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OSP - Cost Share on Sponsored Projects

Procedure Area: Vice President for Research

Responsible or Contact Office/Role:

The Office of Sponsored Programs is responsible for:

  • Establishing and communicating policies and procedures related to cost sharing.
  • Assisting unit research administrators and faculty in determining if an award requires cost sharing and documenting such commitments.
  • Reviewing proposals to ensure that the cost share funding source is identified in the EPRF.
  • Incorporating appropriate cost sharing terms and conditions into outgoing subcontracts.
  • Establishing cost share companion accounts (CS Awards) in the financial system.
  • Ensuring third party cost sharing is properly reviewed, documented and reported.
  • Conducting periodic reviews of cost sharing expenses for compliance with sponsor requirements.
  • Reviewing and submitting necessary cost sharing reports to sponsors, the Cost Analysis group, and others as requested.

The Office of Financial Planning and Analysis is responsible for:

  • Ensuring committed cost shared expenditures are included in UVa’s organized research base for F&A rate calculation.

Principal Investigators and Project Directors are responsible for:

  • Determining and verifying any cost-share requirements on proposals.
  • Ensuring that cost share contributions are documented on the EPRF.
  • Ensuring adjustments to salary/effort committed as cost share are made as appropriate.
  • Ensuring that cost share commitments are met by UVA and/or third party.
  • Attesting to cost share expenditures on the Statement of Cost Sharing Certification, when required.

Department Chair/Dean and/or Vice Presidents are responsible for:

  • Obligating University resources for cost share.
  • Ensuring that cost share resources are available.
  • Approving the EPRF.

Research Administrators and/or Fiscal Contacts are responsible for:

  • Assisting the PI/PD in determining and verifying any cost-share requirements on proposals.
  • Assisting with preparing the EPRF to include cost share commitments.
  • Ensuring that cost share commitments are adequately documented.
  • Ensuring that labor schedules are adjusted when salary/effort is committed as cost share.
  • Monitoring cost share throughout the life of the project to ensure compliance with the sponsored agreement.
  • Maintaining documentation in support of cost share contributions in accordance with OSP’s document retention procedure. 

Approval Date: Approval Date 07/16/2018 reviewed 8/11/2020

Purpose: 

This procedure describes the management of sponsored agreements that include cost sharing. UVa is required to track cost shared expenditures in the financial system and submit certified reports to sponsors. Post Award will work with department administrators to ensure cost shared expenditures are verifiable from UVa’s financial system, monitored for allowibility, allocability, reasonableness and consistency with UVa policy and sponsor requirements. 

Policy or Other Underlying Requirement UVA Policies:

Federal Requirements/Guidelines:

Prerequisites (optional):

N/A

Definitions (optional):

1. Committed Effort: Any part of ‘University effort’ that is quantified and included in a sponsored program proposal and the subsequent award (e.g., two summer months, 12% time, one half of a year, three person-months, etc.). This quantified effort is associated with a specific dollar amount based on the employee’s Institutional Base Salary (IBS). Committed effort can be paid or unpaid, in the form of one or both of the following:

  • Direct Charged Effort: Any portion of ‘committed effort’ toward a sponsored program activity for which the sponsor funds the salary and benefits.
  • Cost Shared Effort: Any portion of ‘committed effort’ toward a sponsored program activity for which allowable UVa sources fund the salary and benefits.

2. Cost Sharing: Allowable and allocable costs of a sponsored project that are not borne by the sponsor. Categories of cost sharing include:

  • Mandatory Cost Sharing: Cost sharing required by the sponsor as a condition of obtaining an award. Such requirements are generally incorporated in the funding opportunity announcements or solicitations or required by legislation and will be considered as an award eligibility by the sponsor.
  • Voluntary Committed Cost Sharing: Cost sharing specifically pledged on a voluntary basis in the proposal budget or federal award which becomes a binding requirement of the award which must be tracked, documented and reported (when required) to sponsors.
  • Voluntary Uncommitted Cost Sharing: Cost sharing over and above proposed and awarded commitments. Such cost sharing does not need to be tracked, documented or reported to sponsors.
    • For example, for a key person committed to and charged 25% of the Institutional Base Salary to the project, but actually spent 35% effort on the project, the additional 10% effort devoted to the project is considered voluntary uncommitted cost sharing.
  • Additional Notes:
    • Cost sharing represents real costs associated with University resources.
    • Cost sharing requires University redirecting funding for instructions or other activities to support research.
    • Committed (mandatory and voluntary) cost shared expenditures are included in the organized research base for F&A calculation, lowering University’s F&A (indirect cost) rate.

3. Third Party Cost Sharing occurs when cost share commitments are borne by cash or in-kind contributions of an entity external to UVa.

4. Electronic Proposal Routing Form (EPRF): The Electronic Proposal Routing Form is an internal UVa document containing critical financial and non-financial data about all proposed extramurally funded activities.

5. Facilities and Administrative Cost (F&A): Costs that are incurred for common or joint objectives benefitting more than one cost objective and therefore cannot be identified readily and specifically with a particular cost objective, sponsored program, an instructional activity, or any other institutional activity.

6. Institutional Base Salary (IBS): The annual amount that the University pays for an individual’s appointment, whether that individual’s time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual may be permitted to earn outside of the duties to the University. IBS includes both compensation for University-related effort and compensation from the University Physicians Group (UPG) for clinical effort.

7. Principal Investigators/Project Directors (PI/PD) and Other Key Personnel: Individuals whose effort is essential to the success of the proposed activity, either because of their critical leadership positions within the proposal (and consequently their intellectual guidance) or because of the uniqueness of the expertise they are contributing relative to the proposed scope of activity. ‘Key personnel’ typically include research scientists, principal scientists and senior scientists, depending on their intellectual contribution to the proposed scope of activity. Typically, replacement of any of these individuals requires approval from the sponsor. Importantly, the status of ‘Principal Investigator/Project Director’ and ‘key personnel’ does not necessarily imply salary support from the sponsor.

8. Sponsored Program Activities: Externally funded programs under which the University is obligated to perform a defined scope of work according to specific terms and conditions and within budgetary limitations. These programs are to be budgeted and accounted for separately from other activities. Sponsored program activities include grants, contracts, cooperative agreements, clinical trial agreements, Intergovernmental Personnel Agreements and other awarding instruments supporting research, instruction, public service, and clinical trials.

Flowcharts (optional):

N/A

Procedures:

GRANTS AND CONTRACTS

Notes: 

Funding sources available for cost share expenditures are typically identified from department funds, local funds, gift accounts, and endowment income (others are defined in Attachment A).  Federal funds may not be used for cost sharing commitments without advanced approval from the contributing agency.

Steps:

In preparing proposal packages, the Electronic Proposal Routing Form is completed by the responsible PI/PD with assistance from the cognizant departmental/school research administrators. When cost share commitments have been made in the proposal budget or narrative, the EPRF should reflect the types of the commitments and all of the funding sources that will be used to fulfill the commitment. The EPRF is approved by the cognizant departmental/school official.

Pre-Award will review cost sharing requirements of program solicitations and advise the PI/PD on whether or not cost sharing will be appropriate and if needed obtain clarification from the sponsoring agency.

Upon award, OSP will identify the cost sharing included in the sponsored agreement and recommend establishment of a cost share companion account and/or other methods of tracking such obligations.  The cost share companion account will be created and the non-sponsored funding source provided in the EPRF will be documented for quarterly true-up activities.

Grants and Contracts Account Create Group will assign the Cost Share Companion Account Action in ResearchUVA to the OSP Financial Compliance team for review. Occasionally, specific State appropriations, non-federal sponsors or donors of restricted gifts allow their funds to be used for matching or cost sharing for research programs. In such cases, OSP Financial Compliance will require the department to use unique cost share Project or Task, linked to the state (e.g., ETF), non-federal sponsored or restricted gift award for easy identification of the cost sharing funding source/s.  

 

POST-AWARD

Steps:

OSP Financial Compliance will review the cost sharing companion award set up for tracking and reporting on cost sharing. OSP Financial Compliance will finalize and distribute Notice of Award (NOA) for the cost share companion award to the PI and department.

Departments set up labor schedules, purchase orders and other commitments on the cost sharing companion account to track and document expenditures from the financial system. The PI/PD is responsible for ensuring that commitments are met.

OSP Financial Compliance will perform quarterly true-up of expenses accrued on CS awards. Cost share companion awards will receive credits via batch uploads (Trans Source Code: GMSA-OSP) from the cost sharing funding sources identified by departments. These funding sources will be debited for the amounts booked as cost shared expenses in the CS awards. The true up activities will be performed using unique CS expenditure types and will bring the CS award balances to zero ($0.00).

New Expenditure Types

  • Cost Share-Faculty Salary
  • Cost Share-Faculty FB
  • Cost Share-Univ Staff
  • Cost Share-Univ Staff FB
  • Cost Share-Classified Salary
  • Cost Share-Classified FB
  • Cost Share-Wages
  • Cost Share-Wages FB
  • Cost Share-Contractual Svcs
  • Cost Share- Supplies&Materials

For third party or other institutional cost sharing where CS companion award is not established, the Statement of Cost Sharing Certification must be completed and certified by the PI.

The OSP Post Award monitors cost shared expenditures through the life of the sponsored program, reports cost sharing to sponsors in accordance with their specific requirements and closes out cost sharing companion account along with the sponsored award. OSP Post Award recommends adjustments to cost sharing commitment when necessary, and directs department administrators to OSP Pre-Award for contacting sponsors.

OSP Financial Compliance prepares an annual cost shared expenditures report for the Cost Analysis group incorporating cost shared expenditures booked on cost sharing companion accounts, as well as non-federal sponsored, restricted gift or state funded awards.

Notes:

Allowable and allocable cost overruns can be considered as cost sharing when necessary.

Over the cap salary for NIH and other sponsored awards with salary restrictions cannot be used to meet cost sharing commitments. However, over the cap salaries and associated benefits are considered as research costs by the federal government, and will be included in the research base by Cost Analysis for indirect cost rate calculation.

Documentation (optional): 

Documentation to be retained by OSP in ResearchUVA:

  • Statement of Cost Sharing Certification  

Attachment A

List of Allowable Award Prefixes for Cost Sharing

Award Prefix

Award Type

Award Type Description

Cost Share Allowed?

Owner/Exclusion

DI

Gift-Restricted

Gift Sources-Restricted

yes

Financial Planning & Analysis (aka UBO)

DI

Gift-Unrestricted

Gift Sources-Unrestricted

yes

Financial Planning & Analysis (aka UBO)

DR

Gift-Restricted

Gift Sources-Restricted

yes

Financial Operations

DR

Gift-Restricted

UPG DR awards

yes

SOM Comptroller

DU

Gift-Unrestricted

Gift Sources-Unrestricted

yes

Financial Operations

EF

Endowment Income-Unrestricted

Endowment Income Sources-Unrestricted (Endow Fee)

yes

Financial Operations

EH

Endowment Income-Unrestricted

Endowment Income Sources-Unrestricted (Med Ctr/SOM Fund for the Future)

no

Financial Operations

EI

Endowment Income-ES Chair

Endowment Income-Eminent Scholars Chair

no

Financial Planning & Analysis (aka UBO)

EI

Endowment Income-Restricted

Endowment Income Sources-Restricted

no

Financial Planning & Analysis (aka UBO)

EI

Endowment Income-Unrestricted

Endowment Income Sources-Unrestricted

no

Financial Planning & Analysis (aka UBO)

EP

Endowment-Principal

Endowment Income from Divested Principal

no

Financial Operations

ER

Endowment Income-Chair

Endowment Income-Regular Chair

yes

Financial Operations

ER

Endowment Income-ES Chair

Endowment Income-Eminent Scholars Chair

yes

Financial Operations

ER

Endowment Income-Restricted

Endowment Income Sources-Restricted

yes

When restrictions allow

EU

Endowment Income-Unrestricted

Endowment Income Sources-Unrestricted

yes

Financial Operations

FA

F & A Costs

Facilities and Administrative Cost Sources (Grant Overhead)

yes

Financial Planning & Analysis (aka UBO)

FI

F&A Costs

Facilities and Administrative Cost Sources (Grant Overhead)

yes

Financial Planning & Analysis (aka UBO)

IP

Intellectual Property

Intellectual Property Income Sources

yes

VPR’s Office

LA

Local-Auxiliary

Local Auxiliary Sources

yes

Financial Planning & Analysis (aka UBO)

LC

Local-Chair Support

Local Chaired Professor Research Support Accounts

yes

Financial Planning & Analysis (aka UBO)

LC

Local-General Cornerstone

Local-General Cornerstone

yes

Financial Planning & Analysis (aka UBO)

LC

Local-General Infrastructure

Local-General Infrastructure

yes

Financial Planning & Analysis (aka UBO)

LC

Local-General Strategic

Local-General Strategic

yes

Financial Planning & Analysis (aka UBO)

LG

Local-General

Local General Fund Sources

no

Financial Planning & Analysis (aka UBO)

LG

Local-General-PFE

Local General Fund Sources-President's Fund for Excellence

yes

Financial Planning & Analysis (aka UBO)

LO

Local-Other

Other Local Sources (exclude student activity fees)

yes

Financial Planning & Analysis (aka UBO)

LP

Local-Plant Funds

Local Plant Fund Sources

no

Financial Planning & Analysis (aka UBO)

LS

Local-Sales and Service

Local Sales and Service Sources

yes

Financial Planning & Analysis (aka UBO)

RG

Residual

Residual Sponsored Program Funds

yes

Award Owning Org 

SA

State-Auxiliary

State Auxiliary Sources

yes

Financial Planning & Analysis (aka UBO)

SD

State-Sales and Service

State Sales and Service Sources (Debt Funds)

no

Financial Planning & Analysis (aka UBO)

SE

State-ETF

State Equipment Trust Fund

yes

Financial Planning & Analysis (aka UBO)

SG

State-E&G

State Educational and General Sources-Tuition, Appropriations, Fees

yes

Financial Planning & Analysis (aka UBO)

SP

State-Plant Funds

State Plant Fund Sources

no

Financial Planning & Analysis (aka UBO)

SR

State-Financial Aid

State Financial Aid

no

Financial Planning & Analysis (aka UBO)

SR

State-Eminent Scholars

Eminent Scholars Matching Program, GF and NGF Sources

no

Financial Planning & Analysis (aka UBO)

SR

State-Restricted

Restricted State Sources

maybe (dependent on purpose)

Financial Planning & Analysis (aka UBO)

SR

State-Restricted Sponsored

State Restricted Sponsored Funds

no

Financial Planning & Analysis (aka UBO)

SR

State-Tech Fee

State Technology Fee

no

Financial Planning & Analysis (aka UBO)

SR

State-VGUAP

Virginia Graduate and Undergraduate Assistance Program, GF and NGF

no

Financial Planning & Analysis (aka UBO)

SS

State-Sales and Service

State Sales and Service Sources

yes

Financial Planning & Analysis (aka UBO)

SS

State-Sales and Svcs Med Ctr

State-Sales and Services of Med Center (0309)

yes

Financial Planning & Analysis (aka UBO)

SS

State-SIP Clinical Trials

State-Strategic Investment Pool Clinical Trials

yes

Financial Planning & Analysis (aka UBO)

SZ

State-Financial Aid

State-Financial Aid (ARRA Funds)

no

Financial Planning & Analysis (aka UBO)

YY

Agency

Agency Sources

yes

Financial Operations

YA

Agency-Direct Loans

Federal Direct Loan Program

no

Student Financial Svcs 

Other (optional)

  • Before committing to cost sharing and including this commitment in a proposal, considerations about sponsor expectations, internal budget impacts and resulting administration should be weighed. Committing to cost sharing is usually only necessary when mandated by the sponsor.
  • Cost sharing of un-recovered facilities and administrative (F&A) costs are not always permitted by federal sponsors and may require prior approval before including these costs toward a commitment. The terms of the award and/or the Funding Opportunity Announcement/Request for Proposal may address this specifically. Prior to making such commitments, obtain appropriate approvals.  

Frequently Asked Questions:

Revision History: Reviewed and updated 8/11/2020