded, is an assumed/committed budget amount that must be identified, utilized and tracked in the award.
    2. The term “Allowable”, for purposes of this Policy, shall refer to costs that must be consistent with the terms and condition of the specific award, University and federal regulations.
    3. The term “Allocable”, for purposes of this Policy, shall refer to costs that must provide a sole benefit to the project or provide proportionately assignable benefits to the project and other work.
    4. The term “Reasonable”, for purposes of this Policy, shall refer to costs that are reasonable when the cost is necessary for the performance of the Sponsored Project, when an individual would normally purchase the item at that price given the circumstances, and when the cost is incurred consistent with established University policies.
    5. “Committed Effort” is the amount or percentage of time a University employee has agreed to work on a specific Sponsored Project. It is not necessarily the actual effort expended each month, but a projected amount to be achieved over a period of time (for example, a semester or a year). This commitment is set at the time of the award.
    6. Facilities and Administrative Costs (“F&A Costs”) are indirect costs that are incurred for common and joint objectives and therefore cannot be identified readily and specifically with a particular sponsored activity.
    7. “Effort Certification” is an employee’s documentation of his/her effort report and is an affirmation that his/her reporting of effort is accurate and complete.
    8. A Principal Investigator (“PI”) is defined as the individual designated in a grant or contract to be responsible for ensuring compliance with the academic, scientific, technical, financial and administrative aspects and for day-to-day management of the Sponsored Project (grant or contract) including programmatic reporting.
    The University engages in cost sharing when it is in the best overall interest of the University, but limited to situations in which it is mandated by the sponsor per solicitation or policy guidelines, or deemed appropriate in light of specific and compelling circumstances.
    1. Approval for Cost Share should occur at the time of proposal submission via inclusion in the award budget. Cost Share represents a commitment of resources by the University that can be made through contributions of, but not limited to labor (effort provided on a project), tuition scholarships, equipment funds, or third party (sub award or collaborator) contributions. Once Cost Sharing is specified and quantified in the proposed budget, budget justification, or budget narrative by the University, the institution is committed to the Cost Share even if Cost Share is not required by a sponsor. Cost incurred by the University to fulfill Cost Sharing commitments must coincide with the budget period of the award.
    2. The PI on a Sponsored Project is responsible for maintaining records of all project related costs for both the award and Cost Share components.
    3. The University reserves the right to proportionately reduce the Cost Share commitment if funds awarded are less than proposed.
    4. Categories of Cost Share
      1. Mandatory Cost Share
        Cost Sharing should be provided only in sponsor-mandated instances. If cost share is mandated by a sponsor, it should be limited to the minimum amount necessary to meet the sponsor’s requirement.
      2. Voluntary-Committed Cost Share
        Voluntary Cost Share is committed when the University has determined that a contribution of additional resources is necessary to ensure a competitive advantage for award. The University discourages voluntary-committed Cost Share. Under 2 CFR 200, voluntary-committed Cost Share is not expected and will not be used by sponsors when evaluating proposal technical merit unless it is in accordance with the Federal awarding agency regulations and notated in the Federal Funding Opportunity.
      3. Voluntary-Uncommitted Cost Share
        A commitment of University resources beyond the budgeted commitments is considered voluntary-uncommitted Cost Share. An example includes effort provided by a faculty member beyond that which is budgeted. In these circumstances, it is not necessary to track or account for these costs.
    5. Allowable Cost Share
      1. Cost Shares must be:
        1. Allowable and Allocable under federal cost principles as referenced in the above Scope of Policy section and as defined above;
        2. Verifiable from University records when applicable;
        3. Necessary and reasonable for proper and efficient accomplishment of project objectives;
        4. Identified in the approved award budget set up by the Research Office when applicable;
        5. In compliance with the criteria outlined in the applicable federal regulations; and
        6. Determined by the sponsor’s specific award terms and conditions.
    1. Effort Cost Share
      1. A minimum effort level of 1% for all sponsored activity awards has been established by the University in response to federal guidance which states that federally-funded research programs must have some level of committed faculty (or senior researchers) effort, paid or unpaid, from the sponsored award. If the required minimum is not met as effort, then Cost Share will be used to satisfy the minimum effort. This does not apply to major research instrumentation, awards solely for travel and infrequent other special circumstances.
      2. If salary is not charged directly to a sponsor, an appropriate amount of Cost Share effort should be provided. It is not acceptable for a PI to submit a sponsored activity proposal without some level of commitment by the PI to the proposed project. This requirement is not applicable to equipment awards, dissertation or training support, fellowship, or other limited purpose awards (e.g., travel grants, conference grants) that require little or no additional time from the PI.
      3. Effort may be committed and met at any time within a project year (summer months, academic year, or both). Committed Effort, whether mandatory or voluntary, must be met and reported during the periods in which it was accomplished. Any effort provided in excess of the level committed to a sponsor is referred to as voluntary-uncommitted cost share, and is not required to be reported as Cost-Share.
    2. Equipment Cost Share
      1. Equipment committed as Cost Share in a proposal, whether mandatory or voluntary, must be purchased, tracked, and reported during the periods in which it was utilized. Any equipment Cost Share provided in excess of the level committed to a sponsor is referred to as voluntary-uncommitted cost share, and is not required to be reported as Cost Share.
      2. University equipment Cost Share dollars are available when a sponsor requires mandatory equipment Cost Share or the project budget exceeds the available funding for equipment. Equipment specifics (e.g., cost limits and life expectancies) are consistent with UD Policy 5-01.
      3. The PI may submit requests of up to $50,000 from the Research Office with one-to-one match assistance from the PI’s college or unit. For example, $50,000 from the Research Office requires an equal $50,000 from the college or unit. These funds must be used on equipment and cannot be used for any other purpose.
      4. In the case of major center proposals that involve multiple academic units and multiple years of potential funding, the PI may submit requests of up to $50,000 for each year of funding. The requested amount must be matched one-to-one by the college or unit for each of the years that the Research Office provides funding.
      5. The University has an annual equipment cost share budget. Any overrun amounts to the equipment budget are proportionately divided among those colleges and units benefiting from the Cost Share during that fiscal year.
    3. Non-Equipment Expenses
      Non-equipment expenses, such as travel and supplies, may be Cost Shared when they are deemed necessary to meet mandatory cost share requirements or for project performance. These expenses must comply with federal regulations.
    4. Third Party Cost Share
      Third Party Cost Share contributions are those given to a specific grant or contract by an individual or group from outside both the University and the sponsoring agency. PIs are responsible for obtaining and monitoring supportive financial documentation to verify that Cost Share requirements have been met. A letter of Cost Share commitment must be provided by the third party. Third party Cost Share must be verified and documented.
    5. Waived Facilities & Administrative Rate (F&A) Cost Share
      Unrecovered F&A costs on federal projects may be included as Cost Sharing only with the prior approval of the federal awarding agency. These amounts shall be documented in the University’s financials system and shall be reflected in the closeout analysis. These amounts shall be tracked in the University’s financial accounting system as analysis type values of WFA (Waived Facilities and Administrative) and CFA (Cost-shared Facilities and Administrative).
    6. Subawards
      During the proposal process, if a potential subaward recipient proposes Cost Share, the Cost Share shall be documented in the letter of intent. When awarded, committed Cost Share shall be documented in the subaward agreement and must be tracked by the prime awardee throughout the life of the award. The prime awardee is responsible for ensuring the entire Cost Share commitment is met.
    7. Unallowable Cost Share
      The following types of Cost Sharing are not allowed:

      1. Federal to Federal – Federal appropriations or contracts and grants funded by Federal agencies, either directly or indirectly as flow-through funding, are not allowable as Cost Sharing for other Federal projects. Federal contracts and grants may generally be used as Cost Sharing on any non-Federal contract or grant unless restricted by the non-Federal sponsor.
      2. Expenditures Included in the F&A Rate – Costs that are included as part of the facilities and administrative cost rate calculation, such as space used for instruction and research, equipment depreciation, utilities, department administration, etc., cannot be cited as Cost Sharing expenditures.
      3. Double Counting – Cost Sharing can only be committed and reported as Cost Sharing once. If Cost Sharing relates to two or more projects, it shall be pro-rated among the projects so that, in total, it is only reported once.
      4. Costs Incurred Outside the Project Period – Costs that have already been incurred and are documented in the University accounting system prior to the project award start date are generally ineligible for Cost Sharing, unless allowed as pre-award costs.
      5. Lack of Technical Relationship – Costs that are not specifically related to the performance of the project cannot be used as Cost Share. Therefore, if another University sponsored project or gift is identified as a Cost Sharing contribution, the technical relationship between the two (or more) projects must be established and documented.
      6. Costs Specifically Not Allowable under Federal Regulations – These costs include alcohol, entertainment, advertising, memberships, etc. In addition, any costs associated with a Principal Investigator’s sabbatical leave are generally not allowable unless specifically approved by the sponsoring agency.
      7. Expenses prohibited by the award terms and conditions.