Sponsored Programs Cost Sharing Policy

Responsible Unit: OSA| Executive lead: CRO
Created: 10/20/21 | Reviewed/Revised: N/A | Effective: 06/2024
Compliance: 2 CFR 200.430(a)1, 2 CFR 200.302 (b)7, NWCCU 2.B.2, COCA 8.2 
Approving Body: PAC | Classification: Institution-wide

Policy:   
Cost sharing is that portion of a project or program cost that is not reimbursed by the sponsor (whether Federal or non-Federal) and as such, represents a commitment of institutional resources that would otherwise be devoted to other University purposes.  

PNWU discourages committing cost share in any form if not mandated by the sponsor. 

As described in Memoranda 01-06 – Clarification of the Office of Management and Budget (OMB) A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition Remission Costs, there are three forms of cost sharing:  

  • Mandatory – required by a sponsor in order for a proposal to receive consideration and review 
  • Voluntary Committed – not required by the sponsor but is included in a proposal which becomes an obligation at time of award 
  • Voluntary Uncommitted – refers to any effort or resources contributed to the sponsored project beyond what was committed and budgeted for in a proposal. Such voluntary uncommitted cost sharing is not included in either the proposal budget or the narrative and is not required to be tracked or reported.  

Federal regulations require that Mandatory or Voluntary Committed Cost Sharing be treated consistently and uniformly in documenting, accounting, and reporting. They should comply with PNWU’s Federally approved cost accounting practices and be reflected in the PNWU’s Effort Reporting Certification.  

The expenses associated with cost sharing or matching contributions must be allowable in accordance with the OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance) and/or University and sponsor policies. Federal Standards for Acceptable Cost Sharing Under Federal awards, items committed as cost sharing must meet all of the following criteria in accordance with the OMB Uniform Guidance:  

  • Are verifiable from the recipient’s records.  
  • Are not included as contributions for any other Federal award;  
  • Are necessary and reasonable;  
  • Are allowable under Subpart E – Cost Principles;  
  • Are not paid by the Federal Government under another award, except where statutorily authorized by that sponsor;  
  • Are provided for in the approved budget, when required by the Federal sponsor;  
  • Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.  

Values for non-Federal entity contributions of services and property by PNWU or a subrecipient under a Federal award must be established in accordance with Federal guidelines (200.434).  

Appropriate Justification for Cost Sharing  
The following are illustrations of when cost sharing may be appropriate in sponsored projects:  

  • Under the Uniform Guidance, funding opportunity announcements must state whether there is mandatory cost sharing (therefore eligibility is limited to proposals which commit to shared costs, matching or other contributions) and identify any restrictions on the types of cost sharing that are acceptable;  
  • For Federal research proposals, voluntary committed cost sharing is not expected. It cannot be used as a factor during the merit review of applications, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. Vague statements from a Federal agency which encourage cost sharing will not be permitted. If authorized by sponsor regulation or statute, the announcement must also describe how the cost sharing will be considered. Please note that voluntary cost sharing is expressly prohibited by the National Science Foundation and will result in a proposal being returned without review.  

Sources of Cost Sharing  
The following non-sponsored (and in rare cases sponsored) sources would be considered appropriate sources of funds that the University may use to meet mandatory cost sharing commitments:  

  • Gifts  
  • Endowment Spending  
  • Startup funds  
  • Appropriated school and/or departmental funds  
  • Third Party or In-Kind Contribution (cash or donated goods or services)  
  • Other sponsored awards, when permitted 
  • Program income  

The following costs may not be used to meet mandatory cost sharing commitments:   
 

  • Costs pledged as cost sharing for another funded project (except as specifically approved by all parties);  
  • Costs under Federal awards funded by another Federally-sponsored program unless authorized by Federal statute;  
  • Costs funded by the same funding source as the sponsored project, unless specifically approved in the sponsored project;  
  • Costs of construction or renovation of University buildings, except with express sponsor approval;  
  • Costs that are included and reimbursed through the indirect cost rate (administrative salaries, office supplies, library expenses and operations and maintenance expenses); 
  • Dollars above the cap (NIH and other applicable granting agencies rules and regulations regarding salary caps) 
  • Overdrafts or costs deemed unallowable according to award terms and conditions; 
  • Unfunded salary for effort that extends beyond the contractual appointment period (i.e., unfunded summer months for faculty with nine-month academic appointments); 
  • Any costs not deemed to be necessary and reasonable for the proper and efficient accomplishment of project or program objectives.  

PNWU Restrictions on Cost Sharing  
As a general rule, the contribution of a Principal Investigator’s (PIs) academic year effort as voluntary committed cost sharing is subject to the following restrictions:  

  • It is the minimum required of all PIs for each project (mandatory for Federal grants only);  
  • When no summer salary may be requested (if the PI is already fully committed or the sponsor has prohibitions) or for 12-month appointments, up to 5% academic year salary may be cost shared with the approval of the Provost or Provostial Designee; 
  • Any voluntary cost sharing of PI effort above 5% on a single grant or 10% cumulatively (in the sum total of all awards) requires the written permission of the Provost or Provostial Designee. Categorical or class exceptions of such limitations will be considered by the Provost or Provostial Designee when sponsor practices can be documented which would make such ad hoc approvals unduly burdensome on the investigator.  

These are the methods of calculating cost sharing:  

  • The faculty effort multiplied by the institutional base salary and associated fringe benefits and PNWU’s Indirect cost rate for the grant.  

The difference between the rate for the grant and PNWU’s indirect cost rate may be considered as waived with approval by the Provost or Provostial Designee.  

Definitions:          
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Related Documents:
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Policy Resources

For assistance with policies and procedures contact:

Lori Fulton
lfulton@pnwu.edu