Documenting Cost Sharing
Cost share or matching funds are terms used to describe the portion of a project supported by the university or a third party other than the sponsor. Cost share is comprised of contributions, including cash and in-kind, that a recipient provides to complete the work on an award. Requirements for cost share vary widely among sponsors but generally require that the university provide effort, equipment or other items of value to the project.
Cost share falls into three categories:
Mandatory : an amount or percentage required by the sponsor in order to receive the award
Voluntary Committed : an amount or percentage committed in the proposal and/or budget not required by the sponsor in order to receive the award
Voluntary Uncommitted : typically effort not required by the sponsor as a condition for the award and not committed by the faculty in the proposal and/or budget, but performed as part of the project work
Other costs can also be Voluntary Uncommitted.
Cost share must be documented and substantiated. If mandatory or voluntary committed cost share requirements are not met, a proportionate amount of the project's direct costs may be disallowed. Cost share generally requires additional documentation. Therefore, unless required, cost share should not be included in a proposal.
OMB Circular A-110 requires that cost share be:
- verifiable to records
- not included as a contribution for any other federally assisted program
- necessary and reasonable to accomplish the program objectives
- allowable and allocable under the cost principles
- not paid under another federal award
- provided in the budget when required by federal agency
- in conformance to other A-110 provisions
The majority of cost share provided by UNL is in the form of effort and is documented using the Personnel Activity Report (PAR). Other forms of cost share must be documented in the same manner as costs charged directly to an award. All cost share is subject to audit. Paid receipts and travel vouchers should be kept in accordance with UNL's retention policies.
These tools may be used to accumulate costs:
1.Companion cost center: A companion cost center to record financial expenses associated with the cost share for an award can be established in SAP. Companion cost centers should be used if there is a high dollar amount and high volume of financial transactions to support the award.
2. Subsidiary ledgers: A subsidiary ledger of items of cost used to support an award's cost share requirement can be maintained by the department (and provided to Post-Award). The original invoice submitted to UNL Accounting should have the information “USED AS COST SHARE FOR AWARD XX-XXXX-XXXX-XXX” written on it. Subsidiary ledgers should be used when there are few financial transactions needed to support an award's cost share requirement or the cost share will be met entirely (or mostly) with effort.
Cost Share provided by a Third Party
If cost share is being provided by a third party, special care should be exercised to ensure that the third party meets its requirement and can document that it was met. UNL must make up any unmet amount. A Third Party Cost Sharing Contributions form may be used to substantiate that the cost share was provided.
Donated Items/Volunteer Services
Donated items can be used as cost share but must be assigned a reasonable value and shall not exceed the fair market value of the item at the time of donation. Services must be valued at the value paid for a similarly skilled paid position including an amount of fringe benefits that are reasonable, allowable and allocable, but exclusive of overhead costs.
OMB Circular A-110 provides additional guidance on valuing donated items. If you have any questions about valuing donated items, please contact your Post-Award Project Specialist.
