Cost Sharing Basics

Professional Development InstituteJanuary 2010

Cost Sharing Definition• Portion of total project costs not borne by the sponsor

– Direct• Cash• In-kind

– Facilities and Administrative Cost• OVPR approval required• Sponsor approval required

• Types of cost sharing– Mandatory

• Required by the terms of the sponsor agreement• Salary Cap• Institutional vs. Project

– Voluntary• Committed• Uncommitted

Federal Guidance

OMB Circular A-21

• Cost Accounting Principles• Allowable, Allocable,

Reasonable

OMB Circular A-110• Administrative Guidance• Cost Share Language Subpart C_23

• Verifiable from recipient records

• Not included as contribution to another federal project

• Necessary and reasonable• Allowable under cost

principles (see above)• Not paid from another

federally-sponsored project (unless approved)

• Provided for in the budget• Conform to other provisions

of A-110

CSU Guidance

• PI Manual Section VIII– Keep cost share at lowest level possible

• Process Considerations – Proposal Stage– ASAP • Contact your Senior Research Administrator

– Indicate on SP-1 (PASS)• http://web.research.colostate.edu/osp/pdf/sp-1.pdf • Obtain necessary approvals

– Department Head, Dean, Director, OSP, VPR• Identify sources

CSU Guidance

• Process considerations – Proposal– SP-8 (F&A Waiver)• http://web.research.colostate.edu/osp/pdf/sp-8.pdf

– Institutional Commitment Form• http://web.research.colostate.edu/osp/pdf/

costshare.pdf – Documentation from 3rd Parties

• Process considerations – Award– Creation of cost share account (SP-9)• http://web.research.colostate.edu/osp/pdf/sp-9.pdf

CSU Guidance

• Process considerations – Award– Creation of cost share accounts• Done after 53 account is set up• Accuracy• Process or changes should be coordinated through OSP

– Cost share account coordinator (Clint McBlair)

– Unrecovered F&A • Account not needed

Cost Share Issues and Misconceptions

• Cost Sharing is not “Real Money”– Direct Cost– F&A Costs

• Effective rate much less than 47%• Utilities, maintenance, construction, equipment• Human Resources, Department Administration, OSP

• Double “Whammy”– F&A rate calculation– Bigger base = lower recovery rate

• Competitiveness– Leverage vs. cost sharing

Example Proposal Language

• Effort equivalent to $25,000 in salary and benefits will be provided to the project by Professor Roy Hinkley

• Professor Longhair will act as principal investigator and requests 30% salary support. He will provide additional support as needed.

• Dr. Christmas Jones will have access to addition resources such as a Large Hadron Collider to complete the work of the project

Valuation Examples

• To demonstrate the value of the energizer battery consumption algorithm we will subject three electric cars (MSRP $25,000 each) to various operating scenarios. The cars will be provided to the project by their owners for the test period free of charge.

• Ray Kinsella will provide a 3 acre tract of land for a period of 1 year to test the efficacy of new field lights at no cost to the project. The fair market value of the land is $5,000 per acre.

Valuation Examples

• To accomplish the renovation of the homeless shelter Mr. Perry Mason, Esq. will provide 60 hours of general construction work. A noted attorney, Mr. Mason’s billable rate is $500 per hour.

• Mr. Tony Stark will donate 10 copies of his system control software (MSRP $50 each) to the project.

Valuation Examples

• To celebrate the successful completion of the project the School of Applied Fermentation will sponsor a Beer Pong competition for the faculty and staff associated with the project.

• The sponsor requires 5% cost share for a project and considers tuition an unallowable cost. Since my graduate student worked on the project and my department supported the tuition I can count the tuition toward my requirement.

Documentation

• Professor “Wrong Way” Feldman neglected to set up the required cost share account to collect the voluntary committed cost share for her project on topography. A memo from her stating that 10 volunteers worked on the project is sufficient support.

• A letter from a corporate sponsor stating, “We support the project by committing goods and services up to $5,000” is sufficient support.