solving the mystery of cost sharing sponsored programs office technology and economic development...
TRANSCRIPT
Solving the Mystery of Cost Sharing
Sponsored Programs OfficeTechnology and Economic Development
November 4, 2009
Agenda• Cost Sharing Defined• Committing to Cost Share at the Proposal
Stage• Managing Cost Share at the Post Award Stage• Example• Hints
What is Cost Sharing?• Portion of project costs not reimbursed by the
sponsor• Cost share is a REAL dollar commitment• Often called “Matching”• Can be quantified as a specific dollar amount
or percentage• Required amount can be calculated from the
sponsor cost or the total project cost
Types of Cost SharingLook at Handout Michigan Tech Practice for Cost
Sharing on Sponsored Projects
• Mandatory– Sponsor specifies cost share is required– Proposal will need documentation of sponsor
requirement
Types of Cost Sharing• Voluntary Committed– Offered in the proposal– Not required by sponsor but strongly encouraged– Must be approved by SPO
• Voluntary Uncommitted– Cost share that is not documented to the sponsor– Examples: GACS for Assistant Professors, F & A
rate waiver
Sources of Cost Sharing• Effort• Other Direct Costs• Graduate Student Support• Facilities and Administrative Costs• External Third Party
Michigan Tech Cost Share Procedure
• Cost share can only be committed when required by sponsor
• Cost share can only be committed at the level required by the sponsor
Cost Share Procedure con’t
• Required cost share must be approved by all departments/colleges sharing the costs
• Required cost share must be included in an approved budget and be documented on a cost share/marching support form
Regulatory Requirements• Office of Management and Budget (OMB)
Circulars A-110 and A-21• If an expenditure is allowed to be charged to
the sponsor, it may be cost shared– Allowable, Allocable, and Reasonable– Cost must be incurred during the project period– Federal Funds may not be used as cost share– Unrecovered indirect costs may be used if sponsor
allows
Regulatory Requirements con’t
• Cost Share expenditures may only be cost shared on one project
Cost Sharing in the Proposal
• Submit budget with cost share to SPO• Describe cost share in the proposal narrative
or budget justification only when it is quantified and approved in the budget
• Every department/college/center that is participating in the cost share will need to approve the cost share and provide the source of funding
PROPOSAL COMMITMENTS =
AWARD REQUIREMENTS
Accepting Awards with Cost Share
• University must track and report cost share commitments throughout the life of the project
• SPO will send confirmation letter to 3rd party to confirm their support of the project (sample letter and information in handouts)
• PI’s responsibility to work with the SPO/SPA office to ensure that 3rd party cost share is documented and provided to the University
Cost Share Reporting
• SPA monitors cost sharing accounts and the expenditures posted to them
• SPA will generate cost sharing reports to submit to the sponsor’s fiscal representative when required
Cost Share Reporting con’t
• When technical reports require information on cost sharing, the data should be requested from SPA so the numbers are accurate
• Most sponsors will want to see that the cost share is keeping pace with the expenditures
Document, Document, Document!
• Documentation is required by Federal Cost Principles (OMB A-110)
• Verifies Michigan Tech’s fulfillment of the financial commitment towards the project
• Inadequate documentation can result in audit criticisms
Example• Joe Smith Budget Scenario with Cost Share
• What is needed at the proposal stage– Transmittal– Budget– Cost Share Form– Letters of support from external contributors
dated no earlier than 6 months prior to the date of submission
• What is needed at the award stage– When award is received SPO will inform all
external contributors of the award and confirm their commitment for the project• A sample letter and paperwork needed is attached
Lessons Learned• Only cost share when mandatory• Complete necessary forms• Ask questions early• Verify cost is allowable, allocable and
reasonable• Monitor your account• Communicate any problems or concerns early
Any questions?