Cost Sharing

Cost sharing represents that portion of the total project costs not borne by the Sponsor.  Cost sharing is typically in the form of an actual cash expenditure of funds and not “in-kind” contributions to a project.

Matching occurs when the sponsor requires the University to match grant funds in some proportion with funds from another party, either from the University or another sponsor (with both sponsors’ approval). Matching requirements may be in the form of actual cash expenditure of funds or may be an “in-kind” match, which is the value of non-cash contributions to the project. 

• Mandatory cost sharing is required by the sponsor as a condition of obtaining an award. The cost sharing commitment must be included in the proposal to be considered by the sponsor.
• Voluntary cost sharing is not required by the sponsor as a condition of obtaining an award.  It must be included in the proposal, but the sponsor does not require cost sharing as a condition of the award.  Voluntary cost sharing is discouraged by Georgia State.
  
  When an award is received in which there was a commitment by Georgia State in the proposal to share in project costs, (voluntary or mandatory cost sharing or, matching) the activity becomes a binding commitment which the University must provide as part of the performance of the sponsored agreement. This commitment must be tracked in the accounting system as cost sharing.
• Voluntary Uncommitted Cost Sharing is donated effort or other direct costs above that agreed to as part of the award.  Because it was not included in the proposal and constitutes "additional" time or materials, it is not considered a binding agreement and shall not be accounted for as cost sharing.

When a Principal Investigator (PI) proposes, and the University agrees to cost share University resources, the University is required to provide the stated resources in the performance of the awarded project. Considering the administrative requirements and responsibilities inherent in the cost sharing commitment, the PI (and other person responsible for the identified funds) should carefully weigh the cost effectiveness versus the expected benefits of each potential cost sharing commitment. Cost sharing of direct expenditures represents a redirection of resources from teaching or other activities to support sponsored agreements.   This commitment must be indicated on the Proposal Routing Form. By signing the Proposal Routing Form, the department chair, Dean or designee approves the cost sharing commitment. A PI should NEVER commit to cost sharing until approved by the appropriate university authorities. 

Implicit in the University’s commitment to cost share is the PI's agreement to ensure that:

• voluntary cost sharing is permitted by the particular sponsor and project for which it is being proposed; 
• funds are available for cost-shared direct costs; 
• once awarded, cost-shared expenses will be appropriately charged, tracked and accounted for in compliance with University and sponsor requirements;
• PI will certify these expenditures in the same manner as all sponsored project spending. 

Note: The tracking, reporting, and certifying of cost sharing are subject to audit.

Cost sharing dollars can be used only once and cannot come from federal funds, except as authorized, but must come from costs that are allowable direct and/or indirect cost resources. 

A. Direct Costs 

1. FACULTY, STUDENT, OR STAFF EFFORT

It may be appropriate to contribute faculty, student, or staff effort to the performance of a sponsored agreement. The commitment to provide such support binds the University to contribute the effort and record the associated expenditures including fringe benefits in a separate cost sharing account. Any effort cost shared must be documented within the Personnel Effort Reporting system. On the Personnel Effort Report forms, individuals must certify the level of cost shared effort contributed to the associated project(s). 

2. EQUIPMENT

Equipment cannot be offered as cost sharing unless the receipt of the award is contingent upon such cost-sharing. Principal Investigators (PIs) should take care in preparing proposals for sponsored agreements not to commit the use of Georgia State-owned or government-owned equipment as cost sharing, but rather to characterize the equipment as "available for the performance of the sponsored agreement at no direct cost to the project."

Proposals which include the acquisition of special-purpose equipment as a direct cost may include an offer of University funds to pay for all or part of the cost of such equipment. These proposals may be for equipment or instrumentation grants, where the purpose of the grant is to buy equipment and we are required to share the cost with the sponsor, or research-oriented grants or contracts where the purchase of equipment required for the research is an allowable expense included in the proposal and award. Purchase and acquisition must occur during the period of performance. The portion of the purchase price paid by the University must be charged directly to a cost sharing account in support of the award. 

3. OTHER DIRECT COSTS

Allowable direct costs other than salaries, fringe benefits, or equipment may be committed by the PI as cost sharing on the proposal budget. The following are examples of other direct costs that may be cost shared: 

• travel expenses 

• items that do not meet the capitalization threshold 

• laboratory supplies 

• University contribution to graduate student tuition

B. Facilities and Administrative Costs (Indirect Costs)

Facilities and Administrative (F&A) costs are real costs of conducting instruction and research. These F&A costs do not disappear simply because a sponsor refuses to pay for them; the University must fund any F&A costs that have not been reimbursed. When direct costs are cost shared, the F&A costs associated with the direct costs are automatically cost shared. Principal Investigators may take advantage of the automatic cost sharing of these costs, and include them on the proposal budget under cost sharing. Unrecovered F&A costs may be included as part of the cost sharing or matching ONLY with the prior approval of the awarding agency. 

The following expenses cannot be offered as cost sharing commitments in sponsored project proposals:

• unallowable costs as defined in A-21, section J 
• costs designated as unallowable for a particular sponsored project 
• salary dollars above a regulatory cap, e.g., NIH 
• University facilities such as laboratory space (Principal Investigators should take care in preparing proposals for sponsored agreements not to commit use of facilities as cost sharing, but rather to characterize the facilities as "available for the performance of the sponsored agreement at no direct cost to the project") 
• University utilities
• depreciation on government-funded equipment 
• overdrafts may not be considered cost sharing for purposes of fulfilling a cost sharing commitment because overdrafts are considered unallowable under A-21

An in-kind or matching contribution made by a party other than Georgia State University requires documentation from the third party supporting the use of the funds as in-kind/matching and may require a certification of fair market value. Additionally, if required by the sponsor, the third party may need to continue providing documentation of the in-kind or matching support for tracking and reporting purposes. When cost sharing is met by in-kind contributions, the university will also claim as cost sharing the fringe benefits and facilities and administrative costs (indirect costs) that it would have earned had that time and effort been charged as a direct cost to the grant.

Identifying and providing resources for cost sharing of direct costs (including equipment) is always the responsibility of the Principal Investigator (PI). The PI may NOT utilize funds from another federal award as the source of cost sharing, except as authorized by statute. The PI may utilize funds from non-federal awards as the source of cost sharing ONLY when specifically allowed by both parties. Funds for cost-shared expenditures are typically identified from among gift, endowment income, operating budget, or other department designated funds.

The actual effort and other costs required to accomplish the goals of a sponsored project might differ from what was proposed and awarded. The total costs could decrease due to changes in programmatic needs. When there is cost sharing on such projects, the sponsor may need to be consulted to determine if the reduction can be applied to either the University's committed cost sharing or to both sponsor and University resource contributions on a pro rata basis. Otherwise, the sponsor's share is reduced and the University’s entire cost sharing commitment must be met. The Principal Investigator (PI) or the PI's departmental or research administrator must consult with the Office of Sponsored Programs before the sponsor is contacted.

Principal Investigators and other people responsible for the cost sharing commitment must account for, track, and certify cost sharing expenditures. This includes but is not limited to the following: work with the Office of Budget and Planning to establish the cost share/companion account for the awarded sponsored project (if need be contact Research Financial Services to get the project speedtype in order to assist Budget and Planning in the setup of the cost share account) and notify the Offices of Sponsored Programs and Research Financial Services of the speedtype once the cost share account has been created; processing of personnel (ePAFs) or non-personnel charges directly to the cost share/companion account associated with the sponsored project; monthly expenditure reviews; and certify cost shared effort via the university’s effort reporting system (MAXIMUS). 

The Office of Research Financial Services is responsible for providing cost sharing reports to sponsoring agencies, when required and per the terms and conditions of the award, that demonstrate the University has fulfilled the cost sharing commitments that it made as a condition of receiving external sponsorship. In order to do so, departments must provide the necessary information at the time of the award, and follow the proper accounting and certifying procedures.