|COST ACCOUNTING STANDARDS POLICY
COST SHARING (Issued December 18, 1998)
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I. POLICY STATEMENT
Cost-sharing must be proposed, approved, administered, and accounted for in a consistent and prudent manner. This includes understanding workload implications of the cost-sharing commitment; determining when cost-sharing is appropriate; and accurately recording and reporting cost-sharing expenses. Cost sharing that is not mandatory (required by the sponsoring agency) is discouraged. Cost-sharing commitments must be approved by the Office of Grant, Contract & Patent Administration prior to proposal submission.
The University sometimes must provide resources in a "cost-sharing" arrangement to support a sponsored project. Contribution of such resources must be carefully considered and approved by the party with budgeting authority (usually the dept. chair). Once committed, it is important to document the fulfillment of the University's responsibilities for cost-sharing, and to maintain compliance with government regulations, primarily Office of Management and Budget (OMB) circulars A-21
and A-110. This policy is intended to help with:
- determining when cost-sharing is appropriate on "competitive proposals," and what costs and services qualify for cost-sharing under federal regulations;
understanding the administrative, contractual,
and financial requirements that result from cost-sharing commitments;
accurate reporting to Sponsored Programs
Accounting, which will in turn report to sponsoring agencies, that the
University has fulfilled any cost-sharing commitments it may have made
as a condition of an award.
proper recording of cost-sharing in the University
's accounting system in order to comply with OMB circulars A-21
and to ensure consistent collection of cost-sharing information necessary
for University purposes.
III. EFFECTIVE DATE
This policy is effective on July 1, 1999.
The policy applies to all costs incurred (or sponsored agreement budget
periods beginning) on or after that date.
A portion of total project or program
costs related to a sponsored agreement that is contributed to a sponsored
project or program by someone other than the primary sponsor.
A cost that directly benefits and is
specifically identifiable to a sponsored project or program.
Time spent by a Principal Investigator
or employee on a sponsored project or program.
Facilities & Administrative Cost
(Previously call Indirect Cost)
A cost that does not directly benefit,
and is not specifically identifiable to a sponsored project or program,
but is incurred in support of the project or program. F&A includes
such items as utilities and other plant costs, and certain administrative
A contribution to a sponsored project
or program, pledged to match some portion of funds provided by the primary
sponsoring agency. Matching contributions may be in any form, including
University costs and third party in-kind.
Third Party In-Kind Contribution
A non-cash contribution to a sponsored
project or program, provided by a party other than either Brandeis University
or the primary sponsoring agency. Third party in-kind contributions may
be in the form of services directly benefiting and specifically identifiable
to the project or program, equipment or other property, supplies, etc.
This cost-sharing policy applies to federal
and non-federal sponsored agreements.
WHAT IS COST SHARING
Cost-sharing may be required by the sponsor
or voluntarily offered by the Principal Investigator, and may or may not
be included in the sponsored award document. If the sponsor does not pay
any salary and wage expenses on the project, it is reasonable to assume
that there is some Principal Investigator effort or effort of other employees
that is cost-shared. However it originates, cost-sharing represents a University
commitment to provide resources to a sponsored project.
Caution: It is the responsibility
of the Principal Investigator and the department to evaluate the workload
implications of proposed cost-sharing and to ensure that the University's
cost-sharing commitment is met.
Though awarded to a single unit or department,
some sponsored agreements involve multiple University units or departments.
In these cases, special attention must be paid to policy compliance by
all concerned entities. Thus, it is the responsibility of the department
that has received the award (the "prime department" or "submitting unit")
to monitor and advise all affected units or departments regarding compliance
with the cost-sharing terms of the sponsored agreements.
ALLOWABLE COSTS FOR COST SHARING
To be allowed for cost-shared expenses,
costs must be all of the following:
For federal awards, the costs must not be
any of the following:
allowable and allocable under federal cost
principles (OMB circulars A-21)
and the terms of the sponsored agreement.
certifiable in the time and effort distribution
and certification process (for cost-shared effort).
necessary and directly related to the project
objectives (except reduced or waived indirect costs).
SPECIFIC EXPENSES THAT MAY BE CONSIDERED
FOR COST SHARING
included as cost-sharing for any other federally
sponsored project or program.
paid by the Federal Government under another
award, except where authorized by Federal statute to be used for cost-sharing.
Cost-sharing may consist of direct or
unrecovered indirect expenses (i.e., waived or reduced indirect cost rate).
When direct expenses are cost-shared, the applicable indirect cost rates
are also cost-shared.
Generally, cost-sharing should be in the
form of salary and associated fringe benefits.Non-payroll cost-sharing
is discouraged unless mandated by the sponsoring agency or the nature of
the sponsored agreement.
Waived or reduced indirect costs (i.e.,
the difference between the applicable federally negotiated indirect cost
rate and the amount of indirect costs awarded by the sponsor) is also discouraged.
Cost overruns are a form of cost-sharing.
ESTABLISHING COST SHARED EFFORT
In order to fulfill the University's responsibility
to sponsors, sponsored projects include some Principal Investigator or
other personnel effort that is directly charged to or explicitly cost-shared
with the agency. This effort must be quantified in the proposal. The amount
of effort must be realistic (i.e., neither overstated nor understated),
and must be determined on a project-by-project basis.
Caution: The total of one's effort,
including other University duties, must not exceed 100%.
REALISTIC COST SHARING COMMITMENT
In determining the appropriate level of
cost-shared effort, investigators should consider the following:
Prior to award acceptance, the Office of
Grant, Contract & Patent Administration (OGCPA) will contact the department
or the Principal Investigator with any concerns it has regarding the University's
proposed cost-sharing commitment. At the time of the award, OGCPA will
notify Sponsored Programs Accounting and the department of the cost-sharing
requirements (including revised cost sharing commitment, applicable).
the sponsor's requirement for cost-sharing.
the percentage of time spent on other sponsored
the amount of effort devoted to other functions
such as teaching.
whether the project involves co-Principal
the size of the project.
Caution:For some agencies (e.g.
NSF), once the award is accepted, failure to comply with the cost-sharing
commitment may result in a loss or return of project funds. tracking of
cost-sharing should be done periodically by departments (e.g., when monthly
transaction statements are reconciled) to prevent an over or under-contribution.
Over-contributing prevents use of those costs for meeting commitments on
other projects; under-contributing may result in a corresponding reduction
in the award.
ACCOUNTING FOR COST SHARING
All cost-shared expenditures of a sponsored
project must be properly recorded and reported in the University accounting
system. Cost-shared expenditures must be identified with the same functional
classification as the sponsored award.
To facilitate the accumulation and reporting
of cost-sharing expenditures by specific awards, departmental administrators
should track cost-sharing expenditures by award.Cost sharing expenditures
in the form of salary will be extracted from the time & effort certifications.Non-payroll
cost-sharing will be charged to a specified cost-sharing account for each
project which will be given upon request by OGCPA.This account number should
be requested upon the award of a project with cost-sharing commitments.
Throughout a project's life, the Principal
Investigator and the department must maintain sufficient supporting documentation
to substantiate the actual cost-sharing contribution to the project. This
documentation may be required by sponsors, auditors, and/or Sponsored Programs
The specific type of documentation required
is based on the nature of the award, the type of cost that is cost-shared,
the terms of the sponsored agreement, and other circumstances of the award.
For further information, contact Sponsored Programs Accounting.
EFFORT REPORTING AND CERTIFICATION
The University effort distribution and
certification process requires that all effort directly associated with
a sponsored project be classified consistently, even if salaries are not
charged to the sponsor. When there is a significant change from the individual's
planned effort, including the cost-shared amount, a change to the employee's
payroll effort distribution should be processed. Effort, including the
cost-shared amount, must be confirmed after the fact as part of the certification
If you have any questions about this policy,
how to treat a specific cost, or need information, please contact the Associate
Controller for Sponsored Programs at x6-4423, the Assistant Controller
of Cost Accounting at x6-4535, or the Internal Auditor at x6-4516.