Cost sharing refers to the portion of project costs not paid by the sponsor. It includes the university's contribution to carrying out project objectives. There are mandatory, committed, and conditional forms. Costs can be proportional to awards, effort percentages, or specific dollar amounts. Documentation is needed to track cost sharing commitments and expenses over time to meet sponsor and university requirements.

1. Presented by the Office of Sponsored Programs,
a division of the Office of Research
and
Research Accounting and Analysis, a division of Financial Management at the
University of Washington
March 30, 2010

2. Cost Sharing Basics
What is Cost Sharing?
A.Cost sharing is the portion of project or program costs
not borne by the sponsor and quantified in the
proposed budget and budget narrative.
B.It is the University’s share of the cost of carrying out
the objectives of a project or program.

3. Cost Share Basics -
The Proposal Stage

4. Definitions
What are the various forms of cost sharing?
A. Mandatory – Required in order to qualify for an award.
(M)
B. Committed – Not required but voluntarily included in
the proposal budget or narrative of the proposal.
C. Conditional – Such as salary limitations imposed by
the sponsor. (Salary Cap (C)) or “K” award salary limit
(K)

5. Definitions
What are the methods for cost sharing?
A. Proportional to the award and percentage of the award
are sometimes referred to as “matching”.
B. Percentage of effort committed to the project but not
included in the requested award amount.
C. Specific dollar amount

6. The Grant ProposalHow do we know if cost share is required?
A. The Request for Proposals (RFP) says that the recipient
must participate in the cost of the project at a certain
percent of total project costs?
B. The estimated costs to complete the project exceeds the
maximum projected award amount?
C. The sponsor’s program director has said that institutional
contributions may impact the award decision?
D. A and/or B?
E. A and/or C?

7. The Grant Proposal
When should you provide cost share?
When the sponsor requires cost participation as a
requirement to qualify for an award. (mandatory)
What should be provided as cost share?
The type of costs that have the least negative impact
on the University yet necessary to complete the
project.

8. The Grant Proposal
What type of costs have the least negative impact on the
university?
A. Third party contributions made in support of the
project.
B. Unrecovered Indirect Costs (F&A Costs)
C. MTDC exclusions, e.g., subcontract costs, tuition

9. The Grant ProposalHow will our cost sharing impact the university?
The university may forfeit:
A. Recovery of direct research costs that might otherwise
be funded by the project.
B. Recovery of F&A costs associated with these direct
costs
C. Our overall F&A rates may be lowered by adding these
costs to our research base.
Funds are redirected from other university priorities
and opportunities.

10. The Grant Proposal
Where do you find the policies concerning cost sharing?
A. OMB Circular A-110 (2 CFR 215)
B. OMB Circular A-21 (2 CFR 220)
C. UW policy GIM 21
D. UW procedures GCA web site.

11. Sources of Funds
What type of budgets may be used to fund cost share
expenses?
A. Departmental budgets
B. Gift budgets if consistent with the purpose of the gift.
C. Discretionary budgets
D. Indirect cost return
E. Royalty income

12. Sources of Funds
What type of budgets may be used to fund cost share
expenses (cont’d)?
F. State-line budgets
G. Inter-departmental funds (with
appropriate approvals)
H. Special allocations from Provost, College,
and/or Dean
I. Private third-party grants

13. Sources of Funds
What costs may NOT be used for cost sharing?
A. Costs funded by another federal program. (e.g. VA)
B. Costs funded by another sponsored program without
both sponsor’s approval.
C. Costs contributed as cost share for another sponsored
program.

14. Types of Costs
What type of costs may be used as cost sharing?
A. Personnel compensation including associated fringe
benefits.
B. The cost of supplies, materials, services and travel
used to support the project.
C. The cost of equipment necessary to complete the
project
D. Waived costs (Tuition waiver, Waived F&A)

15. Third Party Contributions
May be in the form of Cash, Services and/or tangible
assets.
Often referred to as “Third Party In-Kind” contributions.
Not represented as an expense on the books of the prime
institution.

16. Gifts as Cost Share
A Gift made to the university to support the project may
be used as cost share.
A cash gift is processed into a university budget.
The expenditures on the gift account constitute cost
sharing
(NOTE - A gift is not cost sharing until it is spent.)

17. Recording the Pledge
From the beginning of time until Feb 2009 the FAS
Budget Driver (BGT) was used as the official university
record of cost share transactions.
In Feb 2009 a new system linked to MyFD was
established. We refer to this new system as the Cost
Share Module (CSM).

18. Recording the Pledge
When cost share is required or committed in a proposal
how is the pledge tracked in the university system?
A GC1 Addendum is completed and submitted to the
Office of Sponsored Programs (OSP) along with the
eGC1.

19. Recording the Pledge
The GC1 Addendum is forwarded to GCA along with the
other award and proposal documents.
GCA enters the pledge into the official Cost Share system
of the university.
Management Accounting and Analysis (MAA) sends out
quarterly “unmet cost share” reports to departments.

20. Tracking Cost Shared Expenses
Cost shared expenses incurred on university budgets
may be tracked in many different ways, a few examples
include:
A. Use Project Cost Accounting (PCA) coding to track
individual expenses.
B. Track expenses on a spreadsheet.
C. Set up a dedicated budget to accumulate cost share
expenses.

21. Documenting Cost Share
Documentation requirements may differ depending on
the type of expenses being cost shared.
Faculty salaries – Individuals on a faculty appointment
document their salary cost share contributions through
the Faculty Effort Certification (FEC) process.

22. Documenting Cost Share
Non-faculty salaries (e.g., supplies, materials and
services) – These contributions are documented on a
non-faculty cost share contribution spreadsheet.

24. Documenting Cost Share
A. Attach copies of the BAR that show the transaction
or screen prints of the transaction from MyFD.
B. Highlight the transaction(s) being claimed as cost
share.
C. Submit the spreadsheet and BAR/MyFD supporting
documentation to your Team in GCA at least
quarterly.

25. Documenting Cost Share
Documentation standards for Third-Party In-Kind
contributions.
Before the proposal is submitted Non-university entities
and individuals committing resources to the project
need to be informed of the documentation standards
and requirements if the project is funded.

26. November 15, 2006
Company LETTER HEAD
(or name and address of individual.)
RE: Award # _________________
Arthur Extension
UW Dept of Infinity Research
Box XXXXXXXX
Seattle, WA. 98105-0000
Dear Arthur Extension,
During the period Jan 1, 2000 through March 31, 2000 Start-upInc. has made contributions to the XYZ award noted above. Our
contributions supportedthe following activities infurtheranceof the project objectives:
A.
B.
C.
Theresources used to support these activities consistedof the following expenses funded from non-federal sources and provided here as
documentationfor cost sharing. (Details availableupon request for no less than 3 years from the end of the funding agreement.) These
contributions arevalued at the actual costs to our organization.
Salaries & wages $
FringeBenefits $
Supplies & materials $
Travel $
Other costs $______________
Total $______________
Theseexpenses have not been used as cost sharing for any other program.
Sincerely,
Benjamin Factor Accepted: ____________________Date___
President, Arthur Extension, U W, PI
Start-upInc.

27. Documenting Cost Share
Third-party contributions represent the highest risk for
disallowance.
The following guidelines are used to determine the
allowability of third party contributions:
They are verifiable from the recipient's records.
Are not included as contributions for any other federally-
assisted project or program.
Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.

28. Documenting Cost Share
Guidelines for third party contributions (cont’d):
Are allowable under the applicable cost principles.
Are not paid by the Federal Government under another
award, except where authorized by Federal statute to
be used for cost sharing or matching.
Are provided for in the approved budget when required
by the Federal awarding agency.
Conform to other provisions of this Circular, as
applicable.

29. Documenting Cost Share
Guidelines for third party contributions (cont’d):
When an employer other than the recipient furnishes the services of
an employee, these services shall be valued at the employee's
regular rate of pay (plus an amount of fringe benefits that are
reasonable, allowable, and allocable, but exclusive of overhead
costs), provided these services are in the same skill for which the
employee is normally paid.
Volunteer services shall be documented and, to the extent feasible,
supported by the same methods used by the recipient for its own
employees payroll. (e.g. time sheets)
The basis for determining the valuation for personal service, material,
equipment, buildings and land shall be documented.

30. Documenting Cost Share
Guidelines for third party contributions (cont’d):
Rates for volunteer services shall be consistent with
those paid for similar work in the recipient's
organization. In those instances in which the required
skills are not found in the recipient organization, rates
shall be consistent with those paid for similar work in
the labor market in which the recipient competes for
the kind of services involved. Paid fringe benefits that
are reasonable, allowable, and allocable may be
included in the valuation.

31. Volunteer contributions to
________________________________________ Budget # _________
For the period: Through
Date Name Time from To Total hours Rate
Imputed
value
Travel
miles Rate
Imputed
value
Other
costs Total
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
I certify that the contributions noted above are valid, allowable and allocable to the referenced
project.
(NAME) PI/PD Date

32. Documenting Cost Share
Third-Party including volunteer time does not accrue
university F&A as part of the cost share being claimed.
Third-Party cost share is Identified in the cost share
system by using object code 03-00.

33. Documenting Cost Share
Calculating and documenting waived F&A ( Indirect)
costs.
Waived or Unrecovered F&A is the portion of applicable
F&A not paid by the sponsor.
May be equal to total F&A when no F&A is paid by the
sponsor or it may be a portion of the F&A when the
sponsor pays F&A at a rate and/or base different from
ourapproved negotiated rate applicable to the specific
award.

34. Documenting Cost Share
Formula for calculating waived F&A
1. Calculate F&A using the “cost share” F&A rate and base
identified in the 02 index in FIN.
2. Calculate F&A using the “actual” F&A rate and base
identified in the 02 index in FIN.
Subtract 2 from 1 to arrive at the waived F&A.
GCA calculates and records waived F&A on a quarterly
basis.

36. Monitoring Cost Share
How do you monitor progress in meeting the pledged
cost share?
Should be part of the monthly budget reconciliation
process. Pledges and actuals recorded to date are
available from the cost share application in MyFD.
Quarterly MAA sends out an “unmet cost share” report to
department administrators.

37. Monitoring Cost Share
How do you monitor progress in meeting the pledged
cost share?
Ensure that quarterly/semi-annual FECs are processed in
a timely manner.
Ensure that Interim FEC Cost Sharing Reports are
processed to facilitate timely reporting.

38. Monitoring Cost Share
How do you use the Unmet Cost Share Report to
monitor progress in meeting what was pledged?
Review the report for critical items.
A. Budgets that will be expiring within the next three
months.
B. Budgets that require cost share to be included in the
monthly/quarterly invoice prepared by GCA.

39. Fiscal Reporting of Cost Share
Mandatory and committed cost share must generally be
reported at least annually to the sponsor.
Most sponsors expect that the timing of cost share
expenditures will coincide with the expenditure of their
funds.
Some sponsors require cost share to be included on
invoices and will only pay a portion of the total expenses
included on the invoice.

40. Record Retention
Generally all records pertaining to a sponsored
agreement must be maintained for 3 years after
submission of the final financial report/request for
payment.
For awards that are renewed annually most federal
sponsors treat the renewal as a new award for record
retention purposes.
Review record retention requirements on the Records
Management web site,
http://www.washington.edu/admin/recmgt/uw.gs7.html#G

41. Other Cost Share
Shift in effort for PI and/or Key personnel. (S) Used
to account for a long term shift in the funding of
effort from being paid on the grant to cost sharing
and vice-versa.
Salary Cap (C) Used to record salary paid in excess
of the statutory salary cap amount.
“K” award salary limitation (K) Used to record cost
share from salary paid in excessof the salary
limitation

42. Other Cost Share
 Cost share and no-cost extensions.
 Cost share derived from committed effort continues.
GC1 Addendum needs to be processed for the no-cost
extension period.
 F&A on cost shared expenses.
 F&A is applicable to all cost shared UW expenses at the
applicable UW negotiated rate and base unless sponsor
terms and conditions state otherwise.

43. Reference Material
OMB Circular A-110, Uniform Administrative Requirements
for Grants and Agreements With Institutions of Higher
Education, Hospitals, and Other Non-Profit Organizations
OMB Circular A-21, Cost Principles for Educational
Institutions
Grants Information Memorandum #21, Cost Sharing
Policy for Sponsored Agreements

44. Questions & Answers