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Navigating Labor Distribution & Cost Sharing Percentages

SPAR COST SHARE 101

Office of Financial Compliance for Research

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Cost Sharing refers to costs associated with a sponsored project that are not funded by the sponsor. We categorize the types of cost sharing in the SPAR application by the following codes:

K – indicates that a portion of the actual eff ort allocated to this project is to be cost shared to a Career Development, or K-Award.

M – indicates Mandatory Cost Sharing, also referred to as MCS. Mandatory cost sharing is statutorily required based on a sponsor-mandated salary cap restrictions.

V – represents voluntary, committed cost sharing. This occurs when named personnel commit a certain level of eff ort to the project and the award budget provides salary support at a lower level.

O – represents other, voluntary uncommitted cost sharing. This may occur in the case of a no-cost extension when eff ort continues but no more salary support is available.

N – Not applicable. This code is used to indicate that there is no cost sharing associated with this sponsored project. This code is also to be used for all non-entity 05 accounts.

TYPES OF COST SHARING

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Cost Share Recipient Account – The inst itut ional (ent ity 02 or 04) account or K-award account that absorbs the project costs not funded by the sponsor.

Cap El igible Employee – An employee ident ifi ed by the SPAR appl icat ion whose annual ized salary exceeds the DHHS salary cap.

Cap Account – A sponsored project account ident ifi ed by the SPAR appl icat ion as being subject to a sponsor- imposed salary cap.

Mandatory Cost Sharing (MCS) – That port ion of an employee’s salary that exceeds the sponsor imposed salary restr ict ion and must be cost shared to an inst itut ional account as required by the agencies of the DHHS.

Regular L ine - Any of the l ines entered in the Eff ort Report ing and Distr ibut ion sect ion of the SPAR screen which include Actual and Distr ibuted eff ort percentages.

Jo int L ine - Any of the l ines entered in the Cost Sharing for Eff ort Report ing sect ion of the SPAR screen which ident i fy cost shar ing relat ionships and the percentage of eff ort to be cost shared. Only Ent ity 05 accounts may be entered on jo int l ines.

COST SHARE TERMS

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DHHS Mandated Salary Cap (Mandatory Cost Sharing) The length of a faculty member’s appointment must be

considered when determining who is subject to the salary cap restriction, as follows:

Length of Appointment Salary Limit 12-Month $179,700 10-Month $149,750 9-Month $134,775 8-Month $119,800

Part-time positions must be adjusted to reflect salary at 1 Full Time Equivalent for comparison to salary cap limits.

Any salary paid over the limit must be cost shared to an institutional account.

SITUATIONS REQUIRINGMANDATORY COST SHARING

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Scenario – Jane Doe:8-Month AppointmentPart-time, 50% Full Time Equivalent (FTE) Institutional Base Salary, ‘IBS’ (contract salary + any

administrative supplements) = $60,000

Monthly salary$60,000 / 8 = $7,500

Annualized salary$7,500 X 12 = $90,000

Annualized salary adjusted to 1 FTE$90,000 / .50 = $180,000

EXAMPLE OF CAP ELIGIBLE CALCULATION

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% of Actual Eff ort allowable on sponsored projectCurrent Cap Limit / Annualized Salary@1FTE

$179,700 / $180,000 = 99.83%

This means that only 99.83% of whatever level of Actual Eff ort spent on a project can be charged to the project account.

In this example, if this employee has 20% Actual eff ort for this project on the SPAR, the allowable, or distributed, eff ort is 20% X 99.83% or 19.96%.

The diff erence of .04% is the required mandatory cost shared percentage.

ALLOWABLE SALARY DISTRIBUTION

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A template has been developed and is available on the Financial Compliance for Research website to assist you in calculating MCS.

Enables you to determine MCS at various levels of effort. Calculates the monthly/annual cost of required cost sharing. Can be used at the proposal phase to project budgetary

impact. Requires data entry of compensation information in fields

highlighted in blue. Error messages in the calculated columns will disappear as information is entered.

The MCS Template is accessible at: www.cfo.pitt.edu/fcr An example of this template is provided on the next page.

MCS CALCULATION TEMPLATE

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Individual devotes more eff ort to a project than there is funding to cover salary. (Voluntary, Committed Cost Sharing)

Dr. Smith spends 30% of his time on sponsored project A.

Salary budget of project A provides only 20% of Dr. Smith’s salary.

SPAR must reflect 30% actual effort – 10% cost sharing to institutional account & 20% distributed effort to sponsored project A.

Actual Eff ort 30Level of Sponsor Funding - 20Voluntary Cost Share Requirement 10

SITUATIONS REQUIRINGVOLUNTARY COST SHARING

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LABOR DISTRIBUTION & COST SHARING PERCENTAGES

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Eff ort Reporting and Distribution   Increase/ RelatedLine # Account # Actual% Dist% (Decrease) Jo int #1 02.22298.5100.00000.000000 10 37 27 1 . 0 1 + 1 . 0 2

2 05.22298.5100.00000.123456 50 35 (15) 1 . 0 1

3 05.22298.5100.00000.234567 40 28 (12) 1 . 0 2

  100 100 0

Cost Sharing for Eff ort Reporting CS%1.01 05.22298.5100.00000.123456 151.02 05.22298.5100.00000.234567 1227  The cost share rec ip ient account on l ine 1 receives the cost shared eff ort on

re lated jo int l ines 1.01 and 1.02. The system adds the CS% from l ines 1.01 and 1.02 to the Actual% on l ine 1 (15+12+10=37).

  The sponsored pro jects on l ines 2 and 3 have re lated cost shared eff ort

subtracted f rom Actual% to determine Dist%. For example, sponsored pro ject on l ine 2 has Actual% of 50% less the re lated CS% on l ine 1.01 of 15% resul t ing in 35% Dist%.

Note: Figures in b lue do not appear on the SPAR screen. They are inc luded here for t ra in ing purposes only.

EXAMPLE OF THE FUNCTIONALITY OF THE DIST% COLUMN

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Following are some basic rules for cost sharing in the on-line SPAR:1. Three lines are required for every cost share relationship

a) The regular sponsored project lineb) The cost share recipient line (institutional account or K-Award)c) The joint line

2. The Start and End dates on all three lines within the cost share relationship must be consistent.

3. A cost share recipient line may be related to more than one sponsored project but all related sponsored project regular and joint lines must have Start and End dates consistent with the recipient line.

COST SHARE BASIC RULES

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COST SHARING A SINGLE GRANT, FOR LESS THAN THE ENTIRE PERIOD OF PERFORMANCE

COST SHARE TIMELINEJan 20xx Feb 20XX Mar 20XX Apr 20xx

1 01-JAN-20xx 30-APR-20XX Department Account XX%2 01-JAN-20xx 28-FEB-20XX Grant Account XX%

1.01 01-JAN-20xx 28-FEB-20XX Joint Account Line XX%

SYSTEM REQUIRED ENTRIES1 01-JAN-20xx 28-FEB-20XX Department Account XX%2 01-JAN-20xx 28-FEB-20XX Grant line XX%3 01-MAR-20XX 30-APR-20XX Department Account XX%

1.01 01-JAN-20xx 28-FEB-20XX Joint Account Line XX%

A. Change the end date on the recipient line #1 to correspond with grant line and joint line to complete the CS relationship.B. Create new Department line #3 to continue the departmental effort.

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COST SHARING A SINGLE GRANT, WITH INTERMITTENT CS% DURING THE PERIOD OF PERFORMANCE

COST SHARE TIMELINEJan 20xx Feb 20XX Mar 20XX Apr 20xx

1 01-Jan-20XX 30-APR-20XX Department Account XX%2 01-FEB-20XX 30 APR-20XX Grant Account XX%

1.01 01-FEB-20XX 31-MAR-20XX Joint Account Line XX%

SYSTEM REQUIRED ENTRIES1 01-FEB-20XX 31-MAR-20XX Department Account XX%2 01-FEB-20XX 31-MAR-20XX Grant Account XX%3 01-JAN-20XX 31-JAN-20XX Department Account XX%4 01-APR-20XX 30-APR-20XX Department Account XX%5 01-FEB-20XX 30-APR-20XX Grant Account XX%

1.01 01-FEB-20XX 31-MAR-20XX Joint Account Line XX%

To alter the recipient account line to accommodate the date ranges of the related grant and cost sharing lines:A. Change the start and end date on the recipient line #1 to correspond to the grant and Joint lineB. Create a new Department line #3 to recognize effort before cost sharingC. Create a new Department line #4 to recognize effort after cost sharing.

To alter the grant account line to accommodate the date ranges for the department and cost sharing lines:D. Change the end date on line number #2 to correspond to the department and joint lines.E. Create a new grant line #5 to recognize effort after cost sharing ends.

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COST SHARING TWO GRANTS TO ONE DEPARTMENT ACCOUNT

COST SHARE TIMELINEJan 20xx Feb 20XX Mar 20XX Apr 20xx

1 01-Jan-20XX 30-APR-20XX Department Account XX%2 01-FEB-20XX 30 APR-20XX Grant A Account XX%3 01-MAR-20XX 30-APR-20XX Grant B Account XX%

1.01 01-FEB-20XX 31-MAR-20XX Joint Account Line A XX%1.02 01-MAR-20XX 30-APR-20XX Joint Account Line B XX%

SYSTEM REQUIRED ENTRIES1 01-Jan-20XX 31-JAN-20XX Department Account XX%2 01-FEB-20XX 28-FEB-20XX Grant A Account XX%3 01-MAR-20XX 30-APR-20XX Grant B Account XX%4 01-FEB-20XX 28-FEB-20XX Department Account XX%5 01-MAR-20XX 30-APR-20XX Department Account XX%6 01-MAR-20XX 30-APR-20XX Grant A Account XX%

1.01 01-FEB-20XX 31-MAR-20XX Joint Account Line A N/A1.02 01-MAR-20XX 30-APR-20XX Joint Account Line B N/A4.01 01-FEB-20XX 28-FEB-20XX Joint Account Line A XX%5.01 01-MAR-20XX 30-APR-20XX Joint Account Line A XX%5.02 01-MAR-20XX 30-APR-20XX Joint Account Line B XX%

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DIRECTIONS FOR MODIFYING TWO GRANTS TO ONE DEPARTMENT ACCOUNT.

Modify Department effort as follows:A. Change the End Date on Line #1 to Jan 31 to conclude departmental Actual Effort % of 100% due to Grant A activity beginning

in February.B. Create new department Line #4 with a Start Date of Feb 1 and End Date Feb 28 to form recipient cost share relationship with

Grant A and to allocate Actual effort between the two activities. Feb 28 End Date necessary due to Grant B activity beginning in March.

C. Create new department Line #5 with a Start Date of Mar 1 and End Date Apr 30 to form recipient cost share relationship with Grants A and B and to allocate Actual effort between all activities.

Modify Grant A effort as follows:D. Change the End Date on Line #2 to Feb 28 to be consistent with step B above.E. Create Line #6 with Start Date Mar 1 and End Date Apr 30 to continue Grant A effort and to form cost share relationship

with new department line #5 above.Grant B Regular line requires no modification.Modify Joint lines as follows:

F. Change cost share effort %’s to 0 on lines #1.01 and #1.02, these Start and End Dates are not consistent with the dates on line #1.

G. Create joint line #4.01 to establish a cost share relationship between Grant A and recipient Line #4.H. Create joint line #5.01 to establish a cost share relationship between Grant A and recipient line #5.I. Create joint line #5.02 to establish a cost share relationship between Grant B and recipient line #5.

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Every cost share relationship requires three l ines (recipient, project and joint). Start and End Dates must be consistent on all three l ines.

A cost share recipient l ine may be related to more than one project account but each set of project and joint l ines must have Start and End Dates consistent with the recipient l ine.

Voluntary cost sharing l ines for Non-Cap Eligible employees may have diff erent values for Actual% and CS%. Actual% cannot be less than CS%.

Voluntary cost sharing l ines for Cap Eligible employees on Cap Accounts must have equal values for Actual% and CS%.

Voluntary cost sharing l ines for Cap Eligible employees for non–Cap Accounts may have diff erent values for Actual% and CS%. Actual% cannot be less than CS%.

Eff ort that is 100% voluntarily cost shared must have a regular sponsored project l ine to record Actual eff ort. The off setting cost share entry wil l create a zero Distributed percentage. (see #1 above)

Only Entity 05 accounts may be entered in Joint l ines.

SUMMARY OF KEY COST SHARING PRINCIPLES

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Access to the new on-line SPAR screen through the PRISM system will begin on September 10, 2012.

During the time periods noted below, SPAR users will have access to all inquiry functions and view only access to the on-line SPAR screen. SPAR modifi cation functionality will not be available during these times. Nightly from 9:30 p.m. until midnight to accommodate daily

processing and updates to related applications. During the month-end closing processes, beginning at 5:00

p.m. on the 2nd working day of each month until 6:00 a.m. on the 5th working day of the month.

Non-routine system maintenance will be performed as required and may result in unscheduled SPAR application restrictions.

SYSTEM AVAILABILITY

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Offi ce of Financial Compliance for Research 2502B Cathedral of Learning Pittsburgh, PA 15260

Website: www.cfo.pitt.edu/fcr

Email: sparhelp@cfo.pitt.edu

CONTACT INFORMATION

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EXAMPLE 1: FACULTY A SPAR01

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Facts regarding Faculty A : Not Cap E l ig ib le . In i t ia l d is t r ibut ion: 80% to departmenta l account and 20% to pro ject 113170 for

the ent i re per iod of per formance, September through December. New sponsored pro ject , 30% of h is eff ort beginning October 1 s t .

Steps to update his SPAR for new award:1. Change the End Date on l ine 1 to Sep 30 to accommodate the change in

departmenta l eff ort go ing forward due to the eff ort devoted to the new award.2. Create a new departmenta l account l ine. (See instruct ions for copy ing account

numbers on page 26 of course mater ia ls . ) C l ick the New box to the le ft o f l ine 3.3. In the pop-up box, enter the account number or complete the copy funct ion.

Modi fy the Start Date to October 1 and End Date to December 31. Enter Actual eff ort o f 50%. Th is represents the former department eff ort o f 80% less the eff ort devoted to the new sponsored pro ject o f 30%. C l ick OK to t ransfer the data entered to the new SPAR l ine 3.

4. Create the new sponsored pro ject l ine. C l ick the ‘New’ box on the next l ine. The Dates in the pop up box are populated wi th dates f rom the preceding l ine. Confi rm that dates are October 1 and December 31. Enter the sponsored pro ject account number and 30% Actual eff ort . C l ick OK to t ransfer the data entered to the new SPAR l ine 4.

5. Cl ick Refresh/New Pct to confi rm that the SPAR is in ba lance, then Save.

EXAMPLE 1 DETAILS

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New Award Facts: Committed eff ort 30% Salary support 25%, requir ing 5% Voluntary Cost Sharing

Steps to update his SPAR to recognize Voluntary Cost Sharing:1. Line 4 saved with ‘N’ cost share code. Cannot modify saved account

numbers. Change Actual eff ort to 0%.2. Cl ick ‘New’ box on l ine 5. Veri fy that dates match former l ine 4. Enter

sponsored project account # with ‘V’ cost share code. Enter 30% Actual eff ort. Cl ick OK.

3. Highl ight l ine 3 to identi fy recipient account. Cl ick ‘New’ box in Cost Sharing for Eff ort Reporting section to l ink recipient account to joint l ine. In pop-up box, confi rm dates, enter account # with ‘V’ code and 5% cost shared %. Cl ick OK.

4. Cl ick Refresh/New Pct button to confi rm SPAR is in balance. Save.

EXAMPLE 1 DETAILS (CON’T)

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EXAMPLE 2: FACULTY E SPAR01

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Facts regarding Faculty E SPAR 01 : Cap El igible. In it ia l distr ibution: 100% to departmental account for the ent ire period of

performance, September through December. New DHHS sponsored project, 20% of his eff ort beginning September 1 s t .

Steps to update his SPAR for new award:1. Cl ick on Actual eff ort % fi eld on l ine 1 and change from 100% to 80% to

al low for grant eff ort.2. Cl ick on ‘New’ box on l ine 2 to enter regular sponsored project l ine.

Confi rm dates are Sep 1 – Dec 31, enter 05 account number, and 20% actual eff ort, OK.

3. Check in Cap Acct box indicates subject to MCS. Change cost share code on l ine 2 from ‘N’ to ‘M’.

4. Highl ight the recipient l ine 1 to establ ish the cost share relat ionship and cl ick the ‘New’ box in the Cost Sharing for Eff ort Report ing sect ion. Pop-up box dates agree with recipient dates, enter 05 account number from l ine 2 with ‘V’ cost share code. P lace cursor in CS% fi eld and cl ick Calc MCS button. Refresh and Save.

EXAMPLE 2 DETAILS

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EXAMPLE 3: FACULTY E SPAR02

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Facts regarding Faculty E SPAR 02 : Cap El ig ib le. In i t ia l d istr ibut ion: 100% to departmental account for the ent ire per iod of

performance, September through December. New DHHS sponsored project , 30% eff ort beginning November 1 s t , MCS required.

Steps to update his SPAR for new award:1. Cl ick on l ine 1 End Date and change to Oct 31. This is necessary to start new

department l ine with dates consistent with DHHS sponsored project.2. Create new dept/recip ient l ine. Cl ick ‘New’ box on l ine 2. In pop-up box enter

Start Date of Nov 1 and End Date of Dec 31, department account #, and 70% Actual eff ort . Cl ick OK.

3. Create sponsored project l ine. Cl ick ‘New’ box on l ine 3. In pop-up, confi rm dates to be same as rec ip ient l ine, enter project account # with ‘M’ cost share code s ince MCS appl ies, and Actual eff ort of 30%. Cl ick OK.

4. Create jo int l ine. Highl ight recip ient l ine 2 to establ ish the cost share re lat ionship and c l ick the ‘New’ box in the Cost Shar ing for Eff ort Report ing sect ion. Pop-up box dates agree with rec ip ient dates, enter 05 account number from l ine 3 with ‘M’ cost share code. Place cursor in CS% fi eld and c l ick Calc MCS button. Refresh and Save.

EXAMPLE 3 DETAILS

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New Budget Information: Committed eff ort 30% Salary support 25%, requir ing 5% Voluntary Cost Sharing

Steps to update his SPAR to recognize Voluntary Cost Sharing:1. The Voluntary Cost Sharing requires a ‘V’ cost share code. Current

sponsored project l ine requires ‘M’ code to satisfy MCS requirement. Need a second l ine to refl ect Voluntary Cost Sharing.

2. Cl ick ‘New’ box on l ine 4. Verify that dates match recipient l ine 2. Enter sponsored project account # with ‘V’ cost share code. Enter 5% Actual eff ort. Cl ick OK.

3. Place cursor in Actual% fi eld on l ine 3 and change value to 25%. Reduction is necessary to properly state Actual eff ort for project when total ing l ines 3&4.

4. Highl ight l ine 2 to identify recipient account. Cl ick ‘New’ box in Cost Sharing for Eff ort Reporting section to l ink recipient account to joint l ine. In pop-up box, confi rm dates, enter account # with ‘V’ code and 5% cost shared %. Cl ick OK, data transferred to new l ine 2.02.

5. Cl ick Refresh/New Pct button to confi rm SPAR is in balance. Save.

EXAMPLE 3 DETAILS (CON’T)

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To copy an account number to a regular SPAR line:1. Highlight the account number to be copied, Press Ctrl-C2. Click ‘New’ box on next available line in Effort Reporting

and Distribution section3. Place cursor in account number field in pop up box, Press

Ctrl-V

To copy an account number to a joint SPAR line:1. Highlight the account number to be copied, Press Ctrl-C2. Highlight the cost share recipient line3. Click ‘New’ box on the next available line in the Cost

Sharing for Effort Reporting section4. Place cursor in account number field in pop up box, Press

Ctrl-V

INSTRUCTIONS FOR COPYING ACCOUNT #