Effective Date: December 1, 2006

Executive Summary

All of the resources necessary to carry out a sponsored project funded by a governmental agency, private foundation, or industrial or other sponsor (“Sponsored Project”) should normally be budgeted on and ultimately charged to that project. There are occasions, however, when some of the costs of carrying out a Sponsored Project are to be funded from other sources, whether required by the sponsor as a condition of the award (Mandatory Cost Sharing), not required by the sponsor but nevertheless promised by the Principal Investigator to the sponsor (Voluntary Committed Cost Sharing), or not required by the sponsor and not promised by the Principal Investigator, but nevertheless charged to a funding source other than the Sponsored Project (Voluntary Uncommitted Cost Sharing).

The funding source of Mandatory Cost Sharing and Voluntary Committed Cost Sharing must be identified and approved by the person with authority over those funds at the time the commitment is made to the sponsor. Further, those costs must be readily identifiable in the University’s financial records to auditors and others in order to document that those cost sharing commitments have been met and are properly accounted for. Voluntary Uncommitted Cost Sharing does not have to be identified, nor does it have to be accounted for.

Reason(s) for the Policy

To provide guidance to Principal Investigators and others responsible for the administration of Sponsored Projects on the requirements for accounting for and documenting cost sharing..

Primary Guidance to Which This Policy Responds

OMB Circular A-110, which requires that all contributions, including cash and third party in-kind contributions, be accepted as part of the recipient’s cost sharing or matching when such contributions meet all of the following criteria:

• 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;
• 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; and
• Conform to other provisions of Circular A-110, as applicable.

Responsible University Office & Officer

Office of the Controller

Cheryl Ross, Controller

Revision History

Not Applicable

Who is Governed by This Policy

Faculty and Staff who are responsible for authorizing, processing and monitoring charges to Sponsored Projects.

Who Should Know This Policy

• All persons governed by this Policy [see above]
• Departmental Administrators and other departmental staff
• Deans and Departmental Chairs
• Office of Research Administration staff
• Office of the Controller staff

Exclusions & Special Situations

None. This policy applies to cost sharing on all sponsored projects, whether awarded by governmental or non-governmental sponsors.

Policy Text

Cost sharing represents that portion of the total project costs of a Sponsored Project borne by some entity other than the primary sponsor.  Typically, cost sharing relates to the commitment of personnel (i.e., effort devoted to the Sponsored Project), but may also include non-personnel commitments.

Cost sharing falls into three distinct categories: Mandatory Cost Sharing, Voluntary Committed Cost Sharing and Voluntary Uncommitted Cost Sharing.

Mandatory Cost Sharing: In awarding research grants, some sponsors, including a few agencies of the federal government, do not allow the total costs of a Sponsored Project to be reimbursed under the grant. Mandatory cost sharing is cost sharing which is required by the sponsor as a condition of obtaining an award. Mandatory cost sharing also includes cost sharing on an NIH grant when the salary of a faculty member exceeds the salary cap which NIH has placed on the compensation chargeable in whole or in part to such grants.

Voluntary Committed Cost Sharing: Cost sharing that is not required by a sponsor or by the terms of an award, but is nevertheless promised by the Principal Investigator in the proposal or in subsequent communication with the sponsor.

Voluntary Uncommitted Cost Sharing: Cost sharing which is neither required by the sponsor (i.e., Mandatory Cost Sharing) or committed by the principal investigator (i.e., Voluntary Committed Cost Sharing), but which is nevertheless provided during the course of the Sponsored Project.

Cost sharing of any kind may not be charged to a Sponsored Project, but rather must be funded from other sources. As provided for by OMB Circular No.  A-110, funds from non-federal awards may be utilized as the source of cost sharing.  Whenever Mandatory Cost Sharing or Voluntarily Committed Cost Sharing is proposed, the source of funds must be identified, and approval obtained from the person with authority over those funds’ expenditures. Further, when an award is received for which such cost sharing was proposed, the cost sharing generally becomes a binding commitment which must be provided as part of the performance of the Sponsored Project.  In general, proposals should include only the minimum amount of cost sharing necessary to meet sponsor’s requirements, and voluntary committed cost sharing is strongly discouraged.

Federal regulations require that those expenses which represent Mandatory Cost Sharing or Voluntary Committed Cost Sharing be treated consistently and uniformly in accounting and reporting these expenses to sponsors, and in calculating the University’s Facilities and Administration (Indirect Cost) rate. Such cost sharing or matching contributions must be allowable in accordance with OMB Circular A-21; verifiable from the recipient’s records; necessary and reasonable for proper and efficient accomplishment of project objectives.  Funds used to meet matching requirements may be used/counted only once. Values for contributions of services and property must be established in accordance with the applicable federal regulations. Unrecovered indirect costs may be included as part of cost sharing or matching on Sponsored Projects awarded by federal sponsors only with the prior approval of the sponsor.

Examples of cost sharing include unreimbursed faculty effort; other Columbia resources such as non-faculty salaries, equipment, supplies and materials necessary for the project; reductions/waivers of indirect costs; third party contributions, either in-kind or cash (for example, the donated use of an off-campus meeting space or auditorium for which a fee is usually charged).

Note that with respect to reductions or waivers of indirect costs, such requests will be considered only when an agency or program has a formal indirect cost rate lower than Columbia’s current rate, disallows indirect cost recovery or when there are highly unusual circumstances which would justify a waiver. In such cases, the Principal Investigator may request a special review of the circumstances by the Office of Research Administration, which will make a recommendation to the Dean of the relevant School.

If a Sponsored Project requires that matching funds be provided in some specified ratio to the award amount, the source of funds for the matching portion must be identified at the time the proposal is submitted to Research Administration.  If the proposal requires the development of a sum of money for the matching portion, the proposal must be reviewed by the Office of the Vice President for University Development and Alumni Relations before it is submitted to Research Administration.

Once committed, it is important for the Principal Investigator/Department Administrator to document the fulfillment of the cost sharing, and to maintain compliance with sponsor requirements. Throughout a Sponsored Project's life and subsequent record retention period, the Principal Investigator/Department Administrator must maintain sufficient supporting documentation to substantiate the mandatory and voluntary committed cost-sharing contribution to the project.  Though the specific type of documentation required is based on the nature of the award, the terms of the sponsored agreement, and other circumstances, this documentation may be required by sponsors, auditors, Research Administration and/or Restricted Funds. Evidence that the cost sharing has been satisfied is best supported when that cost sharing is charged to a separate account in the University’s accounting system which is identified as representing the cost sharing for that specific project. Accordingly, it is strongly suggested that this approach to documenting the cost sharing be followed.

For multidisciplinary projects, the responsibility lies with the unit administering the award to monitor and advise all involved units regarding compliance with the cost sharing terms and conditions of the award.  Involved units should make every effort to satisfy the expectations of the administering unit.

Failure to comply with the cost sharing commitment of an award may result in a loss or return of Sponsored Project funds.  Units must regularly track mandatory or voluntary committed cost sharing to prevent an over or under-contribution.  Over-contributing prevents use of these funds for meeting commitments on other projects; conversely, under-contributing can result in a corresponding reduction in the award.  If it is anticipated that there will be a significant under-contribution, the Principal Investigator or Department Administrator should immediately notify the Office of the Controller.

Responsibilities

Primary Investigators/Departmental Administrators

• Evaluate the workload and budget implications of proposed Mandatory Cost Sharing or Voluntary Cost Sharing.
• Maintain records of all project related costs which represent cost sharing.
• Ensure the cost sharing commitment is met.
• Maintain compliance with sponsor regulations.

Contacts

Renotta Young, Deputy Controller - email ry2156@columbia.edu or call (212) 854-4684

Cross References to Related Policies

Columbia University Policy on Effort Reporting

Web Address

http://finance.columbia.edu/controller/rf/cost_sharing.html

Appendix

None